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Jim Cramer issued 88 buy and sell stock opinions before the Thanksgiving break on 11.28.2011 and 12.02.2011:

Ticker

Cramer's Call

Airdate

Market Cap ($Millions)

P/E

P/B

P/S

Div Yield

EPS Growth Past 5 Years

EPS Growth Next 5 Years

Insider Transactions

USB

Buy

11.28.2011

49503.9

11.38

1.49

3.96

1.9%

-6.4%

8.8%

-1.7%

HD

Buy

11.28.2011

62017.36

17.27

3.49

0.89

2.9%

-5.2%

13.4%

-8.0%

GLD

Buy

11.28.2011

71763.55

N/A

N/A

N/A

0.0%

0.0%

0.0%

0.0%

BGS

Buy

11.28.2011

1121.9

21.78

4.73

2.09

3.9%

18.2%

10.0%

-3.7%

DPZ

Buy

11.28.2011

1939.22

21.09

N/A

1.19

0.0%

-1.7%

9.8%

-13.6%

KMP

Buy

11.28.2011

26265.29

492.94

3.44

3.23

5.9%

-2.3%

7.9%

0.0%

MWE

Buy

11.28.2011

4659.81

59.63

3.15

3.17

5.3%

12.9%

24.2%

-2.4%

FUN

Buy

11.28.2011

1206.63

N/A

6.11

1.19

12.8%

5.4%

6.0%

-65.7%

OKE

Buy

11.28.2011

8639.83

N/A

3.95

0.6

2.7%

-3.6%

7.8%

-4.4%

PNRA

Buy

11.28.2011

4248.89

32.21

6.92

2.42

0.0%

17.0%

18.0%

4.5%

AUQ

Sell

11.28.2011

2553.48

11.93

1.43

6.97

0.0%

52.9%

5.0%

0.0%

NUAN

Sell

11.28.2011

7497.95

207.75

3.09

5.69

0.0%

24.9%

14.2%

42.7%

SIAL

Sell

11.28.2011

7885.21

18.24

3.66

3.18

1.1%

10.7%

8.9%

4.8%

WYNN

Sell

11.28.2011

14699.04

27.48

5.71

2.85

1.7%

3.4%

37.9%

-21.1%

WFR

Sell

11.28.2011

981.8

N/A

0.44

0.34

0.0%

-32.9%

0.0%

85.0%

PZZA

Sell

11.28.2011

902.06

17.37

4.42

0.75

0.0%

8.8%

10.0%

-1.2%

PRSP

Sell

11.28.2011

1892.01

13.72

1.23

5.05

1.9%

9.0%

8.0%

14.0%

LNG

Buy

11.29.2011

820.94

N/A

N/A

2.8

0.0%

0.0%

0.0%

-37.6%

HAL

Buy

11.29.2011

34064.69

12.51

2.76

1.49

1.0%

-0.6%

27.7%

-28.1%

TSCO

Buy

11.29.2011

5254.06

27.2

5.61

1.31

0.7%

16.6%

17.2%

12.8%

GL

Buy

11.29.2011

71763.55

N/A

N/A

N/A

0.0%

0.0%

0.0%

0.0%

DOW

Buy

11.29.2011

33078.86

11.52

1.37

0.55

3.6%

-18.0%

6.8%

14.2%

EOG

Buy

11.29.2011

27452.27

26.59

2.2

3

0.6%

-34.2%

33.5%

10.8%

COG

Buy

11.29.2011

8974.65

62.24

4.38

9.66

0.1%

-8.0%

40.3%

-2.7%

RRC

Buy

11.29.2011

11389.79

N/A

4.89

10.63

0.2%

-14.6%

40.0%

-4.1%

SLB

Buy

11.29.2011

103545.3

23.96

3.29

2.74

1.3%

13.3%

22.3%

-3.6%

ESV

Buy

11.29.2011

11953.04

18.31

1.12

5.31

2.7%

16.4%

16.0%

-2.1%

NOV

Buy

