CNBC’s Jim Cramer said on Friday he sees long-term potential for newly opened companies Origin Materials and Portillo’s, suggesting that interested investors can buy their shares under certain conditions.
Here’s what the host of “Mad Money” thinks about each of the companies and their respective investment caveats.
Cramer said he viewed Portillo’s – a Chicago-based restaurant chain known for its Chicago-style hot dogs – as an engaging story over time as it expanded its store footprint nationwide.
However, the stock is not performing in this environment right now as investors grapple with a more aggressive Federal Reserve, he warned. For this reason, Cramer recommends starting “a small position here”.
One negative point about Portillo is that a private equity sponsor, Berkshire Partners, still owns a majority stake in the company even after it went public in October, Cramer said. “The overhang when they were finally able to ring the crate could do a lot of damage,” he said.
But ultimately, Cramer said he was impressed with Portillo’s fundamentals, particularly average unit volumes and restaurant-level margins. The fast-casual chain is also profitable, he said.
Portillo’s is still “very expensive” on a price-to-earnings basis, Cramer said, after the stock closed Friday at $ 31.73 per share. Its all-time high of $ 57.73 was reached on November 17.
Even so, he indicated that “if the stock continues to be hit, here’s what you do: you buy some, and you gradually buy more into the weak because I think that could be a great restaurant story to. long term”.
Origin Materials, which completed a SPAC merger in late June, deserves a speculative investment, Cramer said. He defines this as only buying stocks with money, investors can get away with losing.
“I think Origin has a great long term history, although the short term can be difficult because this type of action is currently shunned by Wall Street,” Cramer said. “Still, at $ 6 a share, I think you grab a flyer on Origin. That’s half the price of a good deli sandwich in New York City. “
Cramer said that Origin stands out because although it is a chemical industry, “it is a sustainable chemical company.” Instead of using petroleum-based raw materials like much of the industry, Cramer said Origin uses wood chips, waste pulp and even cardboard as raw material.
“In other words, they can make plastic from wood chips rather than oil,” Cramer said, noting that the company’s environmental focus is important and represents a major opportunity.
“If they can really do anything, the value of this business could be huge. Of course, we don’t know if they can do it,” he warned. Even though it has big name investors and reservations from companies like PepsiCo, Origin is still in its early stages, he said.
“Just remember I am blessing this one for speculation only which means don’t even think about buying it with money you can’t afford to lose,” he said. .
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