Cramer cautions investors to avoid these 4 retail stocks that recently went public

CNBC’s Jim Cramer on Friday provided a list of four newly public retail stocks investors should stay away from.

The “Mad Money” host said that as companies that went public in the last year continue to lose their novelty and value, knowing which losing stocks to avoid can help investors pick winning ones.

“When you see a massive flood of IPOs, that’s often a real bad sign,” he said. “I hope you took my advice and steered away from these names because if so, I think you could’ve saved yourself a lot of money,” he added.

Here’s the four retail companies that Cramer warned investors against:

1. Allbirds

Cramer said that Allbirds, which became public in November and whose stock price has been on the decline since peaking at $32 that same day, is too turbulent a stock to predict its movement. He blamed the stock’s decreasing price on rash buyers.

“The problem with Allbirds and its fellow travelers is that you had way too many naïve investors buying this thing without any regard for the price simply because they liked the brand,” Cramer said.

Allbirds was down 6.22% on Friday. “There’s just no telling where it will find a floor” despite the company reporting an upbeat full-year forecast on Feb. 24, Cramer said. 

2. On Holding

On Holding, a footwear company that went public last September, is profitable but still not a buy, Cramer said. The fact that the company produces nearly all its shoes in Vietnam, which took safety precautions during the delta wave of the Coronavirus, could result in the company facing “the mother of all supply chain problems” down the line, Cramer said.

He added that On Holding could become a buy in the future, but it’s unclear when that will be. The stock dropped 3.04% on Friday.

3. Rent the Runway

Cramer said Rent the Runway stock seems to have found a floor recently in the single digits but is still too unprofitable to invest in. He added that the designer apparel and accessories rental service reported strong user and revenue growth in its first quarter this year, but its losses and beat-up stock makes it unreliable. “I’d rather buy Macy’s,” he said.

Rent the Runway stock was down 4.55% on Friday.

4. The RealReal

Cramer said “no thank you” to luxury consignment shop the RealReal, citing the company’s “pretty discouraging” outlook for the year reported on Feb. 23, along with worse-than-expected losses.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer