High-end grill maker Traeger Inc. (COOK) got grilled Tuesday, falling nearly 16% after reporting third- quarter earnings that were worse than expected. While revenue of $162 million was actually $21 million ahead of the consensus, the quarterly loss (adjusted) of nine cents a share was three cents worse than consensus.
It has been quite a ride for Traeger, which went public in July at $18 a share, hit the mid-$32 range within two weeks of the initial public offering and closed Tuesday at $16.57. COOK currently trades at just under 25x next year's consensus estimates.
The thing that was more interesting was Tuesday's action in fellow grill maker Weber Inc. (WEBR) , which dropped about 7% on no company-specific news but likely in sympathy with COOK. Weber went public at $14 a share just five days after Traeger's debut, rose above $20 intraday in its first week of trading, and closed Tuesday at $14.57.
Weber recently initiated a four-cent quarterly dividend, which implies a 1.1% forward dividend yield. Its shares currently trade at 23x next year's consensus estimates of 62 cents a share, with a healthy amount of analysts (eight) covering the name.
I am warming to Weber. Some might call it a busted IPO, but that terminology might be a bit strong in this case. It is a very well-known brand name and I am partial to its products, including the Weber grill that has been in my backyard for the last 20 years. Weber in my view produces high-quality products.
There's one other facet of Weber that caught my eye Tuesday, namely that the short interest currently is reported at 22.98%. That's a number to keep an eye on.
As a value investor, I am not typically a buyer of recent IPOs. If anything, I will wait for the luster to wear off, for the growth crowd to move on, and for the price to drop far enough to build in a margin of safety. There are plenty of recent IPOs in which I am interested. Besides Weber, there's Krispy Kreme (DNUT) , BurgerFi International (BFI) , The Duckhorn Portfolio (NAPA) and Vintage Wine Estates (VWE) ; all are names that are intriguing if they get cheap enough.
