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The markets ended the week significantly higher. Financials bounced back, returning near 10%, followed by basic material companies (9.7%), and industrials (9.5%). However, Cramer was not in a bullish mood throughout this week. In November 30’s Lightning Round segment, he maintained his bear attitude again. He made seven calls, three bullish and four 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 applicable, as well. Here is a fundamental analysis of these stocks from Cramer's November 30 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Microsoft

(MSFT)

Avoid

7.40

Long-Term Buy

RadioShack

(RSH)

Sell

7.42

Buy

Walt Disney Company

(DIS)

Buy

5.29

Buy

Salesforce.com

(CRM)

Avoid

0.04

Avoid

Vertex

(VRTX)

Avoid

N/A

Avoid

Bristol-Myers

(BMY)

Buy

2.28

Hold

Sanofi-Aventis

(SNY)

Buy

2.24

Hold

(Data obtained from Finviz/Morningstar, and is current as of December 2. You can download the O-Metrix calculator here.)

Microsoft

“No catalyst,” Cramer comments, “I have no reason to recommend this stock.” The company shows a single-digit P/E ratio of 9.2, and a forward P/E ratio of 8.3. Analysts estimate a 9.9% annual EPS growth for the next five years. It boasts a 3.17% dividend, while the profit margin (33.0%) is higher than the industry average of 28.1%. Based on these numbers, the company has an O-Metrix score of 7.40.

Although this stock is a tremendous bargain, it did not perform well throughout the year. Since August, Microsoft hardly made it above $27 for a few times. Both the assets and cash flow are outstanding, as well as dividends. Debt-to equity (0.2) ratio is another gorgeous number, which crushes the industry average of 10. Gross margin and operating margin are 77.2% and 38.3%, respectively. The company is currently betting on its Kinect interface. If things go right, Microsoft can get strong enough to wrestle Apple (AAPL) alone. I count on Microsoft in the long run, although the stock is subject to massive dilution from insiders. Read a full analysis here.

RadioShack

Cramer recommends selling this name as there’s “nothing there” for gamers. It was trading at a P/E ratio of 11.7, and a forward P/E ratio of 8.3. Estimated annualized EPS growth for the next five years is 8.7%. Although profit margin (2.6%) is lower than the industry average of 3.8%, it offers a nifty dividend of 4.36%.

RadioShack has melted and has lost about 40% of its value since the beginning of this year. Cash flow and assets are unstable. O-Metrix score is 7.42, and Beta value is 1.60. The third quarter reports were disappointing, as well. However, the company has doubled its dividend from $0.25 to $0.50 a share, which is a good indicator. I am itching to be bullish on RadioShack. The company is truly assertive, as it has boosted its dividend this much, and will start paying it quarterly (until now it was annual).

Walt Disney

The Mad Money host is a buyer of Walt Disney, as it had a gorgeous dividend raise of 50%. The California-based company has a P/E ratio of 14.5, and a forward P/E ratio of 10.9. Five-year annual EPS growth forecast is 11.8%, which is fair given the 9.47% EPS growth of past five years. Dividend yield is 1.12%, and profit margin (11.8%) is above the industry average of 10.8%.

Walt Disney is boosting its dividend by 50%, which will be payable on January 18. Dividends are appetizing, as well as revenue, cash flow, and debt-to assets ratio. Debt-to equity ratio (0.2) is also convincing, way below the industry average of 1.5. The release of The Lion King in 3D has showed an effect on the stock’s performance unargued, and led to a 9% increase since mid-September of this year. The company announced positive Q4 earnings results, so it is worth counting on this stock. Things might get even better for Walt Disney after a short while (full analysis, here). The stock has a C Grade O-Metrix score of 5.29.

Salesforce.com

Here is what Cramer commented on Salesforce:

I think they seem oversold...they've got that Dreamforce Conference...we didn't get the number we wanted...let's see how the Dreamforce Conference goes, but that number (from the earnings) was not what we wanted to see from a high-growth stock.

Cramer was bullish on Salesforce.com for a while, but apparently he changed his mind. The tech stock has a horrifying P/E ratio of 6000, and a forward P/E ratio of 71.9. Analysts expect the company to boost its earnings by 22.9% in the next five years. It has no dividend policy, while the profit margin (0.2%) is crushed by the industry average of 12.1%.

Salesforce has a pathetic O-Metrix score of 0.04, and insiders hold only 0.70% of the shares. Beta value (1.46) is also not that trustworthy. There is almost no indicator that shows a trustworthy stock we have on the table. Operating margin (0.8%), ROA (0.92%), ROE (2.12%), ROI (1.36%), and PEG value (3.1) are hopeless numbers. I see a vast downside potential in Salesforce, as it has a price-to-book value of 10.8. Therefore, avoidance is the best bet.

Vertex vs. Bristol-Myers vs. Sanofi

Cramer would rather go with Bristol-Myers and Sanofi instead of Vertex. Here is a brief comparison of these three stocks:

Current as of December 2

Vertex

Bristol-Myers

Sanofi

P/E ratio

-19.1

16.9

14.7

Forward P/E ratio

6.3

16.2

8.6

Estimated EPS growth for the next 5 years

2.3%

3.5%

2.0%

Dividend yield

-

4.03%

3.78%

Profit margin

-33.9%

16.0%

13.4%

Gross margin

94.1%

73.0%

70.5%

Upside movement potential

82.8%

0.2%

24.8%

As you can see, Vertex is clearly a loser for now. While forward expectations are high, I would wait until earnings confirm these expectations. Therefore, I will compare Bristol-Myers and Sanofi only. O-Metrix scores of Bristol-Myers and Sanofi are 2.28 and 2.24, respectively. Bristol-Myers is offering stable and quarterly dividends, while those of Sanofi are annual and unstable. Both BMY and Sanofi are truly safe stock with a strong field performance. I think the big pharma companies have enough cash flows to keep paying substantial dividends. However, they are priced with a safety premium. Therefore, I rate them as hold.



Disclosure: I am long MSFT.

Source: 3 Bullish, 4 Bearish Calls From Cramer's Lightning Round