Jim Cramer has given his verdict on the top IPOs of the year including Alibaba Group Holding Ltd (NYSE:BABA), GoPro Inc (NASDAQ:GPRO), and Mobileye NV (NYSE:MBLY). Despite of its impressive takeoff, Alibaba Group Holding couldn’t impress Cramer enough and stood at number three in terms of profitability for investors.
For Alibaba Group Holding Ltd (NYSE:BABA), Cramer thinks that despite of the spiking share prices, Alibaba is still cheap enough to invest. He said,
“My third favorite newly minted public company that’s worth buying at these levels is Alibaba. It’s trading at 36 times next year’s earnings estimates, a slightly lower multiple than Facebook, however, it’s growing faster than Facebook and is incredibly profitable.”
Further, Cramer was impressed with the founder, Jack Ma, and gave a Buy rating to the investors until the stock reaches his $82 target price.
In Cramer’s words, GoPro Inc (NASDAQ:GPRO) is a company that has created a completely new niche of consumer products. Cramer Said,
“They make mounted cameras that you can use to capture footage on everything from a mountain bike to surfboard.”
Cramer was hopeful that the product is likely to gain popularity among masses in a short time, although Cramer consider GoPro Inc (NASDAQ:GPRO) a bit too expensive at the current 50 times earnings estimate irrespective of its impressive growth rate. He added,
“I’d take a pass on the stock up here. However, I think GoPro’s holiday selling season, which will include new hardware, is going to make the stock a buy on any dip.”
Mobileye NV (NYSE:MBLY) is the top IPO choice of Cramer because of its advanced software product which is unlikely to have rivals in the next few years. Cramer added,
“By 2022, half of new cars, globally, should have some form of autonomous or advanced driver assistance system, up from just 2 percent today. And because of its proprietary software, Mobileye has 80 percent market share in this business.”
Cramer called the recent price dip as the perfect buying opportunity for investors.
This article has been written by Prakash Pandey and edited by Serkan Unal.