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Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways for today's trading.
Nutanix(NTNX) - Get Report : In his "Know Your IPO" segment, Cramer followed up on the stock of cloud-services provider Nutanix, which at its debut last week was the hottest initial public offering of 2016.
After soaring over 131% during its first day of trading, shares of Nutanix fell out of favor quickly, falling to just over $30 a share today. Cramer said there's lots to love about the company, including accelerating 88% revenue growth last quarter and a long list of impressive customers across varied industries.
But what's not to love about Nutanix is how the company came public, with a sliver deal of just 14.8 million shares, purposely designed to inflate demand at the IPO while another 122 million shares wait in reserve. Shortly after the company's lock-up period expires on March 29, Cramer said, Nutanix will offer more shares in a secondary offering, one that will clobber existing shareholders.
We've seen this pattern many times before, Cramer said, including recently with Twilio( WLO) , which fell over 25% in just a week after its secondary, and with Acacia Communications(ACIA) - Get Report , which just doubled its share count in a single offering.
Until Nutanix has its secondary, Cramer said the stock won't be able to find a solid footing, which is why investors need to steer clear until then.
Nvidia(NVDA) - Get Report , Advanced Micro Devices(AMD) - Get Report , Activision Blizzard(ATVI) - Get Report , Electronic Arts(EA) - Get Report and Take-Two Interactive(TTWO) - Get Report : When the markets fret over a slowing economy, Cramer told viewers to circle around the long-term themes that don't need a strong economy, themes like video games, which is a $23.5 billion market.
Fortunately, the gaming industry has multiple ways to win, Cramer said, including chipmakers Nvidia, which has nearly doubled in 2016, and Advanced Micro Devices, which has shot up 132% so far this year. Both companies are well run and poised for continued growth.
Then there are the game developers themselves, mainly Activision Blizzard, Electronic Arts and Take-Two Interactive. Cramer said EA is the safest bet, trading at 20 times earnings, while Activision offers more upside, but also more risk. Take-Two is the most expensive of the group , he noted, but would still be a buy into any weakness.
Perhaps the only segment to be avoided are the game retailers, including GameStop, which trades at a scant six times earnings but still earned a spot in Cramer's penalty box.
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At the time of publication, Cramer's Action Alerts PLUS had no position in stocks mentioned.