8 Buy And 2 Sell Ideas From Jim Cramer

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Includes: CSX, DECK, ESRX, FOSL, NSC, PVH, RCL, RL, TOT, VFC
by: Efsinvestment

Greece is going for a referendum, and markets are exceedingly fragile for the time being. It seems that the Greek people will determine the future of the global markets. While there are both ups and downs currently, this moment should be dealt with using extreme caution. Jim Cramer is helping you to choose stocks in this unreliable environment. In November’s first Lightning Round program, he made ten calls that are worth a deeper look. Eight of them were bullish this time, and the rest bearish. 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 November 1 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Total SA

(TOT)

Buy

5.92

Long-Term Buy

CSX Corp.

(CSX)

Buy, but alternative is better

6.89

Buy

Norfolk Southern

(NSC)

Buy

7.12

Buy

Express Scripts

(ESRX)

Buy

6.15

Buy

Royal Caribbean Cruises

(RCL)

Buy at $25

9.87

Long-Term Buy

Fossil, Inc.

(FOSL)

Alternatives are better

4.59

Buy

VF Corp.

(VFC)

Buy

3.59

Buy After Pullback

Ralph Lauren

(RL)

Buy

3.25

Buy After Pullback

Phillips-Van Heusen

(PVH)

Buy

4.60

Hold

Deckers Outdoor

(DECK)

Buy

4.80

Buy After Pullback

(Data obtained from Finviz/Morningstar, and is current as of November 1 close. You can download the O-Metrix calculator here.)

Total SA

Cramer believes that Total SA is on weakness, and this is “a good level to buy it.” The oil company has a reputable P/E ratio of 7.2, and a forward P/E ratio of 6.8, as of November 1. Estimated annual EPS growth is 1.9% for the next five years. Profit margin (7.5%) is slightly higher than the industry average of 7.4%, while it sports a 6.39% dividend.

The company is currently trading 17.92% lower than its 52-week high, and its O-Metrix score is 5.92. Target price is $64.24, implying a 27.8% upside movement potential. Total SA returned -9.6% in a year, and it has a four-star rating from Morningstar. Earnings increased by 24.74% this year, and 16.39% this quarter. Debt-to-equity ratio is 0.3, below the industry average of 0.6. Debts are far from being a threat, whereas SMA50 is 7.02%. Average analyst recommendation for Total SA is 1.90 (1=Buy, 5=Sell). It is obviously impossible for the company to outperform until the solution of eurozone crisis, but it will reward its shareholders after then.

CSX vs. Norfolk Southern

While Cramer likes CSX, he would prefer going with Norfolk Southern. Here is a brief comparison of these two stocks:

Current as of November 1 close.

CSX

Norfolk Southern

P/E ratio

13.2

13.9

Forward P/E ratio

11.2

12.3

Estimated EPS growth for the next 5 years

14.6%

16.3%

Dividend yield

2.23%

2.37%

Profit margin

15.5%

17.1%

Gross margin

67.8%

63.2%

Upside movement potential

23.6%

13.2%

CSX is currently trading 20.14% lower than its 52-week high, while Norfolk is trading 6.72% lower. O-Metrix scores of CSX and Norfolk are 6.89 and 7.12, respectively. CSX returned 3.3% in a year, and Norfolk returned 16.5%. Morningstar gives a four-star rating to CSX, and a three-star rating to Norfolk. Both of them are buys for me.

Express Scripts

Cramer like Express Scripts, and made the following remarks about the company:

I like this stock...I like this pullback. I think in the end, 2012 is going to be big. Pfizer, listen to that conference call, it was great, but Pfizer has drugs coming off patent. That is going to be good for ESRX. The merger with MedcoHealth, that is going to be good for ESRX. I think Walgreen has to come back to the table, but if they don't, they are going to lose a lot of business and ESRX isn't...

The healthcare company, as of the November 1 close, shows a trailing P/E ratio of 17.3, and a forward P/E ratio of 12.1. Analysts estimate an 18.1% annual EPS growth for the next five years. It offers no dividend, while the profit margin (2.9%) is below the industry average of 4.1%.

Earnings increased by 42.57% this year, and 15.68% this quarter. Target price is $57.73, which implies a 30.6% upside potential. The stock is trading 27.46% lower than its 52-week high, whereas it returned -13.6% in the last twelve months. O-Metrix score is 6.15. The debt-to-assets ratio is falling since 2007, and cash flow is doing OK. Institutions hold 97.79% of the shares. SMA20 and SMA50 are 8.65% and 5.27%, respectively. ROE is 48.84%, and ROI is 22.16%. PEG value is 0.7, while the company has a four-star rating from Morningstar. Consider adding this stock to your portfolio.

Royal Caribbean

Cramer recommends buying Royal Caribbean when it drops to $25 a share. As of November 1, it was trading at a P/E ratio of 9.4, and a forward P/E ratio of 8.6. Five-year annualized EPS growth forecast is 17.4%. It pays a razor thin dividend of 0.37%, and profit margin is 8.6%.

Royal Caribbean is currently trading 45.24% lower than its 52-week high, while it has an O-Metrix score of 9.87. Target price indicates an about 39.0% increase potential, and it returned -29.9% in a year. Royal Caribbean had a 233.33% EPS growth this year, and 13.19% this quarter. SMA20 and SMA50 are 5.17% and 10.80%, respectively. Insiders hold 37.02% of the shares. Debt-to equity ratio is 1.0, lower than the industry average of 1.3. PEG value is 0.5, and analysts give a 1.4 rating for Royal Caribbean (1=Buy, 3=Sell). This stock is an advantageous long-term play (full analysis, here).

Apparel Stocks

Cramer did an interesting ranking when it comes to trading apparel stocks:

What do I like more (than Fossil, Inc.) when I do my wild apparel trading? I like PVH more, I like Ralph Lauren more, I like VF Corp more and I like Deckers more.

Here is a brief comparison of these five stocks:

Current as of November 1 close.

Fossil

PVH

Ralph Lauren

VF Corp

Deckers

P/E ratio

24.0

19.9

24.4

23.8

30.8

Forward P/E ratio

18.0

12.7

20.2

14.4

18.7

Estimated EPS growth for the next 5 years

19.3%

14.8%

14.0%

11.6%

23.8%

Dividend yield

-

0.20%

0.51%

2.13%

-

Profit margin

11.7%

4.9%

10.5%

7.7%

13.4%

Gross margin

56.6%

53.1%

59.1%

46.6%

49.9%

Upside movement potential

8.0%

8.5%

-5.3%

6.7%

3.5%

Ralph Lauren and VF Corp seems pretty expensive as they have the poorest O-Metrix scores. While the estimated growth rates for these companies are pretty high, this is already priced by the market.

PVH is currently trading 2.80% lower than its 52-week high, whereas Deckers is trading 5.44% lower. O-Metrix scores of PVH and Deckers are 4.60 and 4.80, respectively. PVH returned 20.1% in the last twelve months, while Deckers returned 98.3%. Deckers still has some potential, but after such a run, it looks pretty scary to buy at this level. I will rate Fossil a buy, and PVH a hold. The other three can be bought after a pullback.

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