Know Your IPO: Cloud Peak Energy
For the “Konw Your IPO” segment, Cramer highlighted coal company Cloud Peak Energy (CLD), which is set to start trading this week under the ticker symbol “CLD.” “Cloud Peak Energy could quickly become the premium coal company in this country,” Cramer said. He explained that Cloud Peak’s parent company Rio Tinto plc (ADR)(NYSE:RTP) is looking to unload debt by selling some of its stake through the new IPO. Cramer said this is the best kind of sale, because it means that retail investors can get the new stock at a cheap price. He mentioned while Rio Tinto will still own 48% of Cloud Peak and will be issuing $600 million in debt with the offering, the IPO is still a great buy for investors. Publicly traded competitors like Arch Coal Inc. (NYSE:ACI), Peabody Energy Corporation (NYSE:BTU) and Alpha Natural Resources Inc. (NYSE:ANR) trade at over 20 times 2009 earnings. However, the deal values C loud Peak, which is the third-largest producer of coal in the nation, at just seven. Cramer told viewers that much of Cloud’s assets include highly desirable low-sulfur coal, and with demand in China and India booming for coal, the company’s future looks promising for years to come. The stock is set to price on Thursday between $16 and $18 a share. “That’s much lower than what I think this stock is worth, based on fundamentals,” he said. “At $18 or less,” Cramer said, “I think you have to pounce on this one.” Join the fastest growing community of small cap investors at Stockhideout.com
1 Responses »
Leave a Response


Where do I purchase shares of CLD and FTNT before the IPO? I know who the underwriters are but am not sure if I buy directly from them or from brokerage firm.