11.29.2011

30999.66

16.66

1.81

2.28

0.7%

34.4%

15.0%

-36.0%

COP

Buy

11.29.2011

96686.03

9.32

1.47

0.4

3.6%

-4.6%

2.9%

462.4%

OXY

Buy

11.29.2011

79734.01

12.84

2.19

3.51

1.9%

-1.1%

14.8%

2.4%

KMP

Buy

11.29.2011

26265.29

492.94

3.44

3.23

5.9%

-2.3%

7.9%

0.0%

CLB

Buy

11.29.2011

5533.58

131.86

41.06

6.35

0.8%

39.6%

19.7%

-0.9%

CVX

Buy

11.29.2011

204764

7.62

1.69

0.83

3.2%

7.7%

6.3%

-4.8%

RIG

Sell

11.29.2011

14396.9

N/A

0.69

1.62

7.0%

-0.3%

10.1%

-1.1%

GGC

Sell

11.29.2011

670.08

8.98

1.34

0.21

0.0%

-55.5%

6.5%

2.6%

AEM

Sell

11.29.2011

7286.33

63.72

1.94

4.04

1.5%

37.1%

7.4%

0.0%

GILD

Sell

11.29.2011

30158.27

N/A

N/A

N/A

0.0%

31.1%

15.4%

5.2%

AMR

Sell

11.29.2011

141.3

N/A

N/A

0.01

0.0%

-21.0%

7.5%

147.9%

DMND

Sell

11.29.2011

642.83

13.13

1.41

0.67

0.6%

36.5%

16.8%

2.1%

BAC

Sell

11.29.2011

58747.25

N/A

0.25

0.85

0.7%

-31.4%

9.6%

3.6%

CRM

Buy

11.30.2011

17001.36

6250.5

11.35

8.13

0.0%

14.5%

26.4%

-5.0%

DECK

Buy

11.30.2011

4133.2

25.73

5.78

3.43

0.0%

37.9%

19.9%

-6.6%

BMY

Buy

11.30.2011

55631.42

16.92

3.36

2.66

4.0%

4.4%

1.3%

109.5%

SNY

Buy

11.30.2011

91834.42

14.45

1.3

1.99

5.3%

20.0%

2.0%

0.0%

PGH

Buy

11.30.2011

3808.99

37.89

1.18

3.33

7.5%

-12.7%

0.0%

0.0%

DIS

Buy

11.30.2011

66363.08

14.66

1.74

1.62

1.6%

9.5%

14.0%

8.0%

TD

Buy

11.30.2011

65202.01

11.47

1.42

3.6

3.7%

2.7%

10.6%

0.0%

CMI

Buy

11.30.2011

18457.67

11.21

3.54

1.07

1.7%

13.9%

17.6%

-9.4%

HOT

Buy

11.30.2011

9707.9

17.5

3.38

1.79

1.0%

-2.8%

24.0%

-9.8%

WYNN

Buy

11.30.2011

14699.04

27.48

5.71

2.85

1.7%

3.4%

37.9%

-21.1%

C

Sell

11.30.2011

87214.27

8.11

0.49

1.18

0.1%

-37.9%

10.6%

-25.5%

RSH

Sell

11.30.2011

1134.18

11.47

1.42

0.26

4.4%

-1.5%

6.5%

11.1%

MSFT

Sell

11.30.2011

216193

9.35

3.64

3.04

3.1%

17.6%

10.7%

-7.0%

VRTX

Sell

11.30.2011

6173.67

N/A

10.65

6.76

0.0%

0.0%

0.0%

-1.5%

LULU

Buy

12.01.2011

6931.44

42.42

13.25

7.92

0.0%

141.4%

27.5%

-9.7%

DECK

Buy

12.01.2011

4133.2

25.73

5.78

3.43

0.0%

37.9%

19.9%

-6.6%

PVH

Buy

12.01.2011

5055.51

18.61

1.82

0.88

0.2%

-15.4%

14.7%

-24.1%

ETP

Buy

12.01.2011

9903.01

32.92

1.81

1.53

8.0%

-13.8%

16.7%

0.0%

GRPN

Sell

