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Jim Cramer: Costco (COST) Numbers, Apple's (AAPL) Deutsche News and J.P. Morgan's (JPM) Jamie Dimon's Annual Letter

Stocks in this article: COST AAPL JPM

NEW YORK (TheStreet) -- TheStreet's Jim Cramer calls Costco's  (COST) comparable-store sales numbers "the best in the game" and thinks the stock should be in the $116 to $117 range.

Cramer also thinks Deutsche Bank's "buy" recommendation of Apple  (AAPL) is well-reasoned. The firm based some of its recommendation on reports of larger screens for the upcoming iPhone 6 but also noted the momentum of the stock. Deutsche set a $650 price target, but Cramer says investors are "yawning" at this and he does not understand why.

Finally, Cramer suggests reading J.P. Morgan  (JPM) CEO Jamie Dimon's annual letter to shareholders in which he lays out what Cramer has been calling "the new frugality." This means that people are not taking down debt and are not taking a lot of risks. Dimon outlines why that is and suggests that people are too pessimistic about the markets. But after reading the whole letter, Cramer sees reason to be pessimistic.

Must Watch: Jim Cramer on Costco Sales, Apple Upgrade and Jamie Dimon's Letter

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

---------- Separately, TheStreet Ratings team rates COSTCO WHOLESALE CORP as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate COSTCO WHOLESALE CORP (COST) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 68.55% to $713.00 million when compared to the same quarter last year. In addition, COSTCO WHOLESALE CORP has also vastly surpassed the industry average cash flow growth rate of -7.47%.
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that COST's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • COSTCO WHOLESALE CORP's earnings per share declined by 15.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COSTCO WHOLESALE CORP increased its bottom line by earning $4.63 versus $3.90 in the prior year. For the next year, the market is expecting a contraction of 0.4% in earnings ($4.61 versus $4.63).
  • You can view the full analysis from the report here: COST Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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