CNBC’s Jim Cramer recommended the following five stocks for the short-term on Mad Money on November 7. Two weeks out, here is my actionable analysis of where he went wrong on his big calls in November:
Cooper Companies (COO) - Disliked at $67.32; now trading at $57.
This medical device maker had some ups and downs throughout the month of October because of an issue with its Avaira Toric contact lenses and the subsequent FDA-mandated recall. Cooper announced to the public that it would work with the FDA to complete the recall. The stock price rose as a result. Earnings-per-share for the 3rd quarter were $1.15, beating estimates by $0.06. Cooper reported revenue of $351 million, an 18% year over year increase, beating estimates by $20 million.
Compared to much larger competitor Johnson & Johnson (JNJ), Cooper has much less overhead and more room to grow. Cooper has 18.9% quarterly revenue growth and a 17.95% operating margin. On the other hand, Johnson & Johnson only has 6.8% QRG, but has a 25.42% operating margin. Cooper Companies is trading at 18.99 times earnings and yields 0.10%. Johnson & Johnson only trades at 15.8 times earnings, but yields 3.51%. Cramer made the right call on Cooper.
Juniper Networks (JNPR) - Disliked at $23.71; now trading around $22.
Cramer gave this network infrastructure and IT service provider a buy recommendation. 2011 hasn’t been the brightest year for Juniper Networks. The company received several downgrades after reporting a weak second quarter. Juniper cited its shortcomings to weak carrier demand, the aftermath of Japan’s earthquake and other macroeconomic issues. Juniper improved things slightly by reporting in-line Q3 results and giving soft guidance for the 4th quarter. The company increased revenue by 9%. Juniper Networks and rival Cisco Systems (CSCO) are facing tough competition from China’s Huawei.
Juniper is sitting on a boatload of cash-- $4.2 billion to be exact-- and executives said the company is looking to acquire companies that can improve its positions in cloud computing and mobile data. Juniper Networks is also releasing some products that will directly compete with Cisco’s core router. Analysts think Juniper’s core router can bring in an additional $250 million in revenue during 2012. Juniper Networks trades at 25.7 times earnings and has 9.2% quarterly revenue growth. So far Cramer has done fairly on this name.
Manitowoc (MTW) - Liked at $12.06; trading at $10 at the time of this writing.
This industrial goods manufacturer operates in two primary spaces: crane-related products and foodservice equipment. Down 5.11% year-to-date, Manitowoc reported a solid quarter. The company reported in-line revenues of $935 million, a 16% increase. Manitowoc’s 3Q EPS was $0.18, a $0.01 beat. CEO Glen Tellock said 2011 was only a “transition year” and that investors will see “the impact of growing global markets impact Manitowoc’s 2012 top-line earnings”. Executives said foodservice revenue will be in the high single digits and crane sales will improve by 20-25% over the next year.
Competitor Terex (TEX) has an astonishing 67.6% quarterly revenue growth compared to Manitowoc’s 6.6%. However, Manitowoc’s 23.81% gross margin and 6.4% operating margin dwarfs Terex’s comparable margins; 14.96% and 1.6% respectively. Unlike Terex, Manitowoc offers a 0.7% dividend yield. So far, Cramer has been wrong on this name.
Allscripts Healthcare (MDRX) - Liked at $20.41; trading around $19 at the time of this writing.
Provider of software, information services and other solutions, Allscripts-Misys Healthcare Solutions reported $368 million in 3Q revenue, a 34% year-over-year increase and a $3 million beat on estimates. However, the company reported an $0.11 miss on earnings-per-share estimates. Allscripts has already brought in over $200 million in cross-selling synergies from Eclipsys, a recent acquisition. Deutsche Bank gave Allscripts a Buy rating based on its “solid growth momentum and attractive valuation”. Allscripts's 52.10% quarterly revenue growth is higher than its competitors AthenaHealth (ATHN) and Cerner (CERN), which have QRG’s of 32.6% and 23.5%. However, both AthenaHealth and Cerner have higher gross margins and trade at lower multiples than Allscripts. Cramer was wrong on this one so far.
Apple (AAPL) - Cramer said he'd buy Apple at $399; and it is now trading at $365.
Tech giant Apple is continuing to innovate and force its competitors to keep up. Much to the disappointment of die-hard Apple fans wanting the iPhone 5, the company released the iPhone 4S instead. The updated version features Siri voice-recognition software. In response, Amazon (AMZN) acquired Yap, a developer of voice recognition software for mobile devices. Don’t be surprised if Yap’s voice recognition software ends up on Amazon’s new Kindle Fire device.
Also out of response to Apple’s position, Adobe (ADBE) announced it will stop developing Flash for mobile platforms. This practically solidifies the criticism it received from Steve Jobs and others that Flash is too unstable. Despite recent fluctuations, Cramer thinks Apple is among America’s greatest companies and a terrific long-term stock. Apple has 39% quarterly revenue growth, 40.48% gross margin and only trades at 14.34 times earnings. In the short-run, Cramer was wrong on Apple shares.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.