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

The next few days will be stuffed with new stock issues, particularly of high-profile games producer King Digital Entertainment. We pick four of the most intriguing.

Mar 23, 2014 at 2:00PM

This is the kind of week that IPO investors dream about. Fresh issues will tip into the double digits, with 11 stocks slated to make their debuts between now and Friday. One of those rookies, King Digital Entertainment, stands to raise as much as $532.8 million in its flotation -- and that's not even the biggest issue of the week! If the rest of 2014 is as hot as the next few days are going to be, this year will go down in history as one of the busiest and most exciting (not to mention lucrative) in IPO history.

Before we tuck into our company sketches for the week, though, we have to issue our usual warning: IPO investing carries above-average risk, since initial stock prices can be far from the value the market eventually puts on the company's shares. This situation provides immense upside potential, but on the flip side it also opens the possibility of losing a big chunk of an investment.

That said, here are four new issues coming to market over the next few days worth keeping an eye on.

King Digital Entertainment
The maker of the wildly popular digital game Candy Crush Saga is seeking a big prize from the markets, floating well over $500 million worth of shares. When announced, the issue was met with skepticism, particularly from investors who remember the unpleasant 2011 IPO of fellow game producer Zynga (NASDAQ:ZNGA). That firm's shares dropped 5% in their first day of trading, and have since declined to less than half of their $10 issue price. King Digital has better recent fundamentals than its rival, however, and is generally a more stable company. Look for this stock to trade robustly when it hits the market on Wednesday.

A total of 22.2 million shares of King Digital are being brought to market for $21 to $24 per share, and they should trade on the New York Stock Exchange under the ticker symbol KING. The issue's lead underwriters are JPMorgan Chase (NYSE:JPM) unit J.P. Morgan, Credit Suisse (NYSE:CS), and Bank of America Merrill Lynch.

Nord Anglia Education
Can an IPO make the world smarter? This one from a Hong Kong-based firm just might. The company is an operator of private schools, 27 in total at the moment spread across China, Europe, the Middle East, and North America. It currently enrolls more than 17,000 students and at average revenue per pupil of roughly $26,600 that adds up to significant cash flow. Although much of the IPO's proceeds will be used to retire debt, Nord Anglia Education's fundamentals are improving, and it operates in an interesting corner of the educational market.

The company's IPO is slated to take place on Wednesday. Credit Suisse, Goldman Sachs (NYSE:GS), and J.P. Morgan are its lead underwriters, and the stock should bear the ticker symbol NORD on the NYSE. A total of 19 million shares will be sold at $15 to $17 apiece.

Another education-related IPO comes from this company, which produces a software platform that allows colleges and universities to deliver their offerings online to students around the world. It's already signed up famous institutions such as the University of Southern California and Georgetown, and its IPO timing seems appropriate -- in its prospectus, it cites a Department of Education growth estimate of 13% for post-secondary degree enrollments over the decade ending in 2021. Typically for an IT firm, however, robust top-line growth has not yet been matched recently by profitability on the bottom line.  

2U's IPO is currently scheduled on Wednesday, in an issue that will see the firm float nearly 9.2 million shares at $11 to $13 per share. The stock should trade on the Nasdaq under the ticker symbol TWOU. Goldman Sachs and Credit Suisse are the lead underwriters.

CBS Outdoor Americas
Technology and fashion constantly buffer and influence the advertising market, but one aspect of it -- billboard marketing -- will always thrive. That, at least, is the argument from this specialist firm, which hopes to function as a real estate investment trust once it's gone public and become separated from current parent CBS.The company is well established in its niche, and thanks in no small part to that it's managed to grow its revenues and stay well in the black over the past few years.

CBS Outdoor Americas is the largest new issue of the week, which is saying something -- 20 million shares are to be floated at $26 to $28 apiece on Friday. Lead-underwriting the gold rush are this week's usual suspects: Goldman Sachs, Bank of America Merrill Lynch, and J.P. Morgan, plus Morgan Stanley (NYSE:MS). The ticker symbol should be CBSO, with the stock trading on the NYSE. 

Want to retire rich?
It's no secret that investors -- particularly those who favor IPOs -- tend to be impatient with the market. The best investment strategy, even for those tigers, is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs, and owns shares of JPMorgan Chase. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information