Author: Craig Adeyanju
Estimated read time: 3 minutes
Publication date: 4th Oct 2019 12:17 GMT+1
For growth investors, recent Initial Public Offerings (IPOs) are a good hunting ground. Prices at IPO are theoretically the lowest prices that a company should be worth per share. Therefore, if properly valued and growth is achieved, there aren't any moves more attractive than buying shares of a company around its IPO price. For instance, investors who bought into Facebook Inc. (NASDAQ: FB) near its IPO price without selling any amount have enjoyed nearly 360% as of Oct. 1, 2019.
The returns become ridiculously high when you consider Apple Inc. (NASDAQ: AAPL) and Amazon.com Inc. (NASDAQ: AMZN), which has returned over 40,000% and 87,000% respectively. Of course, companies like Apple and Amazon don't come around often. But one can see what's generally possible by getting in at the floor level of a stock.
As of the end of September, 114 companies have gone public in the US stock market since the beginning of 2019, according to the IPOScoop website. The best performing IPO stock this year is Beyond Meat Inc. (NASDAQ: BYND), which has returned over 485% on the IPO price of $25 per share. About 5 other stocks including Zoom Communications have returned over 100% on their respective IPO prices.
Looking for the next 100 percent plus IPO stock? Here's are a few stocks that are still trading near their IPO prices to consider.
Since its IPO on April 18 at a price of $19 per share, Pinterest Inc. (NYSE: PINS) is up by over 39% as of close October 1. Here's a good reason to be optimistic about the future of PINS stock. While many regard Pinterest as a social media company, in competition with the likes of Facebook, Twitter and Snap Inc., the company has a unique proposition that gives it an edge over other social media giants. For the most part, users can alternate between Facebook, Twitter and Snap's Snapchat to satisfy their craving for using a social media platform. This means that, with attractive features, these three social media platforms can lose users to one-another. However, that's not the case with Pinterest, which is essentially a social discovery platform, where consumers get view pictures to get inspired for their own project. Neither Facebook, Twitter nor Snapchat have this offering fundamentally.
Investors who bought shares of Revolve Group (NYSE: RVLV) close to its IPO price of $18 per share has gained over 30% since the stock debuted on the New York Stock Exchange on June 7. The U.S. based retailer with a focus on the millennial and generation Z consumers. With a model of working with influencers across various social media platforms to put fashion products in front of consumers, Revolve understands how its target consumers make buying decisions. After all these cohorts spend more time on social media than any other generation in existence.
Disclaimer: Craig Adeyanju is an experienced financial consultant who writes for Finscreener.com. The observations he makes are his own and are not intended as investment or trading advice.
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