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. 

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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.

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.

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