3 New Issues IPO Investors Need to Know About for This Week

This week's issues include, atypically for these days, two tech firms.

Feb 23, 2014 at 2:00PM

In terms of initial public offerings, February of this year is going to go out with more a whimper than a growl. It's almost as if the tough winter decided to take a bite of the market, leaving only a few issues to chew over. True to recent form, the first stock on this week's deck is a health-care related issue, Lumenis.

Untrue to form, the second and third (Varonis Systems and 2U) are from the world of tech, a sector that's been notably absent on the IPO market in the recent past. According to data compiled by Renaissance Capital, only around 14% of total proceeds from new issues in 2013 derived from tech stocks, compared with almost 50% the previous year.    

Especially in light of the often-rocky history of new tech and health-care stocks, we have to warn that IPO investing carries above-average risk. This is 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.

OK, enough of the statistics and the caution. On to this week's candidates.

This Israeli-based company concentrates on the manufacture and sale of laser-based systems used for various surgical procedures. Its product mix is sorted into three categories -- surgical, ophthalmic, and aesthetic. Over the past five financial years, the company's top line has grown steadily if not spectacularly, while its net has been consistently in the black. In its literature, Lumenis says it believes it is "uniquely positioned to outpace market growth and expand our addressable markets by leveraging our innovative technology, extensive product pipeline, and established global sales and service infrastructure." We'll soon see if the market agrees.

Lumenis at least has some financial muscle behind its IPO. Goldman Sachs (NYSE:GS), Credit Suisse, and Leucadia's Jefferies are the underwriting syndicate. A total of 6.25 million shares will hit the market at a price of $15 to $17 apiece on Thursday, with the stock anticipated to be listed on the Nasdaq under the ticker symbol LMNS.

Varonis Systems
This company wants to get your business organized. In its words, anchored by its signature DatAdvantage solution, Varonis "provide[s] an innovative software platform that allows enterprises to map, analyze, manage, and migrate their unstructured data." That sales pitch seems to have resonated at Philip Morris International (NYSE:PM), Juniper Networks (NYSE:JNPR), and Isis Pharmaceuticals (NASDAQ:IONS), all of which are clients and have written positive testimonials about Varonis' products. Revenues nearly doubled to $74.6 million across the 2011 to 2013 fiscal years, although the company remains (slightly) in the red. With a capital boost from its share issue, maybe it can snag more top level clients and swing to profitability.

Varonis is being brought to market by Morgan Stanley (NYSE:MS), Barclays, Royal Bank of Canada's RBC Capital Markets, and this week's busiest underwriter, Jefferies. A totla of 4.8 million shares will go on sale Friday for $17 to $19 per share, and the company hopes to list on the Nasdaq under the ticker symbol VRNS.

A fresh IPO filing comes from this tech concern, which wins this week's award, hands down, for shortest company name. 2U focuses exclusively on the higher-education market; its service-as-a-software platform allows colleges and universities to deliver their offerings online to students around the world. It's already signed up top academic names such as the University of Southern California and Georgetown, and it cites a Department of Education growth estimate of 14% for post-secondary degree enrollments by 2021. Like Varonis, though, torrid top-line growth has not yet been matched recently by profitability on the bottom line.  

The lead underwriters of 2U's IPO will be Goldman Sachs and Credit Suisse, and it'll be a substantial issue -- the company has filed to raise up to $100 million. The IPO date should be nailed down in the near future, while the company plans to list on the Nasdaq under the ticker symbol TWOU. 

What would Buffett do?
Warren Buffett has made billions through his investing and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway, Goldman Sachs, and Isis Pharmaceuticals and owns shares of Berkshire Hathaway and Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers