hey guys how's it going it's Andy from Magoo investing happy Thursday crazy this week has just
kind of flown by so far I’ve had a fantastic start to my morning had a nice cup of coffee doing some
research for this video and I was watching the masters so I’m having a great day so far yesterday
I made a video talking about my favorite video game stocks to buy and those probably the most
stocks I’ve ever talked about in a single video I think I talked about seven of them and just
my luck I uploaded the video around three o'clock and then YouTube went down so if you missed that
video yesterday I’ll link that above right now in today's video we're going to be talking about one
of the most exciting IPO’s of 2020. so far 2020 has seen a lot of IPO’s more than normal actually
according to this article I found there have been 369 IPO’s this year
compared to only 213 at this point a year ago 2019 was pretty disappointing from IPO’s
from that perspective we had stuff like Lyft Stock (LYFT Stock) and Uber Stock (UBER Stock) that
had so much hype going into it and they really struggled throughout 2019 but then recently I
made a video talking about how prop 22 passed and they've been pretty much skyrocketing since then
then we also had the debacle with We Work’s attempted IPO that fell through and then with
2020 we've had some interesting IPO’s none of them that have happened so far this year have
had such a big name as like an Uber Stock (UBER Stock) or a Lyft Stock (LYFT Stock) we've had
stuff like MacAfee the cyber security company which fell a little bit after its IPO and then
Snowflake Stock (SNOW Stock) became one of the larger tech stocks after it doubled on the day
of its IPO so some big offerings there and then Airbnb Stock (ABNB Stock) announced this week that
they're delaying their filing for their IPO until next week and door dash Stock (DASH Stock) and
Wish Stock are expected to IPO by the end of this year but I do want to talk about one of my
favorite 2020 IPO’s in a stock that I think could realistically double in 2021. it was actually a
requested video and I wasn't really going to talk about it until something specific happened and it
wasn't the earnings report it was the share lock up period so I’m going to talk about that in
today's video but before getting started I do have to say that I’m not a licensed financial advisor
and this is not financial advice anything you hear in this video is just me giving my own opinions on
the stock market and need to do your own research before making any investment decisions also if
you've been enjoying this video really appreciate it hit the like and subscribe button as would help
my channel out a lot just a reminder I am going to be making one or two videos this weekend talking
about your guys’ favorite stocks and giving some analysis and how I feel about them so if there's
any stocks that you would like me to cover please leave them in the comments section down below
so today we are going to be talking about Lemonade Stock (LMND Stock).
Lemonade Stock (LMND Stock) ticker symbol $LMND I was currently trading for 57 and 90 cents and
it's up almost exactly 100 percent since it IPO’d at 29 however when it closed on its IPO
date it opened at 29 and it closed at 69. so we've had some IPO’s this year that just shows
how difficult it is to determine the actual price and valuation of these companies I talked about
snowflake doubled on its IPO and Lemonade Stock (LMND Stock) went from $29 to $69 on its IPO date
so it shows how difficult it is to predict or kind of assume what the value of a company is um
and so at this point it is up 100 but based off of the highs were ended it's
kind of confusing on CNN money but compared to the overall insurance etf that's down 8.5
on the year it's pretty interesting and so Lemonade Stock (LMND Stock) is a
very interesting company as weird as it sounds I might compare it to something like a robin hood
and I’ll explain why in a little bit but I’m going to break down this video talking about
Lemonade Stock (LMND Stock) into three main sections the first one I’m going to talk about
how the company operates because Lemonade Stock (LMND Stock) is not a stock or a company that
I knew that much about before it went IPO so I’m going to talk about how the company works two I’m
going to talk about kind of the fundamentals some of the numbers that you need to know for myself
to be comfortable buying into the stock and then number three we're going to hop on over the charts
and I’m going to talk about what I see there and make my final determination on how I feel about
Lemonade Stock (LMND Stock) stock going forward all right so let's talk about what
Lemonade Stock (LMND Stock) is I’m just going to go straight off their website
they have their about Lemonade Stock (LMND Stock) section so let me read what it says
Lemonade Stock (LMND Stock) insurance company is transforming the very business model of insurance
by injecting technology and transparency into an industry that often lacks both we're creating an
insurance experience that is fast affordable and hassle free unlike any other insurance company
we gain nothing by delaying or denying claims we take a flat fee so we handle and pay as many
claims instantly as possible we currently offer renters homeowners and pet health insurance so
basically the idea of Lemonade Stock (LMND Stock) is it's supposed to be a transparent quick and
easy insurance company and the people that they're mainly trying to target are the younger generation
people that have never bought insurance before from the information I could find is that 70
