5 Latest Stock Picks By Jim Cramer

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Includes: BB, CVC, DECK, KO, PEP, VEOEY
by: Efsinvestment

I have been writing about Jim Cramer’s Lightning Round stock mentions for a while. In September’s latest Lightning Round, he closed the month with interesting stocks like Research In Motion (RIMM), and Cablevision Systems (NYSE:CVC). I have examined all of his stock mentions from a fundamental perspective, and added my opinion about them. I have applied my O-Metrix Grading System where possible, as well. Here is a fundamental analysis of these stocks from Cramer's September 30 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Research In Motion

(RIMM)

Avoid

7.59

Buy

Veolia Environnement

(VE)

No Calls

N/A

Avoid

Cablevision Systems Corp.

(CVC)

Buy

11.23

Buy

PepsiCo Inc.

(NYSE:PEP)

Long-Term Buy

3.74

Alternative is Better

Deckers Outdoor Corp.

(NASDAQ:DECK)

Sell Some and Hold the Rest

5.67

Buy

Data obtained from Finviz/Morningstar, and is current as of September 30. You can download O-Metrix calculator, here.

Cramer thinks that Research in Motion is going lower, and this is “the wrong time to own it.” It has a P/E ratio of 3.9, and a forward P/E ratio of 4.4, as of September 30. Five-year annual EPS growth forecast is 6.3%, which sounds conservative given the 58.34% EPS growth in the last five years. It pays no dividend policy, while the profit margin (14.3%) is better than the industry average of 9.6%.

Target price is $31.27, implying a 54.0% upside potential. The stock is trading 71.22% lower than its 52-week high, whereas it returned 59.5% in a year. O-Metrix score is 7.59. The company has zero debts, while assets are increasing for the last five years. Earnings increased by 46.92% this year, and institutions hold 60.57% of the shares.

ROA and ROE are 23.50% and 33.50%, respectively. PEG value is 0.7. The bears are in control, but come on. Even with zero, the earnings are enough to amortize the stock within 4 years. Although this stock is having rough times, I believe it can beat the market in the long run. RIMM offers a great opportunity to contrarian investors.

Cramer will do some homework to find out if Veolia’s dividend is sustainable. Veolia shows a trailing P/E ratio of -24.0, and a forward P/E ratio of 10.0, as of Friday’s close. Estimated annual EPS growth for the next five years is 7.0%. Although profit margin (0.4%) is crushed by the industry average of 7.4%, it pays a gorgeous dividend of 10.11%.

Earnings decreased by 247.92% this quarter, and 2.98% this year. SMA50 and SMA200 are -14.48% and -44.05%, respectively. Target price is $21.45, which implies a 47.3% upside potential. The stock is trading 54.51% lower than its 52-week high, while it returned -44.7% in the last twelve months. Debts are increasing for the last five quarters, and institutions hold only 2.28% of the shares.

While gross margin is 15.2%, operating margin is 3.4%. ROA and ROE are 0.28% and 1.83%, respectively. PEG value is 1.4. Moreover, Morningstar gives a three-star rating for Veolia. Under these circumstances, I do not think that Veolia’s dividend is sustainable.

Cablevision offers about a 4% yield, so Cramer is a buyer. As of the September 30 close, Cablevision shows a trailing P/E ratio of 11.2, and a forward P/E ratio of 10.3. Analysts estimate a 20.35% annual EPS growth for the next five years. It offers a 3.81% dividend, while the profit margin is 5.6%.

Cablevision had a 262.13% EPS growth this quarter, and 44.52% this year. O-Metrix score is 11.23, whereas it returned -40.3% in a year. Target price indicates an about 77.7% upside movement potential. Institutions own 67.60% of the stock, and it is currently trading 42.55% lower than its 52-week high.

Debt-to equity ratio is 0.0, far better than the industry average of 7.6. Gross margin is 57.6%, and Morningstar gives a four-star rating to the company. 13 out of 22 analysts recommend buying, and I agree with them.

Cramer suggests buying some Pepsi and “putting it away,” as it has a good long-term growth, along with a 3.3% yield. Pepsi was trading at a P/E ratio of 15.9, and a forward P/E ratio of 13.0, as of the Friday close. Five-year annualized EPS growth is 7.5%. With a profit margin of 10.1%, Pepsi offers a 3.33% dividend.

Earnings increased by 18.72% this quarter, and the stock is trading 12.57% lower than its 52-week high. O-Metrix score is 3.74, while it returned 7.7% in a year. Yields are impressive. The debt- to assets ratio is nearly stable for the last five quarters, and cash flow is all right. Gross margin is 53.9%. ROE and ROI are 28.97% and 13.29%, respectively. Moreover, it has a four-star rating from Morningstar.

However, Coca Cola (NYSE:KO) is a better buy for me. As of September 30, Coca-Cola has a P/E ratio of 12.9, and a forward P/E ratio of 16.1. It pays a 2.78% dividend, while the profit margin (29.7%) is way better than Pepsi. O-Metrix score is 3.71. Coca Cola returned 14.2% in the last twelve months. Coca-Cola is relatively less volatile, and it has more green flags than Pepsi. Analysts give a 2.30 rating for Pepsi, and 1.80 for Coca-Cola (1=Buy, 5=Sell). (Full analysis of Coca-Cola, here.)

Cramer suggests taking a little Deckers off the table, as it needs a breather. As of the September 30 close, Deckers shows a trailing P/E ratio of 26.5, and a forward P/E ratio of 16.3. Estimated annualized EPS growth is 24.3% for the next five years. It has no dividend policy, while the profit margin (13.4%) is better than the industry average of 8.3%.

Deckers returned 86.6% in the last twelve months, whereas it is currently trading 11.97% lower than its 52-week high. Target price is $113.69, which implies a 22.0% upside potential. O-Metrix score is 5.67. Earnings increased by 35.84% this year, while instutitons own 98.89% of the stock. PEG value is 0.7. Assets are increasing for the last five years, and it has zero debts. Cash flow is doing great. Average analyst recommendation is 1.2 for Deckers (1=Buy, 3=Sell). I wouldn’t ignore this stock.

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