Cramer: King Digital Entertainment (KING) IPO Price Break Good for Market

NEW YORK (TheStreet) -- TheStreet's Jim Cramer says the King Digital Entertainment  (KING) IPO fell flat, but he says this is a positive development because deals need to "break print" in order to cool that part of the market. Even though it is not an expensive stock, he says it's good for the market that it broke price.

Cramer notes Sirius XM  (SIRI) has already been cooled and yet still has plenty of cash flow. He likes the stock for that reason.

Cramer also reasons that severe winter weather has wreaked havoc on durable goods. He points to Five Below  (FIVE) and PVH  (PVH) as examples of companies that started to perform better as the weather has improved.

WATCH: Jim Cramer on King Digital IPO, Sirius XM and Durable Goods

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

KING Chart

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STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SIRIUS XM HOLDINGS INC (SIRI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SIRI's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $358.58 million or 22.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.84%.
  • The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 60.37%. Regardless of SIRI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.51% trails the industry average.
  • SIRIUS XM HOLDINGS INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SIRIUS XM HOLDINGS INC reported lower earnings of $0.06 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus $0.06).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: SIRI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates PVH CORP as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PVH CORP (PVH) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 37.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Textiles, Apparel & Luxury Goods industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $167.70 million to $196.71 million.
  • PVH CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PVH CORP increased its bottom line by earning $5.87 versus $4.36 in the prior year. This year, the market expects an improvement in earnings ($7.01 versus $5.87).
  • The gross profit margin for PVH CORP is rather high; currently it is at 54.53%. Regardless of PVH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.72% trails the industry average.
  • PVH's debt-to-equity ratio of 0.99 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.12 is sturdy.
  • You can view the full analysis from the report here: PVH Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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