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Jim Cramer is one of the most popular stock pickers in the market. Everyday, thousands of investors watch his shows, considering his stock picks as a starting point. As we entered 2012, Jim Cramer made several diversified stock suggestions for the New Year. I had a quick glance at his recent stock picks, and have found out that we have a lot in common with Cramer on several stock mentions. Therefore, I decided to bring some of his stock mentions in this article. I have examined these mentions from a fundamental perspective, and applied my O-Metrix Grading System where possible:

Stock Name

Ticker

O-Metrix Score

My Take

Johnson Controls

(JCI)

8.91

Buy

Honeywell Int'l

(HON)

6.05

Buy

Emerson Electric

(EMR)

6.12

Buy

Whole Foods Market

(WFM)

2.82

Buy after Pull Back

Deere

(DE)

7.68

Buy

Potash

(POT)

7.92

Buy

(Data obtained from Finviz/Morningstar. You can download the O-Metrix calculator here.)

Johnson Controls

Cramer recommends Johnson Controls for a safe investment in playing power management. The stock shows a trailing P/E ratio of 13.0, and a forward P/E ratio of 8.6. Estimated annual EPS growth for the next five years is 16.9%. With a dividend yield of 2.35%, it has a profit margin of 4.0%.

Johnson Controls is a dividend booster, increasing its dividend from $0.16 to $0.18 a share. With an O-Metrix score of 8.91, the company has a PEG value of 0.5. Earnings-per-share [TTM] has risen from -1.06 to 2.36 in approximately two and a half years. Debt-to-equity ratio is 0.4, which crushes the industry average of 4.3. Johnson Controls has healthy cash flow, assets and revenue. There's moderate growth in this stock with safe dividends. Count on this name.

Honeywell

Honeywell is another Cramer favorite, which helps reducing energy consumption at peak hours. Honeywell is trading at a P/E ratio of 16.4, and a forward P/E ratio of 12.1. Five-year annual EPS growth forecast is 14.5%. Profit margin (7.5%) is above the industry average of 6.6%, while shareholders enjoyed a 2.76% dividend last year.

Honeywell is a countable company with a solid long-term plan. The stock is suffering from the market volatility, but assets and cash flow are very healthy. Therefore, dividends are quite safe. Debt-to-equity ratio (0.6) is another solid number, crushing the industry average of 2.9. I recommended buying Honeywell when it double-bottomed in the beginning of October. If you agreed with me and bought the stock at that time, then you could have gained about 29% since then. 3% dividend rule is a smart threshold for entering Honeywell. I think, it is also okay buying it here, as well. Honeywell has a B-Grade O-Metrix score of 6.05.

Emerson Electric

Emerson has a "terrific HVAC business," and it is the "main player in power management for data centers," the Mad Money host said. It shows a trailing P/E ratio of 14.1, and a lower forward P/E ratio of 11.4. Analysts estimate a 12.1% annual EPS growth for the next five years. It paid a 3.51% dividend, while the profit margin was 10.2% in 2010.

Emerson is suffering from the November orders which were lower than analysts' estimates. There has been a big decline in the stock price in the last quarter, which created a good chance to get in. In November 8, Emerson has boosted its quarterly dividend from $0.35 to $0.40 a share. Price-to-earnings ratio has come from 22 to 14 since March 2010. Assets, revenue, and cash flow are extremely healthy. With a Relative Strength Index of 38.27%, the stock is heavily oversold currently. Emerson will get up as soon as panic sell-offs come to an end. Current price is advantageous for entry. Based on these indicators, the stock has an O-Metrix score of 6.12.

Whole Foods

Cramer believes that this name makes a "terrific buy," and suggested buying this stock after a pullback. The company is trading at a P/E ratio of 36.0, and a forward P/E ratio of 26.8. Analysts estimate a 16.9% annualized EPS growth for the next five years. Profit margin (3.4%) is well above the industry average of 0.7%, and it pays a symbolic dividend of 0.81%.

Whole Foods is selling very close to its 52-week high, and there doesn't seem any more upside potential for it. The company is increasing its dividend by 40% this quarter, which indicates the company's strong performance. Assets and cash flow are quite good. Debt-to-equity ratio (0.0) is also convincing, way lower than the industry average of 1.3. Although the average P/E ratio doesn't meet my requirements, Whole Foods is quite a countable company in the organic food market. If you take the risk, a pullback will create the proper environment for entry. Whole Foods has an O-Metrix score of 2.82.

Deere

Global food shortage is a problem, and as the food prices rise, farmers will have more money to buy tractors and other farming equipment. Therefore, Cramer picks Deere first, "best of breed" in this arena. The tractor maker has a P/E ratio of 11.6, and a single-digit forward P/E ratio of 9.4. Analysts estimate a 14.0% annualized EPS growth for the next five years. Profit margin (8.8%) is higher than the industry average of 6.7%, while it offers an average dividend of 2.13%.

Based on these numbers, Deere has an O-Metrix score of 7.68. Dividend historical background is absolutely breathtaking. Revenue, assets and cash flow are adorable. Earnings-per share [TTM] and P/E ratio are doing significantly good for some time. Deere is planning to expand its manufacturing capacity in Iowa. Such a company with strong cash flow and stability can never fail as long as it goes this way. Current price offers a compelling entry point.

Potash

Potash is another name Cramer picks the in farming business. The company has a P/E ratio of 12.3, and a forward P/E ratio of 9.4. Five-year annual EPS growth forecast is 16.5%. Although profit margin (33.9%) is great, dividend yield (0.69%) is quite thin.

Price-to sales ratio is nearly at its bottom, as well as price-to-earnings ratio. With an A- rated balance sheet, Potash has a forward P/E of near 9, which leads to a 40% discount to its 5-year average. Debt-to-equity ratio (0.5) is another healthy sign, lower than the industry average of 1.0. Assets and cash flow are very healthy. Relative Strength Index (46.18%) shows that the stock is oversold at the moment. Moreover, it is trading below its 20, 50 and 100 day-moving averages. The company is positioned to increase its holdings in Israel Chemicals to 25%. I think Potash is oversold and it offers a great upside potential. Potash has a B-Grade O-Metrix score of 7.92.



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

Source: 6 Cramer Stock Picks I Agree With