This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Jim Cramer: Another Fine Secondary Awaits

Stocks in this article: YELPWDCAMZNCRZO

NEW YORK ( Real Money) -- You can judge a great market by its secondary offerings and the reactions to them. Take two deals from last week: Yelp (YELP) and Western Digital (WDC), each of which sold shares at $67 apiece.

I am a huge fan of Yelp. Of all the recent underwritings, Yelp may have the most powerful mobile offering -- one that is rapidly becoming the preferred way to access the site, since you can now write reviews while on the go. Yelp is expanding quickly worldwide in order to box out others who might have the idea of going in against it, and this is something I love, because it reminds me of Amazon (AMZN) during the old days. Yelp is rapidly building out its international presence and, like any great regional-to-national-to-international story, it is getting terrific traction.

I love a model like that of Yelp, which is built on user content. Yelpers write reviews on companies that need reviewing and want traffic place advertising, so all of this creates a virtuous circle. I know from my co-ownership of the DeBary Inn, located down the block from me, that Yelp reviews can make or break a service business. Yes, it is that powerful a force.

Yelp is indeed a global, online yellow pages. The opportunity is so great for this company that I actually told you the company would most likely do a secondary in order to raise some money -- and I said not buy the stock until it does, but to pounce when you see it. Of course, last week Yelp reported spectacular 68% revenue growth, as well as $8.1 million in adjusted earnings before interest, taxes, depreciation and amortization -- a 270% rise from the prior year. So when it also filed an offering, people ran from the stock.

But that's where the opportunity came in, and the $67 pricing made for a terrific buy, one that I think will stand up over time.

Turning to Western Digital, a year ago the company bought Hitachi Global Storage Technologies from Hitachi with 25 million Western Digital shares. The stock has appreciated 80% since then -- in part because of the Hitachi division, as well as a buy of Stec for $340 million in cash -- as the company endeavors to expand beyond just the traditional hard drive business.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs