Whil nine companies are coming public over the next few days, not all of them are worth buying.
In fact, Cramer on Monday said he likes only four: Campus Crest Communities, China Ming Yang Wind Power, Amyris and Elster, a long-term investment and three trades, respectively.
Campus Crest, an alternative student housing REIT, fills a much-needed gap, as university dormitories are already packed to their capacity. And these schools can’t do much to offer more space for students given the budget shortfalls both they and states right now face.
When valuing this stock, Cramer looked at both the share price itself and the dividend. Campus Crest, which will trade under symbol CCG, is expected to price at a range of between $12.50 and $14.50. Cramer thinks the stock could eventually reach $19, though, given the strength of this long-term student-housing theme. That means that if CCG earns the same valuation as its peers, it would shoot up 41% from the midpoint of that range. The 64-cents-a-share dividend, meanwhile, would yield 4.7% at that midpoint.
Now, Cramer doesn’t think CCG will pop when it starts trading on the open market—infact, he thinks it might not move much at all on the first day—but he’s still bullish on the stock “as it’s set up for major long-term gains.”
China Ming Yang Wind Power, soon to trade under symbol MY, will offer investors a pure play on this renewable energy source, and Cramer said everybody seems to want one. The largest private wind-turbine maker in China, and fifth-largest overall, is part of that country’s overall dominance in this market, as its market share has jumped to 79% now from 13% five years ago.
The stock is expected to price at between $14 and $16, though Cramer thinks it deserves a 20% premium to where a similar stock, Vestas, was two years ago. Under that assumption, MY could hit $18 on its first day of trading, which is entirely possible given the popularity of other recent Chinese IPOs. The strategy here? If you can get in on the IPO, do so. Then cash out as soon as you get your price.
Third on Cramer’s list is Amyris, trading under symbol AMRS. This industrial enzyme maker produces molecules used to breakdown biomass like sugar and turn it into renewable fuels like ethanol. As promising as this technology sounds, Cramer was emphatic about this stock being a trade and only a trade. He thinks AMRS jump to $24 from its expected pricing range of $18 to $20, but recommends taking a pass if your broker can’t get you shares of the deal itself.
Lastly, there’s Elster, a market leader in gas, electric and water meters for utilities. Cramer likes the smart-grid exposure of this company, which will trade under symbol ELT, but it’s being sold by a private-equity company. And 36% of the shares being offered are from shareholders who are cashing out. Cramer thinks ELT could reach $12, up at least $5 from its expected $16 to $18 range, but he urged caution.
“The metering sector has been tough,” Cramer said.
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