2 Buy And 2 Sell Ideas From Jim Cramer

by: Efsinvestment

Markets are at a breaking point currently, as everything is tied up with Greece for the time being. Although the Greek government just had a confidence vote, the eurozone crisis will keep being a pain for the entire world economy. Prior to that, the unemployment rate in the U.S. caused another critical problem. Even though everyone is trying to get rid of this economic unrest, the current situation does not seem very optimistic. It is a strong probability that investors might want to avoid risks, and return to safe havens again.

In November 4’s Lightning Round, Jim Cramer talked about only four companies, making two bullish and two bearish calls. 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 appropriate, as well. Here is a fundamental analysis of these stocks from Cramer's November 4 Lightning Round:

Stock Name


Cramer's Suggestion

O-Metrix Score

My Take

Southern Copper




Long-Term Buy






Iconix Brand Group





Huron Consulting Group




Buy After Pullback

Data obtained from Finviz/Morningstar, and is current as of November 4 close. You can download the O-Metrix calculator here.

Southern Copper

Cramer is bullish on Southern Copper, as he thinks that it sports a good yield. It shows a trailing P/E ratio of 13.5, and a forward P/E ratio of 10.6, as of October 4. Estimated annual EPS growth for the next five years is 16.0%. With a profit margin of 32.4%, and a dividend of 8.86%, Southern Copper is a marvelous stock for dividend lovers.

The stock is trading 34.09% lower than its 52-week high, while it has an O-Metrix score of 10.29. Target price is $37.67, which implies a 19.1% upside potential. Earnings increased by 110.24% this quarter, and 67.35% this year. Southern Copper returned -32.2% in a year, while yields are consistent. SMA20 is 9.71%, whereas SMA50 is 8.11%. Gross margin and operating margin are 59.6% and 52.2%, respectively. While ROA is 26.16%, ROE is 50.95%. ROI is 29.89%. PEG value is 0.7, whereas average analyst recommendation is 1.5 (1=Buy, 3=Sell). The yield is good, as well as growth. Buy it for a long-term play.


Cramer is bullish on the company, and he made the following remarks:

I'm a buy, buy, buyer of that company. When it splits, you'll be making money.

The New York-based company, as of Friday’s close, was trading at a P/E ratio of 15.3, and a forward P/E ratio of 13.2. Analysts estimate a 9.7% annualized EPS growth for the next five years. Profit margin (13.5%) crushes the industry average of 2.1%, and it offers a 2.35% dividend.

McGraw returned 8.0% in the last twelve months, while it is currently trading 9.58% lower than its 52-week high. O-Metrix score is 4.22, and its target price indicates an about 12.2% increase potential. Institutions hold 88.53% of the shares, whereas earnings increased by 13.75% this year. Yields are appetizing. The debt-to-assets ratio is decreasing since 2008, and cash flow is doing all right. Debt-to-equity ratio is 0.5, which crushes the industry average of 4.4. Gross margin is 61.5%. ROE and ROI are 39.21% and 25.26%, respectively. 5 out of 10 analysts covering the company recommend buying, and my opinion is the same.

Iconix Brands

This stock “has had a big run,” the Mad Money host said, recommending homegamers to stay away. The company has a P/E ratio of 11.1, and a forward P/E ratio of 10.0, as of the October 4 close. Five-year annual EPS growth forecast is 18.5%, which sounds reasonable when its 23.61% EPS growth of past five years is considered. It has no dividend policy, while the profit margin (33.4%) crushes the industry average of 8.4%.

Target price is $27.50, implying a 51.5% upside movement potential. Iconix is currently trading 30.33% lower than its 52-week high, and O-Metrix score is 8.76. Institutions hold 100.00% of the shares, while earnings increased by 20.35% this year. SMA20 and SMA50 are 4.44% and 4.06%, respectively. The debt-to-assets ratio is sharply going down for the last four years. Operating margin is 62.4%. PEG value is 0.5, whereas analysts give a 1.3 rating for the company (1=Buy, 3=Sell). Iconix got hammered enough, and I believe it will go up after a short time.

Huron Consulting Group

Cramer does not like Huron Consulting, and he made the following remarks:

This one has been red hot. I can't say buy it up here.

The company, as of the Friday close, shows a trailing P/E ratio of 40.0, and a forward P/E ratio of 15.9. Analysts expect the company to have a 15.7% annualized EPS growth for the next five years. Profit margin (2.7%) is well below the industry average of 6.3%, and it offers no dividend.

Huron is trading only 3.40% lower than its 52-week high, while it has an O-Metrix score of 2.80. Target price is $37.75, indicating a 1.5% growth potential. The company returned 62.0% in the last twelve months, whereas Beta value is 0.85. Huron had a 160.35% EPS growth this quarter, and 158.45% this year. Sales rose by 17.12% this quarter. Institutions hold 85.71% of the shares, whereas PEG value is 1.0. SMA20, SMA50, and SMA200 are 7.25%, 15.37% and 26.25%, respectively. I would pick more profitable ones instead, but wait for a pullback if you insist on buying this one.

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

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