Cramer: These IPOs May Be Worth Getting in on
The IPO market is red hot again, "Mad Money" host Jim Cramer said Tuesday, but there are two, in particular, that he has on his radar.
Both ChannelAdvisor and Ply Gem are expected to price Wednesday night, and start trading Thursday morning.
"If you like what I have to say about these companies, and you like what you see when you do your homework, there's still some time left for you to pick up the phone, call your broker [Wednesday] morning and ask to get in on 100 shares of these deals," Cramer said.
ChannelAdvisor: This cloud-based enterprise play will trade under the symbol ECOM. Its software enables clients to sell their merchandise across multiple channels, including Amazon and eBay, as well as search engines. It has nearly 2,000 customers and sells its software to 27 percent of the 500 largest Internet retailers in the U.S.
"E-commerce is a rapidly growing area, but the market for this kind of software is highly fragmented, believe it or not, which gives ChannelAdvisor a lot of room to expand," Cramer said.
The company is investing heavily in order to grow the business. While could mean it may operate at a loss for some time, Cramer isn't worried. He thinks ChannelAdvisor's strategy is working.
The company plans to sell 5.8 million shares in the $12 to $14 price range in the IPO. Cramer would be willing to pay up to $16.00 or "maybe even $17," in the aftermarket.
Ply Gem: This housing play makes exteriors for the homebuilding and home repair markets, and will trade under the symbol PGEM. It is the market leader in vinyl siding, and 50 percent of its sales come from new construction.
"We know that the housing market is on fire right now—the expectation is that we'll build a million new homes in this country for 2013, and it will be much higher in 2014," Cramer said.
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Ply Gem plans to sell 14.8 million shares at a price range of $18 to $20. In the midpoint of the range, the stock would be trading at a premium to the building products group. However, because it is a housing start play, it will likely grow faster than its peers for the next 2-3 years, Cramer said. That's why he can justify paying a premium price. If you can't get in on the IPO or get the stock for $22 or less in the aftermarket, move on.
Cramer's bottom line—"I think it's worth trying to get in on the upcoming ChannelAdvisor and Ply Gem deals, but remember, these IPOs will likely price [Wednesday] night, so if you want in, you'd better do your homework fast and call your broker [Wednesday] morning."
-When this story was published, Cramer's charitable trust owned eBay.
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