Blade Air Mobility and Wheels Up are cheap enough to speculate

CNBC’s Jim Cramer on Monday analyzed three new travel-related public companies, suggesting investors would consider buying shares of Blade Air Mobility and Wheels Up while staying away from Clear Secure.

“Instead, I would avoid expensive, opaque companies like Clear Secure and consider speculating with Blade and Wheels Up,” the “Mad Money” host said. “Speculate. Remember, these companies don’t make money, but they have revenue … and it’s easy to understand and I like them, and I think they have great reliability.”

Blade, which offers on-demand air travel with helicopters and seaplanes, completed its SPAC merger in May and has largely traded between $ 7 and $ 11 per share, Cramer said. In February, when the deal was announced but not yet finalized, SPAC shares traded at nearly $ 20.

Blade closed Monday at $ 9.29 per share.

Cramer said he likes Blade’s revenue growth and the fact that the company “is almost unmatched.” However, he said the valuation of the shares right now is “the best part”. He noted that it has $ 333 million in cash and short-term investments since its last quarterly report, but its market capitalization is about $ 645 million.

“Basically, the business is valued at just over $ 300 million here, which analysts expect Blade to do in sales by 2024. Even if you use next year’s estimates, it will only quote sales five times. “Cramer said. “I wouldn’t be surprised if Blade could make its way from $ 9 to half of teens in the not-too-distant future, which makes Blade Air Mobility a buy-in,” he added.

Cramer said he likes private jet company Wheels Up for reasons similar to Blade: the company is growing revenue and its shares are cheap.

While Cramer said he believes Wheels Up’s mantra of “democratizing private aviation” is a bit superior, he said the company’s main collaboration with Delta Air Lines is positive.

Wheels Up also benefited from the Covid pandemic, Cramer said, noting that active members rose 47 percent in its most recent quarter, while revenue rose 113 percent year-over-year.

“As with Blade, this is a SPAC stock that has been earned, is currently $ 7 and changes, trading at less than twice the sales estimates for this year,” Cramer said. “While Wheels Up is risky, it also has good growth and stocks are very, very cheap, so you have my blessing to speculate with Wheels Up.”

Cramer said he dislikes Clear Clear, the biometric detection company that went public on June 30th. He said he has concerns about retaining clean members, but the most important point is the valuation.

“Even after retiring from their highs … stocks are trading at more than 25 times sales (not profits, sales), which I find very expensive for a company that is not expected to make a profit by 2023 as the first, ”Cramer said. “As much as I like the biometric identification history … I think there’s too much uncertainty around the numbers to recommend such an expensive stock.”

The host of “Mad Money” said he could justify the position if the shares hovered around $ 30, but Monday’s closing price of $ 44.80 is “too rich for me.”