An IPO is no longer a hot ticket. A whopping 67 of the 145 companies that have gone public this year are currently trading below their original price tags. You can't take anything for granted, and it pays to learn how to invest in IPO stocks.
New offerings used to routinely skyrocket, but just nine of this year's debutantes have more than doubled. Zoom Video (NASDAQ:ZM), Beyond Meat (NASDAQ:BYND), and Palomar Holdings (NASDAQ:PLMR) are three of this year's winning rookies. Let's see why these three stocks have more than doubled in 2019.
Beyond Meat: up 209%
Putting out plant-based burgers has been a meal ticket for early Beyond Meat investors. Replicating the experience of animal-based meat products using modern plant protein is clicking with conscious consumers, and the growth has been pretty spectacular.
Net revenue shot 250% higher in the third quarter, and once again we find Beyond Meat boosting its full-year outlook. The $265 million to $270 million it's targeting for all of 2019 will more than triple last year's sales. Beyond's Meat's red ink was a red flag at the time of its IPO, but it just posted a better-than-expected profit in its latest quarter.
Beyond Meat stock has more than tripled this year, but investors following the company know it was a bigger winner earlier this year: The stock has shed more than two-thirds of its value since its summertime peak. A thin initial float helped accelerate the early hype to what was ultimately an unsustainable level, and the end of its IPO lock-up period last month didn't help. Beyond Meat has still more than tripled this year, and that's pretty meaty for a meat-alternative leader.
Zoom Video: up 103%
Providing video-conferencing solutions for enterprises has been a pretty moving picture for its shareholders, even if, like Beyond Meat, Zoom Video shares have surrendered a good chunk of their earlier gains. The stock has given up nearly a third of its springtime peak value.
Zoom's solution is catching on, and over the past year it's seen the number of clients that are spending at least $100,000 on the platform over the trailing 12 months more than double. Revenue shot 96% higher in its latest quarter, with net income growing even faster. With corporate video chats on the rise in this portable economy, it's easy to see Zoom continue to grow in popularity.
Palomar Holdings: up 226%
Insurance may not seem like a hotbed of monster gains, and some may view Palomar as a little wet behind the ears. In an industry where the best-known names have been around for several generations, Palomar was founded just five years ago. Palomar also likes to take its chances, serving underserved specialty property insurance markets including coverage for earthquake, wind, and flood events. Two-thirds of its gross written premiums are related to earthquake insurance, and it's probably not a surprise that more than half of its business stems from California.
Growth ultimately thrills. The $154.9 million in gross written premiums Palomar squared away last year may not seem like much, but this is a compound annualized growth rate of 75% since its first year in business. It's not slowing much these days, delivering gross written premium growth of 66% in its latest quarter.
Palomar didn't triple out of the gate. It wasn't as hot a debutante as Beyond Meat and Zoom, two early rock stars that peaked in July and June, respectively. But it has been a steady climber, hitting all-time highs just last week.