12.01.2011

12143.71

N/A

N/A

9.41

0.0%

0.0%

0.0%

0.0%

SFLY

Sell

12.01.2011

976.65

67.07

1.71

2.6

0.0%

-13.5%

34.3%

-17.6%

AINV

Sell

12.01.2011

1428.54

N/A

0.89

12.57

15.5%

-13.5%

6.7%

34.0%

PMT

Sell

12.01.2011

465.43

7.95

0.88

4.48

12.0%

0.0%

25.0%

6.1%

RIGL

Sell

12.01.2011

545.7

N/A

2.12

114.88

0.0%

0.0%

0.0%

-0.1%

RIMM

Sell

12.01.2011

8921.2

3.11

0.89

0.44

0.0%

58.3%

8.0%

0.0%

SDT

Buy

12.02.2011

784.56

N/A

N/A

N/A

11.7%

0.0%

11.0%

0.0%

PH

Buy

12.02.2011

12513.96

12.25

2.49

0.98

1.8%

12.6%

8.5%

9.0%

NAT

Buy

12.02.2011

597.98

N/A

0.66

7.38

9.4%

-26.4%

0.0%

0.0%

SI

Buy

12.02.2011

92791.3

9.78

2.1

0.94

4.0%

24.2%

19.7%

0.0%

T

Buy

12.02.2011

172742.9

14.8

1.52

1.38

5.9%

17.8%

3.5%

-0.4%

COST

Buy

12.02.2011

37789.86

26.42

3.16

0.43

1.1%

7.5%

13.0%

-1.3%

ETP

Buy

12.02.2011

9903.01

32.92

1.81

1.53

8.0%

-13.8%

16.7%

0.0%

EW

Buy

12.02.2011

7442.58

32.78

5.5

4.54

0.0%

23.5%

27.3%

-46.2%

CRM

Buy

12.02.2011

17001.36

6250.5

11.35

8.13

0.0%

14.5%

26.4%

-5.0%

LULU

Buy

12.02.2011

6931.44

42.42

13.25

7.92

0.0%

141.4%

27.5%

-9.7%

WM

Buy

12.02.2011

14514.21

15.38

2.45

1.1

4.3%

-1.1%

9.7%

3.5%

HD

Buy

12.02.2011

62017.36

17.27

3.49

0.89

2.9%

-5.2%

13.4%

-8.0%

YUM

Buy

12.02.2011

26289.95

22.39

13.22

2.18

2.0%

13.3%

12.8%

7.8%

DLTR

Buy

12.02.2011

9936.62

22.26

6.87

1.55

0.0%

23.8%

17.6%

-18.4%

AZO

Buy

12.02.2011

13521.51

17.31

0

1.67

0.0%

21.0%

15.4%

-60.3%

MCD

Buy

12.02.2011

97564.03

18.7

7.32

3.7

2.9%

17.8%

10.5%

-4.7%

CMVT

Buy

12.02.2011

1326.56

N/A

4.04

0.83

0.0%

-16.1%

22.5%

4.7%

S

Sell

12.02.2011

7938.92

N/A

0.61

0.24

0.0%

-57.8%

0.9%

2.1%

GMCR

Sell

12.02.2011

9104.03

45.29

4.76

3.43

0.0%

75.4%

37.2%

-3.7%

DG

Sell

12.02.2011

13861.72

21.47

3.17

1.01

0.0%

11.0%

16.2%

-99.5%

TOL

Sell

12.02.2011

3466.48

46.09

1.34

2.39

0.0%

-78.6%

8.5%

-3.1%

LOW

Sell

12.02.2011

30499.84

17.77

1.83

0.62

2.3%

-3.8%

13.0%

-10.6%

FGP

Sell

12.02.2011

1745.79

N/A

20.7

0.72

8.7%

18.0%

4.0%

49.1%

RFMD

Sell

12.02.2011

1776.16

21.3

2.57

1.87

0.0%

39.3%

13.9%

-1.9%

In 2008, my MBA classmates and I investigated Jim Cramer’s recommendations and found the following:

