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

IMS Health Holdings stands to rake in nearly $1.4 billion from its market debut this week, while familiar online food delivery purveyor GrubHub will also hit the exchange in addition to IT cloud service providers Five9 and The Rubicon Project.

Mar 30, 2014 at 2:00PM

As far as the market for fresh stock issues is concerned, March is definitely not going out like a lamb. This week the IPO beast will roar loudly, with nine new stocks coming to market. Out of that group, one -- IMS Health Holdings -- will tip the scales, pricing its issue to take in a potential $1.37 billion.

Aside from that big animal, this week will see the market debut of online food delivery service provider GrubHub, which we've written about previously in a longer analysis.

Before we discuss these issues (as well as IT cloud services niche firms Five9 and The Rubicon Project), we have to wag a cautionary finger: 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 it also opens the possibility of losing a big chunk of an investment.

With that warning out of the way, let's dig in.

The Rubicon Project
At the dawn of the millennium, the bulk of tech industry IPOs were from companies somehow connected to the sale of goods or services on the Internet. Fast-forward a decade and a half later to the latest trend -- cloud computing service providers. The Rubicon Project provides a virtual marketplace for digital advertising. It promises efficiency in doing so; in its words it has "transformed the cumbersome, complex process of buying and selling digital advertising into a seamless automated process that optimizes results for both buyers and sellers." Revenue is advancing at encouraging rates, although the firm has booked net losses in each of its past three fiscal years.

Lead-underwriting this IPO are Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Royal Bank of Canada's (NYSE:RY) RBC Capital Markets. Nearly 6.8 million shares of The Rubicon Project are slated to go on sale at $15 to $17 apiece Wednesday, trading on the New York Stock Exchange and bearing the ticker symbol RUBI.

For investors who can't get enough cloud this week, there's Five9. As with The Rubicon Project, the fluffy part of cyberspace is from whence this firm delivers its wares. Five9's niche is contact centers -- i.e., customers' first point of contact with a company and its services. Five9 provides its offerings through its Virtual Contact Center, a software suite packaging a host of functions needed to implement and run such operations. The company seems to be doing a good job of capturing its segment, with sharply rising revenues, but potential investors should keep an eye on growing bottom-line losses.

Ten million shares of Five9 are scheduled to hit the market on Friday at a price of $9 to $11 apiece, trading on the Nasdaq under the ticker symbol FIVN. The lead underwriters of the issue are JPMorgan Chase (NYSE:JPM) unit J.P. Morgan, Barclays, and Bank of America Merrill Lynch.

IMS Health Holdings
By far the biggest issue of the week belongs to this company, another niche tech concern. IMS Health Holdings is a purveyor of information to the broader health care industry, and it's got reams of data -- according to the company, it's in possession of more than 500 million anonymous patient records comprising more than 10 petabytes of data. Its client base is pharmaceutical companies and other health-care firms that require such data sets for their research. Since assuming its present corporate form starting with the 2010 fiscal year, IMS Health Holdings has shown good profitability and an incrementally growing top line. Health care is a strong industry and will likely continue to be, so IMS Health Holdings seems like a good play on that growth.

J.P. Morgan, Goldman Sachs, and Morgan Stanley are the lead underwriters bringing IMS Health Holdings public. A total of 65 million shares should go on sale this Friday on the NYSE at $18 to $21 per share under the ticker symbol IMS.

If any of this week's issues is familiar to the general public it's probably this one, a purveyor of online food ordering services with a strong presence on mobile devices thanks to its popular apps. Middle-manning food has been lucrative for GrubHub, although its rising costs have dampened profitability over the past three years. Another area of concern is the size of the issue, which gives GrubHub's stock very high valuations. Nevertheless, the restaurant business is poised to grow and the firm seems to be in a good position to take advantage of this.

GrubHub is scheduled to make its market debut on the NYSE Friday under the auspices of lead underwriters Citigroup (NYSE:C) and Morgan Stanley. The company is selling 4 million shares, while other stakeholders are unloading a total of just over 3 million. The price range is currently $20 to $22 per share, and the stock's ticker symbol should be the very appropriate GRUB. 

6 stock picks poised for incredible growth
Investors who favor IPOs are always on the hunt for growth. Our own David Gardner has proved  time, and time again that he's one of the best growth investors around, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

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

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