Cramer's Mad Money - What The 8 Best IPOs Of 2012 Have In Common (1/28/13)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday January 28.

The 8 Best IPOs of 2012: Vipshop (NYSE:VIPS), Proto Labs (NYSE:PRLB), HomeStreet (NASDAQ:HMST), Guidewire (NYSE:GWRE), Intercept Pharma (NASDAQ:ICPT), Nationstar Mortgage (NYSE:NSM), Eloqua (NASDAQ:ELOQ), WageWorks (NYSE:WAGE)

2012 was a strong year for IPOs, with the average rising 20%. Cramer thinks 2013 will also be a great year, and he outlined the best IPOs of 2012:

1.Vipshop Holdings (VIPS), fast growing speculative Chinese company, saw a 174% gain.

2. Proto Labs (PRLB) rose 81% the first day and has gained a further 146%.

3. HomeStreet (HMST) is a regional bank in the mortgage business and rose 9% the first day and 132% in the aftermarket.

4. Guidewire Software (GWRE) provides software to insurance companies. It spiked 31% on its IPO and has gained a total of 129%.

5. Intercept Pharmaceuticals (ICPT) is an orphan drug stock with a treatment for chronic liver disease. It rose 29% the first day and has increased 128%.

6. Nationstar Mortgage (NSM) has been taking share in the mortgage servicing space. It rose only 1.4% the first day, but has risen 121%.

7. Eloqua (ELOQ) is a software-as-a-service company that popped 12% on its IPO and rose 105%.

8. WageWorks (WAGE) spiked 40% the first day and gained a total of 98%.

Cramer thinks one word represents what all of these IPOs have in common: growth.

VMware (NYSE:VMW), Hess (NYSE:HES), Caterpillar (NYSE:CAT), Honeywell (NYSE:HON), Transocean (NYSE:RIG)

Cramer wouldn't worry about the recent run-up in stocks in general, because he feels the market was waiting for a rally, and many stocks are still undervalued anyway. VMware (VMW) reported a disappointing quarter, many cloud stocks are down, and this movement might cause some to question the health of tech. However, there was good news from Hess (HES), which is going to break itself up, and rose 6% on the news. Carl Icahn bought a huge stake in Transocean (RIG). While Caterpillar's (CAT) numbers were weaker than expected, the stock did not get hammered. Perhaps one reason Caterpillar didn't sell off dramatically was that Honeywell (HON) gave strong earnings on Friday and said that China was growing by 10%. What is good for Honeywell just might be good for Caterpillar.

CEO Interview: Dr. Phillip Frost, Opko Health (NYSEMKT:OPK)

Opko Health (OPK) is headed by Dr. Phillip Frost, who has had great success with founding and selling pharma companies, two of which he sold at rich premiums; one had gained 6,000%. Opko has risen 55% in less than three months and is a huge player in diagnostic testing. It is developing a drug to reduce nausea in chemotherapy patients and has developed a Vitamin D treatment for those with renal disease. OPK has made successful acquisitions, including Claros Diagnostics. Cramer thinks Dr. Frost and Opko have a great track record of success.

Mad Mail: Monmouth Real Estate (NYSE:MNR), Healthcare Trust (NYSE:HTA), Devon (NYSE:DVN), Chesapeake Energy (NYSE:CHK), eBay (NASDAQ:EBAY), Sirius XM Radio (NASDAQ:SIRI), Deckers (NASDAQ:DECK), Federal-Mogul (NASDAQ:FDML). Other stock mentioned: FedEx (NYSE:FDX)

Cramer answered questions viewers Tweeted him:

Monmouth Real Estate (MNR) is a REIT with a good list of mainly industrial clients, but the problem is that 40% of its property is rented by FedEx (FDX). Cramer thinks FDX is stable, but he doesn't like that fact that one client dominates the business so heavily. He prefers Healthcare Trust (HTA) with a dividend of 5.5%.

Federal-Mogul (FDML) is an auto parts maker that has fallen 49% off its high the last few months, but since it popped 15% just last Thursday, Cramer would wait for a decline before buying.

Devon (DVN) and Chesapeake Energy (CHK) are both too levered to natural gas. Cramer would not buy.

eBay (EBAY) doesn't need to pay a dividend; it is doing the right thing by investing in the business.

Sirius XM (SIRI) has tremendous growth potential with the auto buildout.

Deckers (DECK) might bounce back, even though the Uggs brand might be shot. Cramer would not give up on DECK at this level.


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