  • Buying Cramer’s picks after he recommended them underperformed the broader stock market. There seems to be a “bump” relative to the market for his picks that has happened faster than you could conceivably trade.
  • Cramer’s mid cap and large cap picks did not outperform the market, and “shorting the bump” would be an interesting strategy for high-frequency traders.
  • Cramer’s small and micro cap picks do a little better than small cap indexes after he discusses them.
  • Cramer might be trying to do the impossible by making daily stock picks. He provides entertainment, relays business news, interviews executives, and displays an impressive, encyclopedic knowledge of publicly-traded companies. He is like Stone Phillips, Oprah, and Bloomberg News combined. However, these talents did not translate into alpha for his mid and large cap picks.

Exploiting any persistence of these effects is fairly simple. Contrarians should review large and mid cap stocks recommended by Cramer and consider whether there is merit to taking the opposite positions. From this week’s large and mid cap picks, KMP, CLB, CRM, MSFT, and RIMM are challenged.

What could an investor expect from these three picks? We can model total returns over a three year holding period for each of these stocks. (I use a 3-year holding period since above-average growth estimates are not reliable further out.) Giving Cramer the benefit of the doubt for buy recommendations, the stock is assumed to be sold at a generous growth stock price to earnings multiple of 17 and the maximum of historical and analyst estimate values for earnings growth are assumed.

On the contrary, we will use more conservative values to give Cramer the benefit of the doubt for his sell recommendations. For his sell calls, a bargain value stock price to earnings multiple of 10 and the minimum of historical and analyst estimates values for earnings growth are assumed. These assumptions are used to project an annualized total return over the next three years and a terminal price to earnings ratios, that is, price paid today divided by earnings at the end of the holding period for each stock:

3 Years Growth

Ticker

Cramer

g (past)

g (future)

Terminal P/E

Annualized Return

KMP

Buy

-2.3%

7.9%

392.8

-64.2%

CLB

Buy

39.6%

19.7%

48.4

-29.3%

CRM

Buy

14.5%

26.4%

3092.16

-82.4%

MSFT

Sell

17.6%

10.7%

6.90

14%

RIMM

Sell

58.3%

8.0%

2.47

59%

Even with assumptions that would favor Cramer’s sell recommendations for Microsoft (MSFT) and Research In Motion Limited (RIMM), these sell recommendations cannot be supported given current valuations. Even terrible scenarios look good for these stocks: holding these stocks through three years with the lesser of historical growth or analyst growth estimates and then selling at a bargain 10 price-to-earnings multiple would reap 14% and 59% annualized returns, respectively.

In addition, Cramer’s buy recommendations for Kinder Morgan Energy Partners LP (KMP), Core Laboratories NV (CLB), and Salesforce.com (CRM) are not supported even by a rosy scenario. Buyers of these stocks who enjoy the greater of historical growth and analyst growth estimates and are able to sell at a growth stock P/E ratio would still suffer negative total returns. Regardless of conceivable growth levels, the price is just too high for these stocks. Intrepid contrarians should research KMP, CLB and CRM as a sell picks, rather than trusting Cramer’s buy recommendation on each stock.

Bear in mind that challenging the consensus requires a strong will. In addition to countering Cramer, contrarians have to shut out the allure of stories and other distractions in order to focus on valuation.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing. Moreover, this research does NOT constitute a guarantee.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Countering Cramer's Picks From Last Week