Jim Cramer -- Buy Twilio on a Pullback
Shares of red-hot Twilio (TWLO) - Get Report are down 2% Monday on a number of analyst ratings.
The analysts have spoken and most of them are neutral on the stock, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment Monday.
The analysts are bearish or turned off by the cloud communications company's prospects. Instead, the muted ratings are in response to the stock's incredible run, Cramer said. Its initial public offering was priced at $15 per share, it began trading on June 23 and since then shares are up a whopping 180%.
When the stock pulls back, the analysts will likely move from being neutral on the stock to being buyers, Cramer said. That's when investors should start buying.
"This was the bargain," he said of the IPO. Because the IPO market had been so quiet in 2016, the underwriters knew they needed a big success, one that would entice investors. That's one reason why Twilio was priced so low, allowing for such a big gain in a short period of time.
It helps that Twilio is able to "participate in the upside" of a lot of great companies, as companies including Uber and Airbnb are among its clients, Cramer concluded.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.