- CNBC's Jim Cramer said both of the newly public grill makers, Traeger and Weber, offer promise for potential investors.
- "If you want a fast-growing grill play, Traeger's the way to go," the "Mad Money" host said.
- "If you want a more mature, steady-eddie grill stock that I think is going to deal well over time, go with Weber," he said.
CNBC's Jim Cramer on Thursday spoke positively about the stocks of two newly public grill makers, Traeger and Weber, but said the rivals differ in ways investors need to understand before making a decision to buy shares.
"I think this is a good moment for the entire grilling industry, so as with barbecue … it's all a matter of taste," the "Mad Money" host said, noting the sector was helped by the renewed interest in outdoor activities during the coronavirus pandemic.
"If you want a fast-growing grill play, Traeger is the way to go. If you want a more mature, 'steady Eddie' grill stock that I think is going to deal well over time, go with Weber," Cramer said.
Traeger finished Thursday's session at $25.78 per share. While that's above its $18 IPO price from late July, the stock has pulled back in recent days since touching $32.59 on Aug. 10.
Shares of Weber closed at $15.69 apiece Thursday, about 12% above their IPO price of $14. Weber shares traded as high as $20.44, on August 10, which was the company's third trading session since debuting on the New York Stock Exchange.
Cramer said he likes how Traeger, known for its wood pellet grill, generates nearly a quarter of its revenue from so-called consumables last year. That includes those wood pellets, but also rubs and sauces for meats.
On the other hand, Cramer said Weber has an advantage in the all-important area of direct-to-consumer sales, which carry higher margins by cutting out the middleman. Direct-to-consumer sales amount to more than 20% of Weber's revenue in 2020 compared with 7% for Traeger, Cramer said.
Cramer said investors looking at buying shares of either company should keep in mind that applying traditional valuation metrics to Traeger and Weber is a bit of a challenge right now because "we don't have clear estimates" yet for key financial numbers.
"But it's pretty clear that Traeger trades at a meaningful premium to Weber. … However, given its faster growth rate, it does deserve to trade at a premium," he said.
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