of their customers are first-time insurance buyers that are under 35 years old
so this is a very young demographic and kind of the idea is that you wrote them in at a
younger age with the renters insurance which is relatively cheap and then eventually when they
get older and buy houses the homeowner's insurance is going to be significantly more expensive but
they have had some problems with retention rate as the younger generation is more comfortable
switching around between companies which I think is a good thing because it improves
competition between these companies but I think it's a really interesting idea
they say that they use an ai system to process claims and determine risk which is
very interesting and is very different than how these other insurance companies work
they say they can process claims in as little as three seconds which is crazy to think about
and then some of the interesting things is that the company's considered a b corp which means that
it is a benefit corporation status what this means is that they have a give back policy that donates
part of the money that they bring into a variety of different charities and the way it kind of
works is as you sign up you're given the option of some different charities to pick from and
from the numbers that I could find in 2019 they donated 600 000 to 26 different non-profits
and so this is a really interesting thing and it's not very common when you see these
publicly traded companies because when you think of publicly traded companies
you think of companies that are trying to make as much money as possible so if they're donating
six hundred thousand dollars in 2019 how are they making money kind of the benefit of their company
and their identity is about transparency so it's pretty easy to figure out how they're making money
so from what I could find from the premiums that are paid 25 of it is a fixed fee for the
company with a surplus of it being for profit and then the 75 is used for claims taxes fees
and then the remainder of that goes to the customer's choice for their charity
so what this means is this is a business of scale as it and continues to increase in size they're
going to be making more money donating more money to charity you also have the idea that
I mentioned that you're trying to get them in on the cheaper plans or the renter's insurance
and then have them eventually transition to the homeowners insurance which would be more expensive
and so that's kind of how the company operates it's very cheap it's very easy to do online
with the app it's very quick and that's why I was kind of comparing it to something like a robin
hood robin hood changed the game when it came to investing because in the past it was much more
difficult to make transactions it was expensive you had these commissions and it changed the way
that people were able to invest and it made us that the younger generation was comfortable buying
into these stocks which is great for everyone and so I think Lemonade Stock (LMND Stock) could be
something similar to that where it's making it very transparent everything is up front
it's relatively cheap and it's giving people the opportunity to buy insurance and maybe
didn't think they could afford it in the past so I think it's really interesting off of that
now let's talk about how the company's actually been run and how the stock has moved since it
IPO’d so as I mentioned it jumped 139 on its IPO date of July 2nd and then the earnings report was
very interesting I’ve always talked on the channel why I don't buy IPO’s and the main reason is that
when a stock goes IPO some of the insiders people that work with the company or helped it go public
uh get some shares as kind of an it's almost like a thank you or like they're part of the company
and so they're given these shares and it makes a lot of people a lot of money very quick and
one of the restrictions is that there's a share lock-up period which is usually 180 days where
the people that are given those shares aren't able to sell them off because if I gave you
I don't know a million dollars’ worth of a single company's stock even if you love that company
I would want to maybe sell like half of it three quarters of it and kind of diversify my portfolio
it makes a lot of people a lot of money so the whole idea is that when a stock goes IPO the
insiders aren't able to sell immediately because it could tank the stock price and so the company
came out and announced that their share lock-up period was going to happen 24 hours after their
earnings report and so that is what recently happened that's why I’ve been waiting to talk
about this stock because now I do feel comfortable buying into a stock after their share lock-up
period and so from that earnings report things look really good but as it did coincide with the
shared lock-up period ending uh the stock was down around five percent uh as a result of those moves
from that earns report uh they narrowed their loss to 30.9 million dollars compared
to 31.1 million a year ago so not that much of a narrowing but it is a step in the right direction
but some of the really interesting things is that their total customers jumped by 67
to 940 000. from that news uh one prominent analyst kept his rating
of Lemonade Stock (LMND Stock) as a market outperform and set a price target for 105 dollars
that's where I was getting the idea the stock could double in price by the end of 2021
and so it is tough with a company like this because there is a lot of risk as you talk
about any company that is quote unquote changing the game there is a lot of risk
