Stock Smackdown: 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. 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 125,000 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 offered the best opportunities for investors, whereas 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
With some $12 billion in long-term debt and only $2 billion in cash, there seems to be some sound reasoning behind the Mad Money star saying that Chesapeake Energy is constrained by its balance sheet and thus not a favorite of his right now. Instead, he sees a better option in one of its rivals:

This is not my favorite. This is a balance sheet-strapped company. I like Anadarko Petroleum.

CAPS says
With more than 97% of the CAPS members who rated Chesapeake Energy tagging it to outperform the market, it's easy to see that investors there don't agree with Cramer's assessment. Perhaps they are considering that the natural gas play has no payments coming due on that debt in the next five years, it expects to have as much as $2.5 billion in cash by year's end, and it intends to have as much as $4 billion in the bank by the end of 2009.

CAPS member goldseth admits that on the surface, Chesapeake has made some bonehead moves in recent months, but with an ability to virtually create cash flow at will and long-term pressure for natural gas prices to rise, says the sell-off in the stock has been excessive. Here's an excerpt:

However, this sell-off is an over-reaction (hedge fund redemption may be a key here) which creates great opportunity for those willing to take the dive! First of all, consider natural gas prices. Short term, the natural gas phenomenon created an industry of drill, drill, drill and resulting oversupply coinciding with an economic slowdown, industrial demand destruction in particular, has destroyed prices. However, the credit crunch, slowing economy and low prices should weed out many small players and unconventional rigs, bringing more balance to supply.

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 over to CAPS right now and sound off with your thoughts on Chesapeake Energy, 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!

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.