Stock Smackdown: Cramer vs. CAPS

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There's no denying that "Mad Money" host Jim Cramer is entertaining, popular, and passionate. On many occasions, he's even right. So he's smart, funny, and the closest thing to a stock market rock star -- but is he smarter than you?

The Fool's free investing community, Motley Fool CAPS, aggregates the opinion of more than 120,000 members to assign ratings for each stock's likelihood of outperforming or underperforming the market. For the first 20 months since we began tracking the CAPS community's collective intelligence in late 2006, the data shows that newly minted five-star stocks offer the best opportunities for investors, while lowest-rated companies fared the worst.

Cramming for Cramer
Below, we look at some top stocks that Cramer picked and panned during last week's "lightning rounds" and compare them to how the CAPS community sees their future. However, because of the Thanksgiving holiday, only the Monday show was new, so we'll look at his picks for just that day:

Stock

Lightning Round Show Date

Cramer's Rating 

CAPS Rating

Eastman Kodak (NYSE: EK)

Monday

Bearish

*

General Cable (NYSE: BGC)

Monday

Bullish

****

Hewlett-Packard (NYSE: HPQ)

Monday

Bullish

****

Nike (NYSE: NKE)

Monday

Bearish

****

RPM International (NYSE: RPM)

Monday

Bullish

****

United States Steel (NYSE: X)

Monday

Bullish

***

VF Corp. (NYSE: VFC)

Monday

Bullish

****

Cramer says
It's going to take more than strong computer sales and a smart acquisition to win over investors these days, considering Hewlett-Packard turned in some strong results. The company sold more laptops than last year and saw good contributions from its EDS acquisition, but witnessed the market give the stock a shellacking nonetheless. Despite that, Jim Cramer says that in a match-up pitting Hewlett-Packard against Kodak, for example, he would choose the former.

OK... They could be head-to-head with [Hewlett-Packard]. HP reported an outstanding quarter after the close, and yet that stock is off 15 points from its high. I say ix-nay on the [Eastman Kodak]. I need you to go with Hewlett-Packard.

CAPS says
You'd be hard-pressed to find too much disagreement from the CAPS community, where 93% of the members rating Hewlett-Packard see it outperforming the S&P 500. CAPS member Daretoth rhetorically asks whether CAPS bears realize the computer maker would have to do worse than the market averages for their call to win and, in the face of its profits, is incredulous that will happen.

To the bears on this stock: You do realize that even if this stock slows down it has to do worse than the S and P for an underperform call to be right?

Little to no debt (and shrinking), profits, profits, profits...and a decent P/E as well as cutting back on their spending in a time of crisis. This is exactly what companies that will outperform the S and P will be doing in the next year.

While CAPS agrees with Cramer on HP, it plays the opposite side of the field in regards to Nike. Some 93% of the over-1,500 members rating Nike believe it will be a market beater going forward. CAPS All-Star Cmoor thinks the company will remain a world leader:

Recently raised its dividend and appears to be able to weather any world downturn in demand, especially with projected growth in its China distribution. Operating expenses ratios should return to more normal after the higher spending for the China Olympics. Still the world leader with a tremendous brand value.

Your say
While CAPS members may stand with Jim Cramer or on opposite sides of the field, the investor intelligence community is more than what some All-Stars think, even if they are TV personalities. But what do you think? Is Cramer right, or off his rocker? Why not head off right now to CAPS and sound off with your thoughts on Nike?

Motley Fool CAPS is a great place to start your own research on these stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Best of all, it's free!

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VF and RPM International are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.

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Hewlett-Packard Company

CAPS Rating 4/5 Stars

$37.84

-1.47 (-3.74%)

Outperform2520

Underperform185

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