5 Stocks On Which I Agree With Cramer

Includes: AAPL, CAT, EPD, KMB, KMP
by: Efsinvestment

Jim Cramer is one of the most joyful stock pickers on the street. I have been examining Cramer’s Lightning Round stock picks from a fundamental point of view, explaining my opinions about them. Recently, Insider Monkey revealed a report on Cramer’s favorite stock picks, based on the number of recommendations in the last 30 days. There are five stocks that I totally agree with Cramer on. Among his favorite stocks, Apple (NASDAQ:AAPL), Caterpillar (NYSE:CAT) , Kimberly Clark (NYSE:KMB), and Kinder Morgan Energy Partners (NYSE:KMP) offer the best deals. I have examined these stocks from a fundamental perspective, adding my O-Metrix Grading System where necessary. Here is a fundamental analysis of five stocks on which I agree with Cramer.



P/E Ratio


O-Metrix Score











Kimberly Clark





Kinder Morgan Energy Partners





Enterprise Product Partners





Data obtained from Finviz/Morningstar and current as of Aug. 26 close. iFrame Code here.

Apple recently lost its master magician, Steve Jobs. The board named COO Tim Cook as his successor. Nevertheless, Jobs will remain as the chairman of Apple. Jobs' organic growth and continuous innovation philosophy were the main driving forces behind Apple’s success. Hopefully, Cook will continue with the same philosophy.

Apple returned 18.92% since January and 58.75% in a year. However, I still think that Apple is cheap. My FED+ fair value estimate range for Apple is $363-430 per share. The stock is trading with a trailing P/E ratio of 15.19 and a forward P/E ratio of 11.96. Based on annualized EPS growth estimate of 20.85%, it has a PEG ratio of 0.73 and an O-Metrix score of 7.84. (Full analysis here.)

Caterpillar is one of my favorite industrials. While the stock gained 6.49% in the last week, it still lost 18.24% in the last quarter. 52-week trading range is $62.20-116.06. It is currently trading at the middle of a 52-week trading range. The management is doing well. The return on equity is 35.44%. Insiders own 0.19% of the company, and they increased their holdings by 9.84% in the last six months.

Analysts are pretty bullish on Caterpillar. Their mean price target of $127.80 implies an almost 50% upside potential. EPS increased 190% this year and is expected to increase by 33.43% in the next year. The stock pays a yield of 2.16%. Based on an annualized EPS growth estimate of 21% for the next five years, Caterpillar has an O-Metrix score of 9.58.

Kimberly-Clark was recently upgraded by Barclays Capital with a target price of $69. Analysts have an average target price of $71.15, implying 5% upside potential. The stock gained 3.79% last week. The year to date return is 9.94%. With a market cap of $26.58 billion, a yield of 4.16%, and a low Beta of 0.39, Kimberly Clark is a safe stock to invest in. A 52-week trading range is $59.12-68. While the debt/equity ratio of 1.35 is a red flag, the stock is trading with a fair P/E ratio of 16.04 and a forward P/E ratio of 12.87. Based on an annualized EPS growth estimate of 7.8%, Kimberly-Clark has an O-Metrix score of 4.2.

Kinder Morgan Energy Partners operates energy transportation pipelines and associated product terminals. The stock gained 2.42% in the last week, but still lost 3.66% in the last month. The year-to-date return is 1.18%. Similar to Kimberly-Clark, KMP is a low beta stock with a Beta of 0.34. It is also trading at a narrow 52-week trading range of $62.75-76.60. EPS is expected to increase by 27.32% in the next year. Analysts have a mean target price of $76.14, implying 12% upside potential. KMP pays a nifty yield of 6.78%. It is a yield and low Beta stock with large margin of safety.

Enterprise Product Partners, according to Cramer, "has earnings that are on fire, and a 6% dividend which it raised last month.” It is one of Cramer’s seven dividend stocks to buy right now. Enterprise Products Partners L.P. is a midstream energy service provider in North America.

A 52-week trading range is $34.61-43.45. The stock is a low beta, high yield type of stock. It was not affected much from the recent sell-off thanks to its low Beta of 0.55. In the last quarter, sales increased by 58.69% and earnings increased by 96.60%. Out of 19 analysts covering the company, 16 have a buy, two have an outperform, and one has a hold rating. Their mean target price of $48 implies a 20% upside potential. RBC Capital has an updated target price of $50.

Find more information on O-Metrix Grading System here.

Disclosure: I am long AAPL.