Welcome to IPO This Week where we talk about companies going public each and every week.
And today we have 14 companies we’re going to cover, so this is a busy one. Like most
of October has been, there really isn’t a big name on the list, but there are some
companies in some interesting industries you might want to be aware of. Before we jump
into it, I want to welcome and thank the community for coming back to the channel and to let
you know that, later in the video, I’m going to share some plans for upcoming videos, so
stay tuned for that. And for anyone checking out the channel for the first time, my name
is Kevin and I want to welcome you to IPO This Week which is our weekly show where I
pull information from a variety of resources to try and save you time by giving you the
most important information for companies that are coming out, as well as the upcoming lock
up expirations and notable quiet periods ending. So really this show is meant to be more of
an introduction to the companies just so you know they’re out there and some of the main
things to be aware of…and then based on the companies with the most popularity and
interest from you in the comments, and sometimes just because of my own interest, we do more
separate and dedicated videos that provide a more in-depth analysis into those companies.
So if this sounds good to you, I hope you consider subscribing to the channel. And now
with 14 companies to talk about this week and my goal to keep this video short and sweet,
let’s get to it… First up, let’s start in the auto insurance
sector with Root, who has a very easy ticker to remember, ROOT. The company was founded
to utilize car data through mobile-based telematics technology to adjust car insurance pricing
based on the driver's personal driving habits, which is something that, while makes sense,
also makes some people uncomfortable. Root is currently licensed to provide insurance
in 36 states and is active in 30 of them; and they do have a goal to be licensed in
all 50 states by early 2021. Total revenue jumped five-fold from fiscal year 2018 to
2019, and while losses have decreased, the company continues to be unprofitable. Root
looks to be priced within a proposed range of $22 to $25 with trading expected on Wednesday.
Staying in the insurance industry, next we have MediaAlpha, symbol MAX. This is a company
that provides an automated digital ad buying platform for insurance carriers. They generate
fee revenue for each customer referral, whether or not that referral leads to a sale. Media
Alpha counts 15 of the top 20 largest auto insurance carriers as partners on its platform.
The company is showing strong revenue growth within a growing market opportunity. However,
according to Nasdaq, insiders are selling on the IPO, after receiving a $106 million
debt-funded distribution last month. The company looks to be priced within a proposed range
of $18 to $20 with trading also expected on Wednesday.
Next up is a US producer of silver and other precious metals, Gatos Silver, symbol GATO.
This company is focused on the production, development, and exploration of silver, as
well as other precious metals. As per their filing, the price of silver rallied strongly
to multi-year highs in September 2020. And as of September 30th, the price of silver
has increased 31% compared to the year-end 2019 price. The recent silver price appreciation
is believed to have been driven by monetary policy, aggressive stimulus measures and accelerating
investment demand in the midst of the pandemic, as well as disrupted production and a recovery
in industrial consumption. These factors have enhanced silver's appeal to investors seeking
a hedge against inflation, a decrease in the value of the U.S. dollar and general economic
and geopolitical uncertainty. The company is currently concentrated on the production
and continued development of the Cerro Los Gatos Mine in Mexico. The company is unprofitable
with net losses tripling from fiscal years ending December 31st 2018 to 2019. The company
looks to be priced within a proposed range of $7 to $9 with trading expected on Wednesday.
Jumping into the medical side of things, we have Biodesix, ticker BDSX who provides diagnostic
tests and services for lung disease. The company provides data-driven diagnostic solutions
to discover, develop, and commercialize solutions for clinically unmet needs, again, with a
primary focus in lung disease. The company’s operations have been impacted by the pandemic,
with revenue and gross margin falling in the first half of 2020. Biodesix looks to be priced
within a proposed range of $17 to $19 with trading also expected on Wednesday.
Moving on we have another company focusing on the lungs with Galecto, ticker GLTO, a
Phase 2 biotech developing therapeutics for pulmonary fibrosis and related diseases. The
proceeds of the IPO are for further developing its pipeline, including its lead candidate
which is for the treatment of severe fibrotic lung diseases, including pulmonary fibrosis.
