We're now several weeks past the traditional Memorial Day break for the IPO market, and the way things are going you'd never know there was a pause. A mighty 14 new issues will hit the various exchanges this week; we might need a scorecard to keep track of it all.
Out of that scrum, I've picked three big issues that are worth a little extra attention. But the curious should be warned that 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.
Anyway, on to the picks.
This week's monster IPO comes from this U.K.-based company that knows a thing or two about the capital markets -- it's a financial information services provider that's been doing its thing since 2003. According to its prospectus, it has over 3,000 clients around the globe, and apparently they're good customers -- Markit has grown its top line notably in recent years, and its net margin is consistently nice and chunky.
The IPO will go down on Thursday, with just over 45.7 million shares being sold for $23 to $25 apiece. Markit will list on the Nasdaq under the ticker symbol MRKT. The issue has an army of lead underwriters, including usual suspects Bank of America Merill Lynch, Citigroup (NYSE:C), and Goldman Sachs (NYSE:GS).
So far this year, the energy sector is no. 1 in terms of total proceeds raised from IPOs, and the debut of this oil and gas player should help pad that lead. Eclipse Resources concentrates its efforts on the Appalachian Basin, a productive site for oil and gas exploration/production stretching back many years that includes the hot Utica Shale play. The company and its predecessor entity haven't been profitable, but that could change in a hurry if the oil and gas start flowing more robustly.
Eclipse Resources will start trading Friday on the New York Stock Exchange, bearing the ticker symbol ECR, and 30.3 million shares will go on sale for $27 to $30 per share. Citigroup, Goldman Sachs, and Morgan Stanley (NYSE:MS) head the underwriting syndicate.
Performance Sports Group
Anyone who's spent time playing baseball, hockey, or lacrosse at any level is probably familiar with this Canadian company's products. It owns a portfolio of storied athletic equipment brands covering several sports, including Easton (baseball), Bauer (hockey), and Maverik (lacrosse). The company has been well in the black of late, particularly with the recent addition of the relatively high-margin Easton.
The company is currently listed on the Toronto Stock Exchange and will make its American debut on the NYSE on Friday. Performance Sports Group will be its new name; the company is changing it a bit from Bauer Performance Sports.
It anticipates it will take in gross proceeds of roughly $110 million from the sale, although it hasn't nailed down how much stock it will sell, nor at what price. The ticker symbol should be PSG, and the lead underwriter lineup is Morgan Stanley, Bank of America Merrill Lynch, and Royal Bank of Canada's (NYSE:RY) RBC Capital Markets.