Throughout the year, CNBC’s Jim Cramer has characterized the latest class of initial public offerings as a thorn in the stock market.
In recent months, he suggested the 2019 IPO cohort flood was a bigger threat to the market than the U.S.-China trade war, berated underwriters for the number of equities that stumbled out of the gate and warned that valuations would fall dramatically.
On Thursday, the “Mad Money” host said he has turned positive on a handful of these stocks. He endorsed them for declining to more enticing prices…
“This year’s IPO market has been a real roller coaster, but now that the dust has settled and many of these newly minted stocks have come down, I’ve got to tell you: I like Levi’s,” he said, “Kontoor, Lyft and Revolve right here, right now.”
Levi Strauss & Co
After going private for more than three decades, iconic jeans brand Levi’s in May relisted on public markets. The stock IPO’d for $17 in March and peaked at about $24 a share in April. Cramer initially recommended it as a buy at about $18 a share in late July, but the stock dropped to almost $16 in mid-August.
Levi shares have since bounced 21% from its bottom, closing Thursday at $19.52.
“At this point, I think Levi’s is still worth buying,” Cramer said. “I think the forecasts for 2020 and 2021 could prove to be low, which means Levi’s likely has more upside going forward.”
In May, VF Corp, which has a portfolio of apparel and footwear brands, spun off its denim division Kontoor Brands. The company, the parent of Lee, Wrangler and Rock & Republic jeans, opened on the market just under $40 a piece, slid to nearly $26 in June and did not close above $40 again until late October.
Cramer recommended it in late July at about $29 for its dividend, which currently yields about 5.6%. The stock has grown about 37% in value since then, closing Thursday at $40.22.
“Obviously Kontoor’s much less of a slam dunk after this move, but the dividend remains attractive and it is still fairly cheap,” he said. “It only sells for 10.6 times this year’s earnings. I say stick with it, but remember: apparel seems” to swing on U.S.-China trade and retail news…
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