The company has conducted a Phase 2a trial in 24 pulmonary fibrosis patients and has
initiated a Phase 2b trial with another 450 patients, with topline results expected in
2022. Galecto looks to be priced within a proposed range of $14 to $16 with trading
expected on Thursday. Next we have Mavenir, ticker symbol MVNR.
This company provides a suite of cloud-native software applications for network functionality
of wireless service providers. The company was taken private in 2015, but now looks to
go public again with its IPO to have the proceeds to pay off debt to its controlling private
equity controlling shareholder. Mavenir looks to benefit from the upgrading of technologies,
particularly the adoption of 5G. The company is reporting increasing revenue and decreasing
net losses…and also reports to having 17 of the 20 largest wireless service providers
in the world as customers. The company looks to be priced within a proposed range of $20
to $24 with trading expected on Thursday.
Now let’s dive into a Pool…supplies retailer named Leslie's, ticker LESL. The company who
has been around since 1963 is the largest direct-to-consumer brand in the nearly $11
billion US pool and spa care industry with 934 retail locations across the US. The company
offers: in-store testing, on-site installation and repair, equipment, parts and accessories,
and chemicals. According to theStreet.com, the company says it has a dominant market
share of 15% with a physical network that is larger than the sum of their twenty largest
competitors. Leslie's saw revenue growth accelerate strongly as the pandemic drove consumer demand
across the pool and spa industry. Leslie’s looks to be priced within a proposed range
of $14 to $16 with trading also expected on Thursday.
Now let’s move into the mortgage industry next with 2 companies. The first is AmeriHome,
ticker AHM. The company acquires mortgages through both purchasing them through correspondent
mortgage providers as well as through originating them directly from consumers seeking mortgage
loans. Additionally, the company also services the mortgages. AmeriHome’s platform was
developed to be flexible and scalable which has helped the company produce strong growth
and performance, with 21 consecutive quarters of profitability and production volume growth
of 187% from 2015 to the last 12 months ending in the 2nd quarter of this year, as cited
by Renaissance Capital. Now recent growth has been strongly impacted positively by the
drop in interest rates to record lows caused by the pandemic which has led to a high amount
of refinancings. You do have to consider uncertainty where the housing market goes into the upcoming
year as well as if most refinancing of mortgages will already have occurred. The company looks
to be priced within a proposed range of $16 to $18 with trading expected on Thursday.
And then we have the larger of the week's two residential mortgage lenders, Caliber
Home Loans, ticker HOMS. Caliber focuses directly on the purchase market and is the second largest
independent mortgage originator based on purchase volume since 2016. While revenue declined
in fiscal year 2019, revenue more than doubled in the first half of this year resulting in
the company turning profitable. Like AmeriHome, they benefited from the drop in interest rates
leading to more loans and those origination fees that come with them. But going forward,
they will have to deal with uncertainty in the housing market in the short term that
I just mentioned. And of course there’s the competition, not only with AmeriHome,
but with companies such as Guild Holdings who we talked about last week and Rocket Companies
who also IPO’d this year. Caliber looks to be priced within a proposed range of $14
to $16 with trading also expected on Thursday. Next we have Allegro Microsystems, ticker
ALGM, who is a leading global designer, developer, manufacturer, and marketer of sensor integrated
circuits, or IC's, and application-specific analog power ICs for the automotive and industrial
markets. Their sensor IC’s enable measurement of motion, speed, and position while its power
ICs include high-temperature and high-voltage capabilities. And more recently, Allegro has
acquired technologies that provide what it calls 'eye-safe distance measurement and 3D
imaging solutions' capabilities. As to financials, while margins have improved, revenue declined
in both 2019 and in the first half of this year. However, the company does believe its
total available market will grow at a compounded annual growth rate of 8.0% from 2020 to 2024.
