Amid a string of cloud IPOs this week, Jim Cramer thinks three of them warrant close attention.
Now, make no mistake, the "Mad Money" host is not an advocate of most cloud IPOs. "I think a great deal of them are dangerous," Cramer said.
However, after doing considerable research, he thinks three specific stocks that are about to come to market have bullish tailwinds. They follow:
is expected to price Wed., March 19, and trade under the symbol PCTY. "The company provides cloud-based payroll and human capital management software for small and medium sized businesses," Cramer explained.
Looking at the way in which the stock could price, Cramer doesn't think the potential is fully valued.
is expected to price between $14 and $16 on Wednesday. At the mid-point of that range, the stock would be trading at six times sales, which is a discount to the group's average of seven times sales, and much cheaper than, say, a stock like Cornerstone selling for 10.5 times sales. So, if you can get a piece of the Paylocity IPO, I say give it a shot."
is expected to price on Fri., March 21, and trade under the symbol THNX.
Cramer says is a play on social networking, however, unlike other big social network companies, Globoforce is largely focused on helping companies operate more efficiently and retain their best employees.
"One of the things that Globoforce's software does is identify employees who are doing well and then rewards them for their performance," Cramer said.
The "Mad Money" host believes the future opportunity is considerable.
"Globoforce is growing revenues at an 18% clip, it has lots of blue chip customers with 1.9 million individual users across 40 countries, and its taking share in the North American recognition market, a business that's expected to be worth $32 billion in 2016," he said.
"The stock is expected to price between $16 and $18, and at those levels, I think it's worth trying to get a piece of this one."
is expected to price on Thurs., March 20, and trade under the symbol QTWO.
"This is a company that provides banks with a software as a service platform that handles all of the online banking needs of their commercial and consumer account holders," Cramer said.
Cramer believes our nation's banks are about to experience a renaissance as the economy recovers and interest rates rise.
He sees Q2 Holdings as a play on the theme.
"Now, Q2 is not yet profitable, but it still has some terrific numbers—last year, it grew billings at a 47% clip, and the company expects 30% revenue growth going forward. I think the online and mobile banking business is a tremendous opportunity, and Q2 has only just started to scratch the surface. If you can buy somewhere between $11 and $13, this is an IPO that I would jump all over."
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Of course there are other IPOs expected this week.
"There's A10 Networks, which helps companies that use proprietary architecture improve the performance of their data center applications and networks. There's also Amber Road, a cloud based software provider that automates import and export processes to simplify supply chain management. And there's Borderfree, which provides a comprehensive web platform that allows American online retailers to reach international customers," Cramer said.
Although he thinks all these companies belong on your radar, he doesn't want you to buy them on the IPO. "Stick with Paylocity, GloboForce, and Q2," he said. "As for the others take a pass."
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