And we're back. After taking their traditional break around Memorial Day, the players in the IPO market are back at their desks, and they have plenty of work to do. Between now and Friday, eight companies are slated to make their debuts, six of which stand to take in gross proceeds north of $100 million. It's going to be a good week for IPOs.
Before we get into our trio of picks for the coming days, we have to run our usual caveat -- IPO investing carries above-average risk, as initial stock prices can be far from the value the market eventually puts on the company's shares. This situation provides great upside potential, but it also carries the risk of losing a big chunk of an investment.
With that out of the way, here's a look at the new issues we're keeping an eye on this week.
Nordic American Offshore
Oil drilling facilities located on the water have one big challenge -- replenishing their supplies. After all, workers can't simply walk to the nearest store to buy what's needed. That's where this specialist firm comes in; its fleet of platform supply vehicles ferry needed materiel back and forth from such installations. The company is 26% owned by veteran shipping firm Nordic American Tankers (NYSE: NAT ) and should benefit from that association.
Just under 5.9 million shares of Nordic American Offshore will be sold in the company's IPO Thursday. The price is to be $16 to $18 per share, and the stock will trade on the New York Stock Exchange under the ticker symbol NAO. The issue's lead underwriters are Morgan Stanley (NYSE: MS ) , Credit Suisse, JPMorgan Chase (NYSE: JPM ) unit J.P. Morgan, and Norway's DNB Markets.
The number of publicly traded renewable energy companies continues to expand. Abengoa Yield, a subsidiary of Spanish alternative-energy concern Abengoa, is the latest to hit the market. It's basically an acquisition vehicle for the parent firm, and its assets will include but probably not be limited to power generation and transmission. The company says it's "well positioned to be a premier company for investors seeking a total return based on stable and growing dividend income" from those properties, so it will probably start issuing a fairly chunky dividend not long after the IPO.
Lead underwriters Citigroup (NYSE: C ) and Bank of America Merrill Lynch are captaining Abengoa Yield's stock market debut Friday. A total of 23.1 million shares are going on sale for $25 to $27 apiece. The company will list on the Nasdaq, and its ticker symbol is to be ABY.
Memorial Resource Development
Even in weeks that are sleepy for new issues, there always seems to be a company involved in traditional energy coming to market. The latest entrant in this sweepstakes is this firm, which aims to draw petroleum and related products from the Terryville Complex from acreage in Louisiana. In its Q1 2014, its average net daily production was roughly 168 millions of cubic feet equivalent per day. In terms of financials, MRD's results have been mixed, but it posted an encouraging pro forma profit margin of 10% on revenue of $556 million in fiscal 2013.
On Friday, 36 million shares of Memorial Resource Development are scheduled to hit the market at a price of $16 to $18 per share. The stock will trade on the Nasdaq under the ticker symbol MRD. The issue has a host of lead underwriters, including Citigroup, Bank of America Merrill Lynch, Goldman Sachs, and Wells Fargo (NYSE: WFC ) Securities.
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