Market Combat: Cramer vs. CAPS

There's no denying that "Mad Money" host Jim Cramer is entertaining, popular, and passionate. On many occasions, he's even right. For example, in August 2007, in an ardent, emotional rant forever memorialized on YouTube, he said that the Fed was asleep and the market was facing "Armageddon." The subsequent meltdown has proven him more than correct.

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:

Cramer says ...
Calling it a "flash in the pan," Jim Cramer dislikes GPS maker Garmin. He chastises those who didn't listen to the sell recommendation he's had on the stock all year long. Some Fools might agree, pointing to at least three reasons you might want to sell the stock: intense competition from cell-phone operators, shrinking margins, and plummeting unit prices.

Cramer points out that Garmin will say it has a number of great products as the Christmas selling season approaches, a move he admits may cause shares to run up into the low $30s. Yet as Fool Dave Mock notes, 85 million smartphones are expected to be sold next year with navigation software built in. Meanwhile, Garmin's own answer to that threat -- the Nuvifone -- has been delayed. It may have overcome threats before, but are these challenges more entrenched?

CAPS says ...
Our investor intelligence community still heavily favors the Motley Fool Stock Advisor recommendation, with nearly 94% of those who've rated the stock believing it will outperform the market. Even 91% of the All-Stars have high hopes for it, and with good reason. Garmin is the recognized industry leader, hosting a brand name virtually synonymous with GPS navigation. Sales last year across all divisions remained strong, and while there are competitors offering navigation devices in cell phones, they're not as sophisticated as a stand-alone unit.

CAPS member afalk42 agrees, noting that Garmin is a "no brainer" in the serious GPS business:

It is interesting to see all these comments about phones now having GPS chips and how that is going to hurt Garmin. Guess what: I have an iPhone 3G with a GPS chip, and when I'm walking through town I get the cutsie Google Map application and can find the next Starbucks. While that is great, it has absolutely nothing to do with serious GPS applications, such as the devices produced by Garmin. Both for automobile navigation, marine navigation, and recreational navigation (think mountain-climbing, hiking, etc) you need so much more than what your GPS-enabled phone provides.

As even Cramer points out, there's a good chance Garmin's shares will rise. It trades at only 6.5 times next year's earnings and sports low multiples in relation to its growth prospects and sales. In short, Garmin looks cheap.

Your say
While CAPS members stand on the opposite side of the field from Jim Cramer, the investor intelligence community draws on more than the opinions of a handful of All-Stars, even if they are TV personalities. What do you think? Is Cramer right, or off his rocker? Why not head off right now to CAPS and share your thoughts on Garmin.

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!