5 Recent Trading Ideas From Fast Money

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Includes: AAPL, HPQ, ORCL, PCP, USB
by: Efsinvestment

Fast Money is one of my favorite financial talk shows on air, and I enjoy watching it regularly. The Fast Money crew makes stock calls, trying to help home gamers pick profitable companies in accordance with the current situation. Recently, they gave names of five stocks that are worth a deeper look. I have investigated these stocks from a fundamental perspective, adding my O-Metrix Grading System where necessary. Here is a fundamental analysis of these stocks from Fast Money: (Data obtained from Finviz/Morningstar is current as of Sep 21):

U.S. Bancorp (USB): Guy Adami notes USB closed up 1 percent on an otherwise benign tape. He's interested in this name. U.S. Bancorp was trading at a P/E ratio of 11.2, and a forward P/E ratio of 9.1, as of the Sept. 21 close. Analysts expect the company to have a 7.80% annualized EPS growth in the next five years. With a profit margin of 21.8%, shareholders enjoyed a 2.08% dividend last year. The company had a 34.82% EPS growth this quarter, and 78.84% this year. It is trading 17.44% lower than its 52-week high whereas it has an O-Metrix score of 4.86. Target price implies a 26.4% upside potential, while it returned 0.3% in a year. ROA and ROE are 1.32% and 14.24%, respectively. Debt-to-equity ratio is 11, far better than the industry average of 1.7. I think this is one of the safest financial stocks in the market. Moreover, it has a four-star rating from Morningstar. Recent dividend history is as follows:

06/28/11

$0.12

03/29/11

$0.12

12/29/10

$0.05

09/28/10

$0.05

Apple (AAPL): Karen Finerman is looking at the tech space and Apple in particular. ''The stock has had a huge run, so take some money off the table,'' she said. It was trading at a P/E ratio of 16.4, and a forward P/E ratio of 12.6, as of the Sept. 21 close. Analysts expect the company to have a 20.85% annualized EPS growth in the next five years. Apple has no dividend policy, while the profit margin was 23.5% in 2010. The company had a 122.15% EPS growth this quarter, and 66.91% this year. Sales increased by 81.98% this quarter. O-Metrix score of Apple is 7.4, while it returned 45.8% in a year. Target price implies a 18.70% upside potential, and it is trading just 1.19% lower than its 52-week high. SMA50 is 9.68%, and SMA200 is 19.40%. ROA and ROE are 27.53% and 41.99%, respectively. Operating margin is 30.4%, while institutions hold 70.42% of the shares. The company has no debts for the last five years, and cash flow is ok. Moreover, it has a five-star rating from Morningstar. I do not see any reason to take any money off Apple. (Read a full analysis of Apple here.)

Precision Castparts Corporation (PCP): Joe Terranova said he's bullish on Precision Castparts. Although the stock hit a 52-week high on Tuesday, he thinks it has more room to run because of a piping contract it recently secured. It was trading at a P/E ratio is 23.3, and a forward P/E ratio of 15.8, as of the Sept. 21 close. Analysts expect the company to have an annualized EPS growth of 13.90% in the next 5 years. Profit margin is 16.5%, and it offered a 0.07% dividend last year. O-Metrix score is 3.57, while the stock is trading 6.01% lower than its 52-week high. Sales rose by 15.79% this quarter, and PCP returned 24.7% in a year. Target price is $179.3, indicating a 11.0% increase potential. Institutions own 94.47% of the shares. Debt-to- equity ratio is 0.1, way better than the industry average of 0.6. Profit margin and ROE, are trustworthy green flags. Recent dividend payments per share are:

09/07/11

$0.03

06/08/11

$0.03

03/02/11

$0.03

12/01/10

$0.03

Hewlett-Packard Company (HPQ): Brian Kelly says ''something else is going on at HP, if HP shows Apotheker the door, it opens up the possibility of HP being a take out target.''

HPQ was trading at a P/E ratio of 5.3, and a forward P/E ratio of 5.0, as of the Sept. 21 close. Analysts expect the company to have an 7.91% annualized EPS growth in the next five years. With a profit margin of 7.3%, shareholders enjoyed a 2.14% dividend last year. Earnings increased 24.9% this quarter, and O-Metrix score is 9.6. The stock is currently trading 50.93% lower than its 52-week high. Target price implies a 47.0% upside potential, while it returned -6.0% in a year. ROA and ROE are 7.65% and 23.04%, respectively. Operating margin is 9.5%, and gross margin is 24.2%. Institutions own 64.53% of the shares. Debt-to equity ratio is 0.5, far better than the industry average of 8.0. Moreover, it has a five-star rating from Morningstar. Here is the recent dividend history of Hewlett-Packard Company:

09/12/11

$0.12

06/13/11

$0.12

03/14/11

$0.08

12/13/10

$0.08

Oracle Corporation (ORCL): Kelly suggests Oracle and says “The stock is cheap and former HP CEO Mark Hurd is over at Oracle. Perhaps it opens that door.” The stock was trailing P/E ratio of 17.0, and a forward P/E ratio of 11.2, as of Sept. 21’s close. Analysts estimate a 13.30% annual EPS growth for the next five years. It paid a 0.85% dividend, while the profit margin was 24.0% in 2010.

Earnings increased 37.82% this year, and O-Metrix score is 5.0. The stock is currently trading 18.93% lower than its 52-week high. Target price implies a 22.3% upside potential, while it returned 3.31% in a year. ROA and ROE are 12.65% and 24.22%, respectively. Operating margin is 33.8%, and gross margin is 76.4%. Debt-to-equity ratio is 0.4, far better than the industry average of 10.7. Moreover, it has a four-star rating from Morningstar. Assets are steadily increasing. Recent dividend history is as follows:

07/11/11

$0.06

04/11/11

$0.06

01/14/11

$0.05

10/04/10

$0.05



Disclosure: I am long AAPL.