Madison Air Solutions Corporation (NYSE:MAIR) was among Jim Cramer’s stock calls, as he discussed the rising market speculation. Discussing MAIR’s recent IPO, Cramer said:
With the market now fully recovered from its Iran-related weakness and back to setting fresh all-time highs, it makes sense that the IPO window would open again. And sure enough, today we got the largest new listing of the year, the IPO of Madison Air Solutions… This is basically a successful rollup that’s made a bunch of smart acquisitions over the past decade to build itself into an airflow and cooling powerhouse. That’s the best way to think about Madison Air. It’s a shrewd rollup with an attractive set of industrial end markets… How do the numbers look? Honestly, pretty good… The fact that Madison is accelerating revenue growth… makes the story even better. Company’s also solidly profitable… I think the best way to look at the valuation for Madison Air is with what’s known as an enterprise multiple, measures enterprise value… We have to use last year’s numbers… I want to compare Madison to Vertiv… When you stack these stocks up against each other, I have to say that I think Madison Air looks pretty darn reasonable… At nearly $32, the company has an enterprise multiple of around 20…
I think MAIR or Mayor can be bought right here, right now even after the stock’s strong debut. For an initial price target, i’ll throw out 41 bucks, which would give the company roughly the same valuation as Trane, the most expensive HVAC comparison here… But I’m pretty optimistic about this in fact, because I like the story… Here’s the bottom line: The market has bounced back and now the IPO market has reopened for business with the largest deal of the year. Fortunately, it was a good one. I like the Madison Air story. I like the numbers and the price still looks fine to me even after solid pricing and a good open today. Even after this move, I think Mayor of East Town (Cramer’s nickname for MAIR) is a buy.
A stock market data. Photo by AlphaTradeZone on Pexels
Madison Air Solutions Corporation (NYSE:MAIR) manufactures air quality and climate control systems under brands like Reznor, AprilAire, and Big Ass Fans. It also provides custom design and repair services for its heating, cooling, and filtration lines.
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