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Stock Smackdown: Cramer vs. CAPS

By Rich Duprey - Updated Apr 5, 2017 at 7:59PM

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A showdown over who knows stocks better.

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 opinions of more than 120,000 members to assign ratings to 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.

Stock

Lightning Round Show Date

Cramer's Rating 

CAPS Rating

Boeing

Monday

Bearish

***

Motorola (NYSE:MOT)

Monday

Bearish

**

Citigroup

Tuesday

Bullish

**

Frontline (NYSE:FRO)

Wednesday

Bullish

****

IBM (NYSE:IBM)

Wednesday

Bullish

****

General Dynamics (NYSE:GD)

Wednesday

Bearish

****

Macy's (NYSE:M)

Thursday

Bullish

****

Ashland

Thursday

Bullish

***

Advanced Micro Devices (NYSE:AMD)

Friday

Bullish

**

Las Vegas Sands (NYSE:LVS)

Friday

Bearish

**

Cramer says ...
Although the company has a lot of cash, Cramer thinks cell-phone maker Motorola isn't a place you'd want to put your own cash, because of the impact that will reverberate from the results of others, like chip maker Texas Instruments. If you want exposure to the handset market, he feels Qualcomm would be a better place to be:

You know, I keep thinking, boy, they've got a lot of cash ... somebody's got to be able to do something with it... but then again, tonight, Texas Instruments (TXN) has really bad numbers and that directly impacts [Motorola] ... Let's do this ... let's stay just away from [Motorola]. Don't buy, don't buy ... I don't feel confident enough that there's anything really good happening at Motorola ... If you want cell phone technology, I'm going to send you to Cramer fave, QualComm Inc. (QCOM), which finally got a lift today.

CAPS says ...
While more than 80% of the members rating Motorola on CAPS think it will outperform the market, it has only garnered a lowly two-star rating on the service – meaning that, overall, investors there probably agree with Cramer's assessment. Yet CAPS member inastrangeland likes the company precisely because of its cash:

This is an easy one, with over $7B in cash, a business that without handsets is earning 10% pre-tax profit on $15B in revenue would be worth well over $4 right now, not just in the future. This stock is getting hammered because the analysts treat [Motorola] like a one trick pony and don't give any value to the other businesses that make up over 2/3s of the revenue and are very profitable. So called "analysts" don't do their homework but just say stuff because they don't like the company or have the herd mentalitiy and think it's safe to just pile on with the rest of the herd.

Remember the slamming that the automaker CEOs got for flying to Washington on their corporate jets? Cramer sees that reflecting negatively on plane maker General Dynamics. But CAPS All-Star BSHumphreyII thinks the combat vehicle side of the business makes the defense contractor an attractive investment:

A solid, consistently growing company at a dirt cheap 9 times earnings. Yeah, Obama made noises about cutting defense spending, but does anyone really think he'll get the chance? With the Russians playing hardball and talking about a big-time naval buildup, the political pressure to modernize the Air Force and Navy will be big.

Rather than hurting demand for [General Dynamic's] products, I'm betting the end of the war in Iraq will actually free up money for development of big-ticket items.

You 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. What do you think? Is Cramer right or off his rocker? Head off right now to CAPS and sound off with your thoughts on Motorola, General Dynamics, or any other stock.

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!

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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Stocks Mentioned

General Dynamics Corporation Stock Quote
General Dynamics Corporation
GD
$231.82 (0.59%) $1.36
Motorola Solutions, Inc. Stock Quote
Motorola Solutions, Inc.
MSI
$252.28 (-0.28%) $0.72
Macy's, Inc. Stock Quote
Macy's, Inc.
M
$19.53 (6.72%) $1.23
International Business Machines Corporation Stock Quote
International Business Machines Corporation
IBM
$132.54 (0.79%) $1.04
Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$98.12 (-0.94%) $0.93
Frontline Ltd. Stock Quote
Frontline Ltd.
FRO
$11.45 (4.76%) $0.52
Las Vegas Sands Stock Quote
Las Vegas Sands
LVS
$37.69 (2.84%) $1.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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