This is the second of two articles in a series that examines positions recently acquired by television investment star Jim Cramer for his charitable trust. I take a look at some of his picks to see what the metrics and headlines say about them.
Fluor Corporation (NYSE:FLR) – This provider of industrial engineering, construction, maintenance and project management services is currently trading around $49 a share. Cramer purchased 400 shares for the trust. Its closing price has fluctuated from $44.16 to $75.76 over the past 52 weeks. Its dividend yield is 1.10 percent or $0.50 a share. Management declared a quarterly dividend of $0.125 in August. Its payment history over 10 years old. Earnings per share is $2.06, and price to earnings ratio is a little high at 24.07.FLR’s profit margin is 1.69 percent. Its quarterly revenue growth is 17.10 percent, and its quarterly earnings growth is 5.20 percent. Total debt is $43.26 million, and total cash is $2.22 billion. Market capitalization is $8.64 billion.
Its rival Jacobs Engineering Group Inc. (NYSE:JEC) is trading near $34 a share with a 52-week range of $30.74 to $55.73. It does not pay a dividend. Earnings per share is $2.47, and price to earnings ratio is 13.65. JEC’s profit margin is slightly higher at 3.14 percent. Its growth percentages are impressive. Quarterly revenue has grown by 9.40 percent, and quarterly earnings have grown by 376.20 percent. JEC carries $551.2 million in total debt and $773.82 million in total cash. Market capitalization is $4.31 billion.
Industry professionals see infrastructure markets as having long-term growth potential, particularly if additional government stimulus packages are adopted. Analyst recommendations trend toward “Strong Buy” and “Buy.” Revenue is expected to increase next quarter and next year.
FLR offers a modest dividend yield and a track record of consistent payments. It is trading low. Its outlook is positive. This is another solid foundation stock that should perform well in the long term as broader economic conditions improve.
Freeport-McMorRan Copper & Gold Inc. (NYSE:FCX) – Cramer initiated his position with 800 shares. Currently trading around $34 a share, this mining company has ranged in closing price from $28.85 to $61.35 over the past 52 weeks. Its dividend yield is 3.3 percent or $1. Since a 2:1 stock split in February, FCX has paid two dividends of $0.25 each. Its payment track record dates back a couple of decades, though the amounts of payouts have varied. Earnings per share is $5.87, and price to earnings ratio is 5.87. Profit margin is 25.11 percent. FCX is showing impressive growth results. Quarterly revenue growth is 50.50 percent, and quarterly earnings growth is 106 percent. It shows $3.54 billion in total debt on its balance sheet and $4.38 billion in total cash. Market capitalization is $32.48 billion.
Its rival copper and gold miner Newmont Mining Corp. (NYSE:NEM) is trading near $63 a share. It has ranged from $50.50 to $71.25 over the past year. Its dividend yield is 1.9 percent or $1.20. It has paid a dividend for 24 years. Its most recent quarterly payment of $0.30 was declared in September. NEM’s profit margin is 22.51 percent. Quarterly revenue growth is 10.70 percent, and quarterly earnings growth is 1.3 percent. NEB carries $4.31 billion in debt and $2.06 billion in cash on its balance sheet. Market capitalization of $31.2 billion.
FCX is well priced and well valued. Headlines are abuzz with its low cost and potential for gains. Analysts like it, as recommendations trend toward “Strong Buy” and “Buy.” Estimates for earnings and revenue point to continued growth, albeit modest. And it pays a dividend. It makes sense for Cramer’s trust.
H.J. Heinz Co. (HNZ) – This food products manufacturer is currently trading near $50. Cramer purchased 500 shares for his charitable trust. Its closing price has fluctuated from $46.99 to $55 over the past 52 weeks. Its dividend yield is 3.8 percent or $1.92. HNZ declared a quarterly dividend of $0.48 in September. It has paid dividends for 27 years. Earnings per share is $3.01, and price to earnings ratio is 19.59. HNZ’s profit margin is 8.81 percent. Its quarterly revenue growth is 14.90 percent. Quarterly earnings have declined by 6 percent. Its balance sheet carries $4.64 billion in total debt and $700.5 million in total cash. Market capitalization is $15.95 billion.
