Cramer's Mad Money - A Tale Of 2 Recent IPOs (1/9/14)

Includes: AA, RPM, TCS, ZU
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday, January 9.

A Tale of Two Recent IPOs: The Container Store (NYSE:TCS), Zulily (NASDAQ:ZU)

Cramer analyzed which of these two recent IPOs are worth buying based on various metrics:

1. Multi-year growth: Both companies show strong expansion plans.

2. Addressable Market: Zulily has an edge over TCS in this metric.

3. TCS has to face competition, but Zulily is immune from peers trumping it.

4. Use of Cash: Both companies are investing in growing their businesses.

5. International Exposure: Container store is a regional to national growth story, but Zulily has business overseas.

6. Balance Sheet: ZU's balance sheet is picture perfect, but Container has to clean a few things up.

7. Valuation: Both companies have similar valuations.

8. Management: Both companies have stellar management that can execute.

9. Macro Issues: Container Store is far more vulnerable than ZU.

10. Margin Expansion: Both companies are showing margin expansion.

Cramer thinks both companies have their strengths, but ZU is the better stock. The Container Store is in the penalty box for missing its first earnings.

CEO Interview: Klaus Kleinfeld, Alcoa (NYSE:AA)

Alcoa (AA) went from an underperforming stock to one that rose 28% in 3 months. The company posted an earnings miss, but revenues were higher than expected. Concerning the balance sheet, CEO Klaus Kleinfeld said, "We can clear the road going forward." The company is seeing plenty of demand in aerospace and from emerging markets. Commercial building is going strong, and Kleinfeld talks of "green shoots" emerging in industrial construction. Concerning China, Kleinfeld spoke about slowing growth, but thinks this will not be a long-term situation.

CEO Interview: Frank Sullivan, RPM International (NYSE:RPM)

RPM International (RPM) produces paints, coatings and other construction materials. A full 30% of its business depends on commercial housing. The company reported a 3 cent earnings beat with stronger margins. RPM is committed to a consistent dividend raise as well as on product innovation. CEO Frank Sullivan noted an increase in the amount Americans are spending on their homes, which is beneficial for RPM.


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