Tracking 5 Jim Cramer Picks From Jan 5th and 6th
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Stock market specialist Jim Cramer recommended that you buy these five stocks one month ago on his January 4th and 5th episodes of Mad Money. In this article, I analyze his picks on a relative value basis and analyze each stock's performance since Cramer's recommendation.
Alexion Pharmaceuticals (NASDAQ: ALXN): Since Jim Cramer recommended this stock about a month ago it has gone from a $70 stock to a $75 stock. Alexion Pharmaceuticals mainly develops treatments for diseases for which other options are non-existent or inadequate. Alexion focuses on antibody therapeutics designed for the treatment of ailments such as cardiovascular and autoimmune disorders, inflammation and cancer. The company's most renowned drug is Soliris. Soliris is the only treatment for Paroxysmal Nocturnal Hemoglobinuria (PNH), a rare blood disorder, and represents the company's main source of revenue. In recent news Alexion Pharmaceuticals is in the process of acquiring Drugmaker Enobia. Enobia also focuses on treating patients with ultra-rare disorders and should fit right in with the company's business model. Enobia currently has a drug, Asfotase Alpha, in the second of three trials needed to pass FDA approval. The drug is showing strong results in the testing and is one of the reasons Alexion is interested in the company. The company's two closest competitors are Amgen Inc. (AMGN) and Baxter International Inc. (BAX). Amgen curently has a PEG ratio of 1.46 with forecast earnings growth of 12% in 2012 and 9% in 2013. Baxter International has a PEG ratio of 1.33 with forecast earnings growth of 7.2% in 2012 and 10% in 2013. Alexion Pharmaceuticals is slightly more expensive with a PEG ratio of 2.23 but its forecast earnings growth of 36.1% in 2012 and 36.6% in 2013 justify this premium.
Halliburton Company (NYSE: HAL): About 30 days ago Jim Cramer recommended you buy stock in Halliburton. The stock was at $35 per share then and it is once again at the $35 level. In fact it has been range bound between $30 per share and $40 per share since October of 2011. The company does however pay a consistent dividend of $.36 per share (annually) and curently has a dividend yield of 1%. The company's earnings also continue to impress in a sector that has experienced significant uncertainty in the short term. Halliburton is still setting historical records for revenue and operating income. Halliburton Company provides services and equipment to aid oil exploration and drilling companies evaluate new prospects but its primary business is to act as a consultant in optimizing preexisting wells. The company's two closest competitors are Baker Hughes Incorporated (BHI) and Schlumberger N.V. (SLB). Baker Hughes Incorporated currently has a PEG ratio of .5 with forecast earnings growth of 27.8% in 2012 and 18% in 2013. Schlumberger currently has a PEG ratio of 1.17 with forecast earnings growth of 0% in 2012 and 22.1% in 2013. Halliburton Company currently has a PEG ratio of .83, indicating it is slightly underpriced for its forecast earnings growth of 24% in 2012 and 14% in 2013.
Kraft Foods (NASDAQ: KRFT): About a month ago Jim Cramer recommended this stock when it was around $37 per share and now it is hitting new 52 week highs at the $38.50 level. The stock is following a well established trend that began in March of 2009 when it was at $22 per share. In addition to capital appreciation the stock also pays out a nice dividend of $1.16 per share-- that yields about 3% at the stock's current price. Kraft Foods is the largest food and beverage company in the United States and the second largest in the world. The company has operations in over 70 countries at this point. The most notable activity the company is undertaking is the splitting of the organization into two separate companies. One will consist of its grocery aspects and the other will consist of its snack operations. This will allow each company to narrow its focus and cut costs. Two of the company's nearest competitors are General Mills (GIS) and Kellogg Company (K). General Mills currently has a PEG ratio of 1.96 with forecast earnings growth of 4.9% in 2012 and 8.6% in 2013. Kellogg Company has a PEG ratio of 1.72 with forecast earnings growth of 4.7% in 2012 and 7.8% in 2013. Kraft Foods is slightly more expensive with a PEG ratio of 2.12 for its forecast earnings growth of 10.3% in 2012 and 10% in 2013.
American Electric Power Company (NYSE: AEP): When Jim Cramer recommended this stock one month ago it was at $40.95 per share and it closed today at $40.85 per share. The stock is in an upward trend with $40 as its mean and has a history of reverting to the mean and below before advancing further. So if you are interested in the stock you may be able to pick it up cheaper. The 52 week high is $41.98 and the volume is light. The company also pays a nice dividend of $1.88 per share (annual) which calculates to an even nicer dividend yield of 4.6% at the current stock price. American Electric Power Company has a history of raising the dividend, albeit not on a consistent basis and raised it last quarter by a penny. American Electric Power is one of the largest electric companies in the United States serving 11 different states. Ohio, Oklahoma and Indiana represent the company's largest service areas. The company's main competitors are CenterPoint Energy, Inc (CNP) and Entergy Corporation (ETR). CenterPoint Energy currently has a PEG ratio of 2.94 with a five year forecast earnings growth of 5.7%. Entergy Corporation has a PEG ratio of 4.62 with a five year forecast earnings growth of only 2%. American Electric Power is priced midrange by comparison with a PEG ratio of 3.29 and five year forecast earnings growth of 4%.
BB&T (NYSE: BBT): When Jim Cramer recommended this stock a month ago it was around $26 per share. Today it closed at $27.74 per share in continuation of a run its been on since the end of November when it was $21 per share. In addition to this capital appreciation BB&T also pays out a dividend of $.64 per share on an annual basis for a dividend yield of 2.3%. The company is classified as a bank holding company with operations in North Carolina, South Carolina, Maryland, Virginia, West Virginia, Kentucky, Tennessee, Georgia, Florida, Alabama, Indiana and Washington, DC. BB&T is the 14th largest bank in the United States and mainly serves consumers and small to medium sized businesses. The company's business model involves diversifying its assets through mergers and acquisition. This seems to be working well lately as the company has had five straight quarters of double-digit growth. Two of the banks nearest competitors are Regions Financial Corporation (RF) and Bank of America Corporation (BAC). Regions Financial Corporation currently has a PEG ratio of 3.69 with a five year forecast earnings growth of 7%. Bank of America Corporation has a PEG ratio of 1 with a five year forecast earnings growth of 7.8%. BB&T currently has a PEG ratio of 1.13 with a five year forecast earnings growth of 10.1%. This makes BB&T fairly priced to relatively inexpensive by comparison.
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