4 Cramer Ideas Revisited

The year 2011 was quite an unstable year for investors. It was full of crises and recessions, making it exceedingly hard to gain profits. It was very hard for stock pickers to lead investors out of the storm. Jim Cramer had difficulties as well, doing his best trying to shelter his followers' investments as much as possible. Now that 2012 has started relatively smoothly, Jim Cramer is diversifying his stock calls to offer a more profitable portfolio. In January 4th's Lightning Round, he made four stock calls that are worth a deeper investigation. I have examined these stocks in this article, and added my opinion along with O-Metrix grades. Here is a fundamental analysis of these six stocks from Cramer's January 4 Lightning Round:

Stock Name	Ticker	Cramer's Suggestion	O-Metrix Score	My Take
Halliburton	(HAL)	Long-Term Buy	9.32	Buy
Verizon	(VZ)	Sell Some for Now	3.64	Buy After Pullback
AT & T	(T)	Buy	3.79	Alternative is better
EOG Resources	(EOG)	Buy	9.32	Buy

(Data obtained from Finviz/Morningstar, and current as of January 5. You can download the O-Metrix calculator here.)

Halliburton (HAL)

The Mad Money host recommends staying long on Halliburton. It has a P/E ratio of 11.9, and a single-digit forward P/E ratio of 8.5. Analysts estimate an 18.0% annualized EPS growth for the next five years. It has a 1.03% dividend yield, and the profit margin is 11.1%, above the industry average of 8.4%.

Even though Halliburton didn't do well in 2011, analysts are pretty bullish on it. Although it is paying the same dividend since May 2007, the company will have a 40% discount to its 5-year average due to its forward earnings of below 9. Moreover, it has a PEG value of 0.4, which leads the discount to 5-year average to over 60%. Cash flow, assets, and revenue are great. The company has at least 100% upside potential. Get in while you still have the chance. Halliburton has a higher-than average O-Metrix score of 9.32

Verizon (VZ) vs. AT& T (T)

Cramer made the following remarks on these two telcos:

It is okay to take a little off the table, but if you do, I would roll some into AT&T. I like Verizon.

Here is a brief comparison of these two stocks, current as of January 6:

Verizon	AT& T
P/E ratio	15.7	15.5
Forward P/E ratio	15.6	12.4
Estimated EPS growth for the next 5 years	6.3%	4.8%
Dividend yield	5.10%	5.78%
Profit margin	6.5%	9.3%
Gross margin	59.2%	57.2%
Upside movement potential	1.0%	6.8%

Technically, it is hard to choose between Verizon and AT&T. However, I don't find AT&T trustworthy after the failure of the T-Mobile deal. Although AT&T is big enough to keep going with or without the deal, the withdraw will surely show its effect on the balance sheet. The failure of AT&T's T-Mobile deal has pushed Verizon into sky-high prices for its size, bringing it into the overbought territory. Moreover, Verizon is doing strategic acquisitions to gain the upper hand against its rivals. Nevertheless, Verizon seems to be a better bet in 2012. It is a good buy after a pullback. O-Metrix scores of Verizon and AT&T are 3.64 and 3.79, respectively.

EOG Resources (EOG)

The Mad Money host believes that EOG is "worth $50 more," and he wants to "buy it with both hands." The Texas-based oil company is selling at 26 times earnings, and 22 times forward earnings. Analysts are pretty bullish on EOG's EPS growth estimate, predicting a 44.3% annual growth in the next five years. It pays a poor dividend of 0.63%, and the profit margin is 11.2%, lower than the industry average of 14.2%.

Based on these numbers, EOG Resources has a higher-than average O-Metrix score of 9.32. Dividends, assets and revenue are tidy. Institutional ownership (95.58%) and PEG value (0.4) are two other convincing numbers. If you're looking for a large cap stock with high volume & steady performance, then EOG Resources is a strong candidate for your portfolio.

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