so far things have gone very well uh the company has increased in size significantly jumping
with the total customers by 67 percent but this is a field that is a very well established very old
type of business with the insurance companies and so trying to switch things up is very interesting
I will talk about I am a big fan of them being a class b corporation because you don't see that
very often and for someone like myself I would happily maybe not be as unprofitable of a company
if it means that money is going to be going to a good cause I’m sure not everyone feels the same
way I’m sure there's a lot of people that wish that 600 thousand dollars that was left over
was just used as profit but that's not how the company has decided to operate and I think that's
a really exciting and really respectable way to run a business and it's not something that you
see very often so this is going to be a company that just needs to increase in size significantly
at this point they've been expanding they're starting to increase kind of the offerings that
they have they announced in their earnings report that they would be offering term life insurance
and they've been starting to do stuff I think they're expanding to France after they're
already been in the Netherlands and Germany and in the united states so at this point they are
just trying to expand and I think they're doing a very good job of it I think this is a company that
you don't invest because of kind of the fundamentals the numbers that you see I
think you invest because of the idea and so that does have a lot of risk but these are
ways that you can make significant profit and so I am heavily considering buying the stock if my
Sonos Stock (SONO Stock) position gets taken from me and I’m 75% in cash I think it would
be a smart idea for me to buy some shares it's not something where I put my whole portfolio on it but
this is an interesting stock and so now that I’ve talked about how the company runs and how
the fundamentals have looked let's head over to the computer and I’ll talk about what I’ve been
seeing on the charts over there okay so here we are looking at Lemonade Stock (LMND Stock) ticker
symbol $LMND and as you can see there's not as many candles as I would normally show off
originally this is the all-time chart because the company IPO’d back in July and so you don't
have as much information to go off of but so far what we've seen is that the stock has respected a
couple areas we do have this lower area which will be the bottom support down at around 45 dollars
you have this upper area that has been respected once twice three times since it IPO’d at around
the 68 mark and then we have this area in the middle that I’m not as really convinced about
it bounced off of here once twice fell through in early September respected it from the bottom
I didn't respect it going up it's one of those areas where I would not base my
trade off of it but it is something to watch and so what you notice from here is the purple area
which is the 50-day moving average and so it does not show up until this point what this means is
this is 50 trading days after it IPO’d and so as I’ve mentioned in previous videos sometimes
these moving averages are treated as support and so far we have not really seen that but
it's possible that if maybe it kind of lingers around here for a second it could be an area
where it might bounce off of that I don't think this is the best buying opportunity right now
I would love for it to get back down to this 46 dollar mark and I’m going to set an alert for that
but right now I could be convinced of buying in at this point but I do think it's going to start
going lower the momentum after the earnings report and the share lock-up period has been pushing it
down and it could go further based off those momentum okay so overall I want to give my final
summaries on Lemonade Stock (LMND Stock) I think this is a company that I would buy based off of
the kind of vision and the way this company operates and not as much based off of the
you know the numbers the increases in revenue sure we've seen some nice things with the increases in
the customers by 67 percent but I think this is a company that I would buy just based off of the
idea and so I think that's solid based off of that I love that they're donating to charity which is
not something you see very often I think the idea is very good targeting the younger generation and
the way that you make this a successful business as you improve retention rate and you keep people
uh with your company transitioning from the renter's insurance to the homeowner's insurance
and now they're offering it the term life insurance looking at the charts
since it has IPO’d pretty recently you don't have as much price action to go off of that's
another reason why I don't love IPO’s that much but based off the charts it is looking like it
could be out of support right now we do have the 200-day moving average which is a purple
line that was on the chart and it could bounce off of that it has not really respected it so far but
it could be something to watch going forward so as I mentioned if my Sonos Stock (SONO Stock) shares
do get taken away from me I’m heavily considering buying into the stock because I honestly do think
this could be a stock that doubles uh in 2021 so let me know what you think about
Lemonade Stock (LMND Stock) stock and let me know if there's any other IPO’s that you're
watching going forward and maybe something that I can talk about in a future video
but thanks for watching I appreciate all the support and I will see you in the next video