Allegro looks to be priced within a proposed range of $12 to $14 with trading expected
on Thursday. A company that I'll just mention quickly is
Israel-based G Medical Innovations, ticker GMVD, a company that provides app-connected
medical devices for monitoring vital signs. As per Nasdaq, the company generated just
$2 million in revenue in the first half of the year and is highly unprofitable, with
a -26% gross margin. The company looks to be priced within a proposed range of $5 to
$7 and looks to start trading on Friday. Next we have another biotech on the calendar,
Inhibikase Therapeutics, ticker IKT which focuses on treatments for Parkinson’s Disease
and other related neurodevelopmental disorders. Its lead candidate is being developed for
Parkinson’s and its associated conditions. The company has filed two Investigational
New Drug applications; one for the treatment of Parkinson’s Disease itself, while the
second is for treatment of gastrointestinal complications that arise as early symptoms
of Parkisons. The company expects to begin the first dosing of Parkinson’s patients
following the IPO, so they have yet to begin Stage 1 trials. As of this time, the company
has no products on the market, meaning there is no significant revenue to speak of. Inhibikase
looks to be priced within a proposed range of $10 to $12 with trading expected on Friday.
And now onto the biggest deal of the week, Lufax, ticker symbol LU who plans to raise
$2.2 billion at a $30.5 billion market cap. The company’s aim is to create the ability
for consumers in China to obtain loans and wealth management services through an online
portal. Their focus is on meeting the demand for personal lending among small business
owners and salaried workers. According to a 2018 market research report by China Daily
cited on theStreet, the consumer finance market in China is projected to reach $1.6 trillion
by the end of 2020, representing a forecasted compound annual growth rate of 18%. Lufax
has demonstrated growth in revenue and cash flow generation, but is also reporting decreasing
operating margins. The company looks to be priced within a proposed range of $11.50 to
$13.50 with trading expected on Friday. While not on the spreadsheet, I also want
to quickly mention medical test developer GBS, with ticker symbol also GBS. The company
was founded to develop saliva-based tests for diabetes management. However, with the
pandemic, the company is now using its resources to develop rapid tests for the virus. While
pandemic-related stocks have driven interest, you may want to keep in mind that the company
has no products on the market and thus no revenue to report. And by switching focus
to the pandemic, they’re going to find themselves in a competitive market-place with companies
with much deeper pockets. As of this recording, the company looks to be priced within a proposed
range of $16 to $18 with trading to begin on Thursday.
So that’s the list of companies that we have for this week. Again, no popular names,
but some that could still turn out to be good ones to invest in. Because I’m not sure
there will be much interest in seeing a more in-depth analysis of any of these companies
coming out this week, what I’m planning to do for weeks like this, is to revisit some
of the more popular companies that have recently come out with an IPO that we’ve covered
on the channel and see how they have performed up to this point and where they could be heading.
I’m not going to tell you the first one I’ll do yet, because, A., I don’t want
to spoil the surprise, and B., because I’m not sure which one I want to do yet. And really,
if I knew, I would definitely spoil the surprise. So anyway, that’s some upcoming videos you
can look forward to seeing soon. Let’s move on to the lock up expiration
dates. This week continues a slow month of companies with lock ups expiring as we only
have Lyra Therapeutics (LYRA) whose locked up shares will be expiring on Wednesday. And
then for notable quiet periods ending, on Monday we have, Boqii Holding (BQ), Chindata
Group (CD), Yalla Group (YALA), Asana (ASAN), Mission Produce (AVO), Palantir (PLTR), and
Pulmonx (LUNG). And then on Tuesday, we have Academy Sports (ASO).
And with our agenda complete, please like the video if you enjoyed it and share with
your friends or also on any of your social media sites. And if you’re new to the channel
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free, you just gotta press that red subscribe button. And with that, I’ll wish you a good
week of trading….thank you for watching and, until next time, have a great day!