The initial public offering (IPO) is an exciting event for investors as they provide whole new opportunities. IPOs are often new businesses that have outpaced the private capital markets due to the increasing popularity of their disruptive products and services. It is inherently risky to invest in companies with relatively limited operating histories that are beginning to challenge leaders who have more resources and stronger brands. Nevertheless, bottlenecks in the growth-phase can provide demonetisation returns to shareholders as they climb to industry-leading positions.
Here are three interesting IPO stocks that have recently entered the public markets.
Palantir is a data analytics powerhouse
Palantir (NYSE: PLTR) Was established in 2003 by a group consisting of PaypalOf (NASDAQ: PYPL) Peter Thiel. Palantir is a leader in data analytics who has risen to prominence for his role in counter-terrorism and anti-crime activities. The company gained an excellent reputation for its talented workforce, a roster of high-profile investors and a list of clients including government agencies and industry-leading enterprises. Palantir’s notoriety made it one of the most awaited IPOs in recent years. In early 2014, the company was valued at $ 15 billion, placing it among the most valuable private technology businesses.
The stock went public in September 2020 through direct listing instead of a traditional IPO. This means that existing shares were sold on the open market, rather than new shares being publicly created and sold. For individual investors, both are functionally similar events that lead to a new stock available for purchase on exchange. Palantir shares started trading around $ 10, but the stock has risen more than $ 27 per share since that period S&P 500 Increased by 10%.
Investors should be aware of the risks of buying stocks that have recently tripled in price for a company that has never been profitable. Palantir’s management is happy to pursue short-term profits to invest in marketing and corporate infrastructure, which is growing rapidly, but this clearly means that shareholders will have to continue to wait for the return of capital. If Palantir continues to win major contracts and is taking data analytics market share, which is a major growth industry, the company’s ceiling is certainly above its current $ 47 billion valuation. This stock is a watch for growth investors.
Avantor to benefit from Life Sciences Catalyst
Avantor (NYSE: AVTR) Is a specialty chemicals company serving customers from the biotech, pharmaceutical, medical and advanced materials industries. The company was founded over 100 years ago, but has experienced many growth and ownership changes since the acquisition of the two companies in 2017, and has rounded up to its current form. Biopharmaceutical, diagnostics and other life sciences industries are expected to grow due to aging, expanding middle class in developed markets and emerging markets, and Avantor is in a great position to benefit from those trends as a supplier.
Avantor hit the public markets at $ 14 per share in May 2019 and has since left the market on the way to $ 27. Much of the current discussion is around the company’s role in supplying materials for COVID-19 vaccine research and development. Avantoor may lack the luxurious upsides available in some tech stocks with room scale, but it currently trades at only a modest forward P / E ratio of 23, despite consensus predicting that over the next few years The annual income growth rate is above 20%. Avantor should be on your watch list as a recent IPO with a fair valuation and clear growth catalyst.
Crowdstrike is growing rapidly in cyberspace
Crowdstrike Holdings (NASDAQ: CRWD) Sony and gained notoriety on behalf of the Democratic National Committee for their work in response to the cyber attack. The cyber security industry is gaining traction among investors as it is going to be an important part of business and everyday life. Remote work requires data protection, online sales channels need security to work properly and ensure safe transmission of funds, and a growing number of connected devices employ technology solutions to protect privacy Is required. Companies leading the cybercity industry will have very strong growth catalysts for the future.
Crowdstrike’s June 2019 IPO was set at $ 34 by underwriters, but the stock traded at $ 63.50 due to a market appetite for exposure to major cyber names. After a short period of time, the stock ended seven difficult and volatile months until it began appreciating sharply in Q2 of 2020. By December 10, the shares crossed $ 178. Much of this accolade was built on a bull market, which included almost all technical names, but Crowdstrike’s top-line growth continued to affect each income season.
Like Palantir, Crowdstrike is an unprofitable company with an aggressive price. The security company is focusing on growth rather than profits. Sales are nearly doubling every year, attracting the attention of growth investors and Wall Street analysts, pulling more buyers into the market and higher prices. Buyers should pay a forward P / E ratio of over 500 and a price-to-sale above 46, both high, but this is a stock to see a serious long-term upside.