Its counterpart Campbell Soup Co. (NYSE:CPB) is trading near $33 a share. Its 52-week range is $29.69 to $36.99. Its dividend yield is 3.6 percent or $1.16. CPB has paid dividends for decades. Its most recent dividend, a quarterly payment of $0.29, was declared in July. Earnings per share is $2.42, and price to earnings ratio is 13.57. Its profit margin is 10.43 percent. Quarterly revenue grew 5.90 percent, but CPB’s quarterly earnings declined by 11.50 percent. Its balance sheet shows $3.08 billion in total debt and $484 million in cash. Market capitalization is $10.51 billion.
HNZ is another established name and industry leader. Its brands are well formed in consumers’ minds. Its price is fair, and again, it pays a very nice dividend. Analyst recommendations trend toward “Hold.” Some rate it an “Underperform.” Others recommend “Strong Buy” and “Buy.” Earnings and revenue are expected to increase steadily. This is another strong foundation stock for the trust.
International Business Machines, Inc. (NYSE:IBM) – The IT products giant with market capitalization of $208.69 billion is trading near $177, which is on the higher end of its 52-week closing range of $136.12 to $185.63. Its dividend yield is modest at 1.7 percent or $3 a share. Management declared a quarterly dividend of $0.75 in August. Earnings per share is $12.32, and price to earnings ratio is 14.36. IBM reports a profit margin is 14.70 percent. Its quarterly revenue and quarterly earnings have grown by 12.40 percent and 8.20 percent, respectively. Its balance sheet shows $29.77 billion in debt and $11.79 billion in cash. Market capitalization is $211.21 billion. Cramer opened his position with 400 shares.
Its rival Oracle Corp. (NYSE:ORCL), which develops and markets database and middleware software and hardware systems, is currently trading near $39.50. Its dividend yield is 0.80 percent or $0.24 a share. Its payment history is only a couple of years long. Most recently ORCL declared a quarterly dividend of $0.06. Earnings per share is $1.76, and price to earnings ratio is 16.79. Profit margin is 24.76. Quarterly revenue and earnings have grown by 11.6 percent and 36.10 percent, respectively. Its balance sheet carries $14.70 billion in debt and $31.66 billion in cash. Market capitalization is $148.87 billion.
Headlines focus on which company is the “new” IBM. Tech companies are carrying a lot of cash, and speculation has it that the sector is in for a spate of mergers and acquisitions. Analysts like IBM as a “Hold,” though some rate it a “Buy” or “Strong Buy.” Its price is a little high, and its dividend fails to turn heads. The company is poised for growth, though. Cramer purchased 400 shares.
iShares Gold Trust (NYSEARCA:IAU) – Cramer purchased 1000 shares of this exchange traded fund for his charitable trust. It is currently trading near $16. It has ranged in price from $12.80 to $18.63 over the past 52 weeks. Its year to date return is 28.20 percent. It is showing $9.75 billion in net assets. The fund seeks to replicate the cost of gold bullion, and it is entirely backed by bullion physically held by a custodian. It is passively managed. When expenses are due, bullion is sold to cover them. Over time, the amount of gold represented by a share in the trust decreases.
SPDR Gold Trust (NYSEARCA:GLD) is another bullion-backed ETF that was established to replicate the price of gold. It is trading near $160, has ranged in price from $127.80 to $185.85, has a year to date return of 28.11 percent, and is showing $71.82 billion in net assets.
Gold has taken center stage as a safe haven during current economic times characterized by a weakening dollar, uncertainty surrounding the global economy, slow to negative growth in the U.S., and inflation. Commodities-backed exchange traded funds are highly speculative, and despite recent drops in price, gold has been trading at all time highs over the past several years. I don’t have a problem with speculative investments in a diversified portfolio like Cramer’s charitable trust, but I am a little surprised to see IAU there.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.