Jim Cramer: Why Yahoo Could Trade Into the Mid-40s and Bank of America is a Buy Under $15

NEW YORK (TheStreet) -- TheStreet's Jim Cramer describes the Yahoo! (YHOO) and Bank of America  (BAC) earnings as "one good, one bad," respectively.

He says the Yahoo! earnings were "terrific" not just because of Alibaba, but because the business has stabilized away from Alibaba given the fact that Yahoo! will be able to buy back billions of dollars worth of stock. Cramer thinks Yahoo! could trade into the mid-$40 range.

Cramer says Bank of America's net interest income was "not so hot" and believes the quarter was not stellar, but not bad, either. If the stock was up 44 cents yesterday, then it will give those gains back today. Cramer would buy the stock at less than $15, where he believes it would stabilize because it would be too cheap.

Must Watch: Jim Cramer on Yahoo! and Bank of America Earnings

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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Separately, TheStreet Ratings team rates BANK OF AMERICA CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by several positive factors, 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, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 11.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BANK OF AMERICA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BANK OF AMERICA CORP increased its bottom line by earning $0.91 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.91).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 369.8% when compared to the same quarter one year prior, rising from $732.00 million to $3,439.00 million.
  • The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 86.64%. It has increased significantly from the same period last year. Along with this, the net profit margin of 14.08% is above that of the industry average.
  • Net operating cash flow has significantly increased by 146.29% to $11,994.00 million when compared to the same quarter last year. Despite an increase in cash flow of 146.29%, BANK OF AMERICA CORP is still growing at a significantly lower rate than the industry average of 385.82%.
  • You can view the full analysis from the report here: BAC 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.

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

"We rate YAHOO INC (YHOO) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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

  • Powered by its strong earnings growth of 43.47% and other important driving factors, this stock has surged by 38.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, YHOO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Although YHOO's debt-to-equity ratio of 0.08 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.30, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for YAHOO INC is currently very high, coming in at 83.75%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.50% is above that of the industry average.
  • Net operating cash flow has significantly increased by 118.30% to $347.73 million when compared to the same quarter last year. In addition, YAHOO INC has also vastly surpassed the industry average cash flow growth rate of 11.64%.
  • You can view the full analysis from the report here: YHOO 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.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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