Why Jim Cramer Likes General Electric (GE) But Not Twitter (TWTR) and eBay (EBAY)

NEW YORK (TheStreet) -- TheStreet's Jim Cramer finds that Twitter  (TWTR) had a strong quarter seasonally, which is not good because the quarter was not that strong overall, and needs events such as the Oscars and the Super Bowl to thrive.

This disturbs him because the social media company pointed out that it does not have many such events coming in the second quarter, which could be weak. Cramer says the lackluster first quarter means the stock must go lower, possibly to $30, and notes the conference call was not good.

eBay  (EBAY) is facing increased competition and the domestic volume core business was quite poor. Price cuts are also at play, particularly for StubHub. As a result, Cramer thinks the stock probably drops to $48 or $49.

Must Watch: Jim Cramer Likes General Electric, Avoids Twitter and eBay

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Finally, Cramer is pleased that General Electric  (GE) is transitioning to more of an industrial company than a finance company. He calls the acquisition of clean energy company Alstom "perfect." The U.S. Supreme Court said Tuesday it wants to make it so that there are no more coal plants, which Cramer says is good for Alstom.

Furthermore, Cramer thinks GE CEO Jeffrey Immelt will be a hero because of this deal and tells investors not to worry about the fact that he cannot fire a lot of people because this is a worldwide company with only some of it in France.

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

"We rate GENERAL ELECTRIC CO (GE) 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, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:
  • GE's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 1.8%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • GENERAL ELECTRIC CO's earnings per share declined by 17.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL ELECTRIC CO increased its bottom line by earning $1.47 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.47).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Industrial Conglomerates industry. The net income has decreased by 15.0% when compared to the same quarter one year ago, dropping from $3,527.00 million to $2,999.00 million.
  • You can view the full analysis from the report here: GE Ratings Report

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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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