Jim Cramer is the host of the wildly popular “Mad Money” show on CNBC. He is famous for making big bold calls, liking momentum stocks and preferring dividend yielding stocks. On his show November 8, Cramer discussed several stocks.
Here are five that have market caps over $1B, P/E ratios under 17 and Cramer’s recommendation of buy:
American Electric Power (AEP) is an electric utilities company based in the US. It has a market cap of $18.56B and a forward P/E ratio of 11.97. The company has returned 12.30% YTD and has a beta of 0.52. John Levin’s Levin Capital Strategies likes AEP, as does Phill Gross and Robert Atchinson’s Adage Capital Management. Jim Simons’ Renaissance Technologies is a fan as well. AEP’s closest competitor is Entergy Corporation (ETR). AEP has the larger market cap (ETR’s is just $12.06B), higher quarterly growth (6.60% vs. ETR’s 1.90%) and higher revenue ($15.11B vs. ETR’s $11.27B). AEP has strong numbers and a $1.88 dividend, which is just like the cherry on the cake.
Apple (AAPL) is a personal computers based in the US. It has a $367.38B market cap and a forward P/E ratio of 10.19. The company has returned 22.54% YTD and has a beta of 1.21. Rob Citrone’s Discovery Capital Management, Stephen Mandel’s Lone Pine Capital and D.E. Shaw’s D E Shaw each had positions in AAPL worth over $600M at the end of the second quarter. Google (GOOG) is a close competitor to AAPL. It has very similar characteristics – both are high growth stocks trading at low multiples. We like AAPL. It has good potential for growth and, in comparing it to its rivals, AAPL has the lower P/E (13.88 to GOOG’s 20.29) and higher revenue ($108.25B vs. GOOG’s $35.76B).
Domino’s Pizza (DPZ) is a pizza delivery chain based in the US. It has a $1.86B market cap and a 16.96 forward P/E ratio. It has returned 99.94% YTD and has a beta of 1.07. Nelson Peltz’s Trian Partners likes DPZ, so does James Crichton and Adam Weiss’ Scout Capital Management and Glenn Fuhrman and John Phelan’s Msd Capital. DPZ’s closest competitor is Papa John’s (PZZA). In comparison, DPZ has higher revenue ($1.60B to PZZA’s $1.20B) while PZZA has the lower forward P/E, coming in at 14.59. YUM Brands (YUM), the company that owns Pizza Hut, is also a competitor, but it has so many brands under its management, like Taco Bell and KFC, that a strong comparison between YUM and DPZ is impossible. We like DPZ and think management is doing very well at turning things around there.
Fluor Corporation (FLR) is a heavy construction industrial goods company based in the US. It has a $9.02B market cap and a 13.42 forward P/E. The company is down -19.34% YTD and has a 1.37 beta. FLR is a favorite pick for Jim Simons’ Renaissance Technologies, Peter J. Eichler Jr.’s Aletheia Research And Management and Ric Dillon’s Diamond Hill Capital. Jacobs Engineering Group (JEC) is FLR’s closest publicly traded company. In comparison, FLR is bigger (JEC has a $4.84B market cap) and has higher much revenue ($22.40B to JEC’s $10.00B). Foster Wheeler AG (FWLT) is another company similar to FLR, albeit much smaller at a $2.22B market cap. We like FLR. It recently announced it is expanding its teaming arrangement with GE Hitachi in Europe, which should only position it even better. FLR recently traded at $53.35 a share. Analysts expect it will hit $72.13 in the next year.
Windstream (WIN) is a domestic telecom services company based in the US. It has a $6.01B market cap and a forward P/E of 13.87. Its shares are down -10.27% so far this year. It has a 0.84 beta. WIN also pays an impressive dividend of $1.00, or roughly 8.30% of its current trading price of $11.85. Telecom stocks are similar to utilities except they are better. They have higher dividend yields, higher expected growth rates, and similar price multiples. Jim Simons’ Renaissance Technologies also likes WIN. The stock is popular with Stuart Peterson’s Artis Capital Management and D.E. Shaw’s D E Shaw. Sprint Nextel Corp (S) is WIN’s closest competitor with its $8.46B market cap. In comparison, WIN has lost -10.27% YTD while S has lost -35.22%. WIN also has a lower beta at 0.84, compared to Sprint’s 1.03.
