4 Buy And 2 Sell: Ideas By Cramer

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Includes: EEP, EPD, LVS, S, WYNN
by: Efsinvestment

Cramer is one of the most joyful stock pickers in the market. In one of the last week’s Mad Money programs, he made four bullish and two bearish calls which took my attention. I have investigated all of these stock mentions from a fundamental perspective, adding my O-Metrix Grading System where necessary. Here is a fundamental analysis of these stocks from Cramer's Mad Money:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Enbridge Energy

EEP

Long-Term Buy

N/A

Hold

Enterprise Products Partners

EPD

Long-Term Buy

2.17

Buy

Clearwire

CLWR

Avoid

N/A

Avoid

Sprint

S

Avoid

N/A

Avoid

Las Vegas Sands

LVS

Buy

3.55

Buy After Pullback

Wynn Resorts

WYNN

Buy

2.16

Hold

Cramer says that Enbridge and Enterprise Products are good MLPs, and he believes that their cash flow stories are well enough for the long run.

Enbridge shows a forward P/E ratio of 17.23, as of Sep 13. Analysts expect the company to have a 2.71% annual EPS growth in the next five years. Profit margin in 2010 was -1.33%, while shareholders enjoyed a 7.60% dividend.

Insiders own only 0.05% of the stock, and insider transactions have decreased by 14.17% in the last six months. Target price implies about 18% upside potential, while it is trading 16% lower than its 52-week high. Earnings decreased by 178.03% this year. While SMA50 is -0.55%, SMA200 is -5.29%. Enbridge returned -5.5% in a year, and debt-to assets ratio is slowly increasing for the last five years. Operating margin is 2.2%, crushed by the industry average of 49.1%. ROA is -1.80%. Analysts do not expect Enbridge to show a significant performance in the future. While I like the nifty, I am not sure whether it is sustainable.

Enterprise Products, on the other hand, has a P/E ratio of 25.83, and a forward P/E ratio of 19.31, as of Sep 13. Analysts estimate an annualized EPS growth of 7.46% for the next five years. With a profit margin of 2.7%, Enterprise Products offered a nifty dividend of 5.97% last year.

O-Metrix score of the company is 2.17, and insiders own only 0.55% of the stock. Target price indicates an about 16.2% increase potential, while it is currently trading 5.48% lower than its 52-week high. The stock returned 8.5% in a year, and debt-to assets ratio is nearly stable. Operating margin is 5.9%, way below the industry average of 49.1%.

Enterprise kept increasing its dividend for the last four yields. Earnings increased by 96.60% this quarter, and 16.66% this year. P/S (0.6) and debt-to equity ratio (1.2) are trustworthy green flags. 16 out of 19 analysts covering the company recommend buying, while 2 suggest outperform. Moreover, the company has a 1.1 rating by analysts (1=Buy, 3=Sell). I think it is a good stock for the long-term.

Cramer says that Clearwire should not be “taken over by Sprint,” because Clearwire has been an underperformer. Here is a brief comparison between these two stocks:

Ratios

Clearwire

Sprint

P/E ratio

-2.8

-3.3

Forward P/E ratio

-2.7

-5.4

Estimated EPS growth for the next 5 years

2.3%

5.5%

Dividend yield

-

-

Profit margin

-73.8%

-9.5%

Gross margin

-31.5%

45.4%

Upside movement potential

160.0%

61.6%

Clearwire is trading 67.11% lower than its 52-week high, while Sprint is trading 46.67% lower. Clearwire returned -59.2% in the last twelve months, and Sprint returned -22.1% in the same period. Both of their debt-to assets ratios are increasing for the last four years, and both of them have a 2.40 average analyst recommendation (1=Buy, 5=Sell). Sprint is relatively less ‘horrible’ than Clearwire. However, I would not keep any of the two in my portfolio.

Cramer believes that both Las Vegas Sands and Wynn Resorts are buys. However, he prefers Wynn.

Las Vegas Sands is trading at a P/E ratio of 39.29, and a forward P/E ratio of 19.5. Morningstar suggests five-year annual EPS growth forecast of 19.0%, whereas Finviz suggests 57%. It has no dividend policy, while the profit margin (12.4%) more than triples the industry average of 3.8%.

The company had a tremendous EPS growth of 6490.97% this quarter, and 162.59% this year. Target price is $56.10, which indicates an about 18% upside movement potential. The stock is currently trading 14.81% lower than its 52-week high, while it returned 48.5% in a year. Debt-to assets ratio is swiftly going down for the last four years. Operating margin (23.5%), profit margin and ROE (16.1%) are solid green flags. O-Metrix score is 3.55. SMA50 and SMA200 are 7.92% and 7.89%, respectively. Moreover, the stock has a four-star rating from Morningstar. P/E- forward P/E ratios are too high for me, but I would wait for a pullback if I were to invest in Las Vegas Sands. In any case, the stock is bouncing within $36 - $52 zone for the last 10 months. It is a perfect stock to buy low and sell high if you can get the timing right.

Wynn, on the other hand, shows a trailing P/E ratio of 50.8, and a forward P/E ratio of 24.6. Estimated annualized EPS growth for the next five years is 15.0%. With a profit margin of 7.7%, Wynn offered a 1.31% dividend last year.

Insiders own only 0.28% of the stock, while it is trading 11.94% lower than its 52-week high. Wynn returned 68% in the last 12 months, and it has an O-Metrix score of 2.16. Debt-to assets ratio is hovering around 50% for the last two years. P/B is 7.6, and P/S is 3.9, both of which are way above than their industry averages. Insiders have been mostly selling stocks for a while. ROA and ROI are 5.20% and 6.28%, respectively. Wynn is at a critical conjunction point. The stock recently formed a triangle shape, and it may break the formation either up or down. Holding is the best for now.

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