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Last year was a strong one for initial public offerings, and so far 2014 looks set to at least keep up the pace. Heading into February, a slew of companies are set to make their market debuts. Week one of the new month will see the IPOs of several different issues across various sectors; we've picked out a few of the more notable stocks coming to market in the next few days.
Although early-stage buying of new issues can be profitable, we have to caution that IPO investing carries above-average risk, because initial stock prices can be far from the value the market eventually puts on the company's shares. Of course, this situation provides immense upside potential ... though it also presents the chance of losing a big chunk of an investment. You have been warned.
Anyway, on to this week's players.
Much of the reason the IPO space has been so thick over the past year or so is the number of biotech companies coming to market. That trend is still in force, with a host of sector titles set to list in the coming weeks and months. A specialized play is this company, which concentrates on the development of T-cell vaccines for tough diseases such as clamydia, herpes, and malaria. The company managed to attract nearly $90 million in venture-capital funding, which is good, because thus far, it has no organic revenues and has consistently posted losses. Its emphasis on the preventive segment could help distinguish it from its peers, however, and it seems to have a talent for raising the capital it needs. Genocea Biosciences plans to list on the Nasdaq this Wednesday, trading under the ticker symbol GNCA. The company will sell 5.5 million shares at between $12 and $14 per share.
Continental Building Products
One of the bigger IPOs of the week will belong to this firm, a producer of wallboard and joint compound materials used in construction once known as Lafarge Gypsum. With new home construction on the upswing and anticipated to continue, this issue is sure to attract some attention -- all the more so given that its underwriting syndicate is stuffed with heavy swingers such as Citigroup (NYSE: C ) and Deutsche Bank (NYSE: DB ) Securities. Although the firm landed squarely in the red in both fiscal years 2011 and 2012, it was profitable for the first nine months of the following year, while boosting its top line by 13% compared with the same period of 2012. Continental Building Products will make its market debut on Wednesday and has priced its 13.2 million-share issue at between $16 and $18 per share. The company plans to trade on the New York Stock Exchange under the ticker symbol CBPX.
For IPO fans who like to twin their investments, it would make sense to allocate capital to this one in combination with Continental Building Products. Ladder Capital is a commercial real estate financier, originating $5.4 billion worth of such financing from its launch in late 2008 through September 2013. It boasts a wide spread between its interest income and interest expense and has been well in the black in every fiscal year since 2009. Ladder Capital's underwriters include some of the biggest names in IPO underwriting, including Bank of America's (NYSE: BAC ) Merrill Lynch, Wells Fargo (NYSE: WFC ) Securities, Citigroup, and J.P. Morgan. They're unloading 13.3 million class A shares of the company at between $16 and $18 per share. The stock should begin trading Friday on the NYSE bearing the ticker symbol LADR.
On the subject of hot sectors, it seems everyone wants a piece of the current energy boom. Put this Chile-based oil and gas exploration and operation company on the list. GeoPark is a serious operator in its home turf of Latin America, with numerous plays spread across Brazil, Colombia, Chile, and Argentina. Its finances appear healthy of late; as of the end of last September, the company had already matched the $250 million in revenue it brought in for the entirety of 2012, and it managed to boost its bottom line to over $25 million. Beginning on Thursday, GeoPark is parking its shares on the NYSE under the ticker symbol GPRK. JPMorgan Chase's (NYSE: JPM ) near-eponymous J.P. Morgan is leading the underwriting syndicate, which hopes to sell 20 million shares at between $8 and $10 apiece.