After soaring 34 percent since he suggested the company last October, the “Mad Money” host cautioned against buying Monday’s dip. Shares of Yeti, the high-end cooler manufacturer that went public last November, fell more than 5 percent during Monday’s trading session.
“Even after today’s reversal, the stock’s still up dramatically from where it was trading when I gave it my endorsement in November,” Cramer said.
Yeti’s business is in great shape and has four initiatives that paint a positive future, he acknowledged. The company is focusing on attracting new customers, rolling out new outdoor lifestyle products, expanding abroad, and stretching its direct-to-consumer business, which grew 45 percent last quarter, Cramer pointed out.
Selling at 19 times the earnings estimates for next year, Cramer said the stock is cheap at current levels. But there are some headwinds in the near future that he thinks investors can avoid by letting it come down and buying shares in stages, he said. Current shareholders can also take some profit at current levels, he said.
“Yeti’s lockup on insider sales expires in a little more than six weeks on April 23rd … and that tends to put additional pressure on a stock. So proceed with caution for this brief window,” the host said. “As much as we believe in this business, I also know the stock can take a lot more punishment before the pain comes to an end.”
Click here to find out how Cramer suggests playing your hand.