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European governments are taking effective steps to solve their debt crisis, and markets were in a good shape on Friday. However, things are still way too far from settling down. Extreme precaution is the only way of sheltering your money for the time being. While there are lots of dangerous investing zones, you can find safe & profitable ones if you do some research, as well. If you can avoid that minefields and invest your money accordingly, you can turn this situation to your benefit.

In the November 10th Lightning Round program, Jim Cramer made eleven calls that are worth a deeper look. Five of them were bullish this time, and the rest bearish. I have examined all of his stock mentions from a fundamental perspective, and added my opinion about them. I have applied my O-Metrix Grading System where possible, as well. Here is a fundamental analysis of these stocks from Cramer's November 10 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Activision Blizzard

(ATVI)

Avoid

4.90

Buy After Pullback

Whole Foods Market

(WFM)

Buy

2.99

Avoid

McMoRan Exploration

(MMR)

Buy

N/A

Avoid

Research In Motion

(RIMM)

Avoid

8.57

Long-Term Buy

World Wrestling Entertainment

(WWE)

Avoid

5.01

Hold

Data obtained from Finviz/Morningstar, and is current as of November 10 close. You can download the O-Metrix calculator here.

Activision Blizzard

Cramer believes that there’s no reason to own a gaming stock, so he suggests “taking a pass.” The company was trading at a P/E ratio of 20.2, and a forward P/E ratio of 14.0, as of November 10. Analysts estimate a 15.5% annualized EPS growth for the next five years. Profit margin (15.8%) is well above the industry average of 6.4%, and it pays a 1.27% dividend.

Target price is $15.06, indicating an about 16.0% increase potential. The stock is trading only 9.86% lower than its 52-week high, while it returned 9.2% in a year. O-Metrix score is 4.90. Activision has no debts since 2007, whereas cash flow is doing all right. Beta value is 0.60. SMA50 and SMA200 are 3.60% and 11.86%, respectively. Earnings increased by 292.08% this year, and 65.03% this quarter. Debt-to equity ratio is 0.0, which crushes the industry average of 2.3. Gross margin is 60.0%. Apart from P/S (3.2), there is no red flag in Activision’s key statistics. PEG value is 0.9. Gaming business might be disadvantageous, but Activision is one of the leading companies in this arena. Moreover, indicators are pretty convincing. I recommend buying this stock after a pullback.

Whole Foods Market

The Mad Money host believes that this stock is a buy at current levels. The food company shows a trailing P/E ratio of 36.4, and a forward P/E ratio of 25.8, as of the November 10 close. Five-year annual EPS growth forecast is 18.0%. It pays a thin dividend of 0.60%, while the profit margin (3.3%) is way higher than the industry average of 0.7%.

Whole Foods is trading 9.83% lower than its 52-week high, and it has an O-Metrix score of 2.99. Target price is $76.38, which implies a 13.7% upside potential. Insiders hold only 0.84% of the shares, whereas it returned 42.1% in a year. Until January 2011, Whole Foods paid its last dividend (20¢) in July 2008. In January, it started paying a quarterly dividend of 10¢ a share. P/B is 4.2, and P/S is 1.2, both of which crush their industry averages. SMA20 and SMA50 are -4.40% and -1.92%, respectively.

Insider transactions have decreased by 25.52% within the last six months. Insiders have been mostly selling stocks for a while. Gross margin and operating margin are 35.0% and 5.4%, respectively. ROA is 8.11%, whereas ROE is 12.62%. ROI is 11.44%. PEG value is 1.4. With these indicators, I believe it is quite hard for the company to reach its EPS growth estimate, as I’ve mentioned before. Larger competitors are also offering natural products to their customers. While Whole Foods has a nice market niche, its prices are significantly higher than discount shopping centers. Avoidance is my take.

McMoRan Exploration

Cramer likes this speculative company:

As long as you realize that this one is speculative, then it's a buy, buy, buy.

However, McMoRan reported a loss of -$0.05 per share in the last quarter. The company does not have a dividend policy. Profit margin of -32.2% is crushed by the industry average of 14.1%.

McMoRan is currently trading 27.57% lower than its 52-week high, and it returned -19.4% in the last twelve months. Target price is $18.38, implying a 31.7% upside movement potential. Beta value is 1.45. P/B is 2.3, and P/S is 3.8, both of which are higher than their industry averages. Operating margin is -11.9%. ROA, ROE, and ROI are -8.51%, -35.63% and -18.00%, respectively. Insiders hold only 1.93% of the shares, whereas SMA200 is -9.04%. Cash flow is struggling. Moreover, the stock is highly volatile. There are much better companies in the oil & gas sector, so I would avoid this one.

Research in Motion

Cramer made the following remarks on this company:

It's possible at $17 there's a reason to own it, but I'm going to continue to say don't' buy.

The tech stock was trading at a respectable P/E ratio of 3.2, and a forward P/E ratio of 3.8, as of November 10. Analysts expect the company to have a 6.0% annualized EPS growth in the next five years, which is totally conservative given the 58.34% EPS growth of past five years. Profit margin (14.3%) is well above the industry average of 9.5%, and it pays no dividend.

The company is trading 75.08% lower than its 52-week high, while it returned -70.3% in a year. It has zero debts for the last three years, and cash flow is impressive. O-Metrix score is 8.57. Target price is $30.35, which implies a 72.6% upside potential. Earnings increased by 46.92% this year, and institutions hold 60.57% of the shares. Debt-to-equity ratio is 0.0, which crushes the industry average of 2.2. ROA and ROE are 23.50% and 33.50%, respectively. There is no red flag in Research in Motion’s key statistics. Research in Motion is doing quite bad for the time being, but it will surely outperform in the long-term.

World Wrestling Entertainment

The Mad Money host describes WWE as a “wasting asset,” and he sees “no reason to own it.” The Connecticut-based company, as of November 10, shows a trailing P/E ratio of 18.3, and a forward P/E ratio of 13.0. Five-year annual EPS growth forecast is 11.0%. Profit margin (8.4%) is lower than the industry average of 10.8%, while it sports a 4.71% dividend.

Target price is $12.25, which indicates an about 20.2% increase potential. The stock is currently trading 26.85% lower than its 52-week high, whereas it returned -26.0% in the last twelve months. O-Metrix score is 5.01. In June 2011, yields have been cut from 36¢ to 12¢ a share. Assets are decreasing for the last five quarters straight, and earnings decreased by 25.52% this year. Insiders hold only 2.41% of the shares. P/B is 2.4, and P/S is 1.6, both of which are higher than their industry averages. Gross margin and operating margin are 38.7% and 13.1%, respectively. While ROA is 10.30%, ROE is 12.98%. Insiders have been mostly selling stocks for a while. PEG value is 1.2, and average analyst recommendation is 1.7 (1=Buy, 3=Sell). While the stock is expensive, the yield is great. Therefore, I rate WWE was a hold.

Click here for part II

Source: 5 Buy And 6 Sell Cramer Ideas: Part I