Why Jim Cramer's Action Alerts Plus Stays Away From New or Hot IPOs

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When looking at new or hot IPOs, why isn't Jim Cramer's Action Alerts Plus portfolio getting involved?

Jeff Marks, senior portfolio analyst at Action Alerts Plus, explains why the portfolio stayed away from investing in companies such as Lyft (LYFT) - Get Report or Levi's (LEVI) - Get Report


"[Action Alerts Plus] is run like a charitable trust. So you know, we wouldn't get any inside treatment on these IPOs, so we would have to get the after market price. And as you can see with Lyft, the aftermarket price initially on the IPO wasn't too good. So I mean that's one reason. Also, we're not flippers. We're not going to try and flip these stocks. We're long term investors. We think with a long-term mindset. So if that's the type of strategy that you're looking for, not something to be in and out, but more of a long-term, Action Alerts Plus would be an interesting product for you. And lastly, what I want to say is, you know we also had Action Alerts Plus we keep a bullpen list, right? So these are kind of, they're going to be the stocks that we have on the side. So, if we do have an IPO that we're thinking is the right investment for the retail investor? We'll let you know. We'll put that on the bullpen. You know, it's what, we may not own it ourselves, but it is something that, you know, if we like it--we'll let you know," said Marks. 

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