Stock recommendations are a little like children. They should be watched closely until they mature and can stand on their own.
Last week I put together a short list of stocks in the S&P 500 that I found technically attractive. Only five names made the cut: Flowserve (FLS) - Get Report , FMC(FMC) - Get Report , Franklin Resources(BEN) - Get Report , NRG Energy(NRG) - Get Report and Helmerich & Payne(HP) - Get Report .
TheStreet's founder Jim Cramer took a look at the same stocks, and it turns out he is bullish on four of the five. Here are our takes on each of the stocks -- including my technical analysis and excerpts from Cramer's fundamental perspective.
Kamich: In this daily chart of Flowserve (FLS) - Get Report , we can see that prices continue to hold above the flat 50-day simple moving average line. The 200-day moving average line continues to flatten and should eventually turn up. The on-balance-volume, or OBV, line is steady. The 12-day momentum study in the bottom panel of this chart has not turned up yet, but a couple of up days should do the trick.
Cramer: On the surface, this pedestrian industrial seems like a total loser, because it guiding for pretty much down everything.
However, when you dig deeper you get another view: things are stabilizing, not getting worse, while the company is closing or selling or downsizing 13 plants and reducing its global workforce by 15-20%. At the same time, cash flow from operations is improving and March bookings, the end of the quarter, were getting better and better.
Kamich: This daily chart of FMC (FMC) - Get Report confirms my enthusiasm for the stock. FMC has moved up nicely after touching the $45 level. The OBV line has made a new high for the move up, confirming the price strength. The 50-day moving average line continues higher, and the longer 200-day average line is flattening. A close or probably just a trade above $49 is likely to generate a breakout and additional strength.
Cramer: Kamich anointed FMC, and when I read about this one it stunned me how compelling it is. That's because FMC is a company transformed; it's gotten out of its prosaic chemical business, alkali, and moved up the food chain to become the eighth largest crop protection company. The alkali sales pretty much paid for the Cheminova purchase that made FMC a new power in the Ag business.
Kamich: The latest daily of Franklin Resources (BEN) - Get Report shows prices continuing to hold the right shoulder of a possible head and shoulders bottom pattern. The popular moving averages are still above the market -- no change there -- but momentum has improved and could turn positive soon. A close above $37 would be a short-term signal that prices are moving in the right direction.
Cramer: Franklin Resources is an odd duck. The money manager's been losing assets under management like mad. So why has the chart turned up? Because the business has.
BEN's improvement has to do with its emerging markets portfolios. After being in the doghouse for ages, these caught fire and that got the stock moving. I found myself thinking that this company, with about half its market capitalization in cash and a monster buyback, could be the type of financial that someone who believes in the emerging markets can get behind. I would prefer the stock of MSCI, but that's a much more muted tracker of the fortunes of these markets that have hurt so many over so many years.
Kamich: In this chart of NRG Energy(NRG) - Get Report , we can see a golden cross of the 50-day moving average line trading above the slower 200-day line. Moving average crossover signals are late by definition but welcomed never the less. The OBV line continues to rise. Momentum is slowing but one strong up day will probably change that around.
Cramer: [Former CEO David Crane] had levered up the balance sheet with his alternative energy schemes. Now they are being dismantled and assets being sold and the balance sheet being fixed by current management. It's become a plain oil utility again, with a decent fleet of assets. The company's got a pathetic $0.03 cash dividend -- Crane had positioned it as a growth utility -- so there's no point in owning it for that. However, it's easy to imagine that the dividend could be in shape to be increased, as management undoes the world of Crane.
I think it can work its way higher as it does.
Helmerich & Payne
Kamich: The picture of Helmerich & Payne(HP) - Get Report is still good, we just need our indicators to strengthen some more. Prices are over the 200-day moving average line but still below the 50-day. The OBV line is flat while momentum is improving. A close above $61 should make the bulls smile.
Cramer: As for Helmerich & Payne, I can't pull the trigger. While it has always been a terrific company, it is, in the end, and oil drilling enterprise and that's a non-starter in a world where lower oil prices could be with us for some time.