10 IPOs Investors Must Watch in 2020

There have been over 280 initial public offerings so far in 2020, a not inconsequential number considering the havoc wreaked on the economy and the stock market. In fact, it's 64% more than what we had last year at this time.

What seems to be gaining in popularity for companies these days is going public through a special purpose acquisition company. These SPACs, so-called blank check companies, raise money from investors, then seek out businesses to buy and take public.

According to Renaissance Capital, over 80 SPACs have gone public this year, with some of the more notable names using a SPAC to hit the markets being Nikola and Virgin Galactic.

Here are 10 companies that went public this year that every investor should be watching today.

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The second-largest supermarket chain, with more than 2,250 stores, Albertsons (NYSE: ACI) operates numerous banners beyond its namesake stores, including Acme, Jewel-Osco, and Safeway. It's like getting a regional grocery store with national heft as Albertsons has a presence in 34 states and the District of Columbia.

Having invested heavily in improving its digital operations, Albertsons saw pandemic-driven online sales soar 276% in the second quarter. It is now looking to expand upon its two existing micro fulfillment centers over the next two years to help "deliver more groceries, faster, to customers in some of our highly concentrated areas of business."

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Late clinical-stage oncology-focused biotech ADC Therapeutics (NYSE: ADCT) is developing antibody drug conjugates, or drugs for cancer patients that use antibodies to target tumors by linking them to a cancer-killing chemical compound. In other words, the antibodies destroy cancer cells while leaving healthy cells intact.

ADC differentiates itself from other similar biotechs by using use pyrrolobenzodiazepines, or drugs that don't disrupt the DNA of cancers while killing it, which prevent the cell's DNA repair mechanisms from working.

Its lead drug candidate is loncastuximab tesirine, or Lonca, which is used to treat diffuse large B-cell lymphoma and follicular lymphoma, along with other uses.

AlloVir (Nasdaq: ALVR) is another biotech, but it's one that is working to treat the SARS-CoV-2 coronavirus. It recently received approval from the U.S. Food and Drug Administration to begin clinical trials for its ALVR109 therapy, which is being designed to halt the progression of COVID-19.

Earlier this year, AlloVir expanded its research partnership with Baylor College of Medicine to develop what it calls "an allogeneic, off-the-shelf, virus-specific T-cell therapy" for COVID-19, which analysts see as a multibillion-dollar opportunity.

You may be sensing a theme here. Beam Therapeutics (Nasdaq: BEAM) is a biotech involved in the development of next-generation gene-editing technology, as well as the first next-gen tool for CRISPR (clustered regularly interspaced short palindromic repeats).

Beam's gene-editing tools are built on a new technique called base editing, which forces chemical reactions to change the sequence of the genetic alphabet. It also prevents double-stranded DNA breaks from occurring, mitigating the damage that would otherwise result and potentially allowing for the creation of lifelong cures for patients suffering from serious diseases.

ALSO READ: 2 Under-the-Radar Biotech Stocks You'll Wish You Didn't Ignore

Montrose Environmental Group (NYSE: MEG) provides environmental assessment, management, and remediation services with more than 4,500 customers across a range of geographic and customer end markets, including both private and government entities.

It's tapping into what's estimated to be a $1.25 trillion industry, but one that is highly fragmented. Its own niche is said to be a $395 billion opportunity, and it has established its presence through a growth-by-acquisition strategy. Over the past eight years, Montrose has acquired and integrated over 50 businesses.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

PPD (Nasdaq: PPD) is a drug research company that is involved with both Moderna (Nasdaq: MRNA) and the National Institutes of Health in developing a messenger RNA vaccine for COVID-19. Yet it has been in a strategic partnership with Moderna since 2016 to discover mRNA therapeutics to tackle a broad range of problems confronting patients.

It was recently announced that Moderna's mRNA-1273 COVID-19 vaccine helped elderly patients generate high levels of antibodies against the coronavirus, similar to those seen in younger people. The elderly are more at risk of contracting and dying from the virus than younger people are, so a vaccine, when developed, will be targeted toward these more vulnerable populations.

Shadowy data analytics firm Palantir Technologies (NYSE: PLTR) is a stock that people have been expecting to go public for years. It finally occurred last week when the company founded by venture capitalist Peter Thiel, who also founded PayPal, debuted on the New York Stock Exchange.

Unlike other IPOs, Palantir went public via a direct stock listing, which bypasses the financial institutions and lets the company, its early backers, and shareholding employees sell shares directly to the public.

Palantir counts the FBI, CIA, NSA, and other government agencies as customers, which explains its secretive nature. Its prospectus, however, revealed that about a third of its revenue came from its three biggest customers.

This stock is no shrinking violet. Snowflake (NYSE: SNOW) is a data management and storage platform that notched the largest software IPO ever. Although there was a lot of hype surrounding its public debut, it was not entirely unwarranted.

Snowflake has attracted high-profile investors, including Warren Buffett, who are attracted to the massive growth it's been experiencing. Yet that has also created a very expensive stock in a very short period of time.

As good as Snowflake's future looks, it's not a stock an investor wants to buy at any price, and keeping an eye on this one to find a more attractive entry point may be a worthy endeavor.

ALSO READ: The Worst Mistake Snowflake Investors Can Make Right Now

Rocket Companies (NYSE: RKT) is probably more familiar to most people as the parent of Quicken Loans, a mortgage finance company. Its IPO was the third largest of the year at $1.8 billion, but it could have been bigger as its investors felt it should be valued as a consumer finance stock instead of a tech company, so Rocket downsized its offering.

It is the only mortgage company with a national brand identity, and analysts view the housing market favorably for the next few years, giving its potential for even greater growth a significant boost.

Avidity Biosciences (Nasdaq: RNA) is yet another biotech that investors should keep their eye on this year. Just as ADC Therapeutics is developing antibody-drug conjugates, Avidity is also doing so, but Avidity is attaching oligonucleotides to antibodies in order to better target them to specific cells in the body.

Avidity is using a proprietary platform of oligonucleotide-based therapies called antibody oligonucleotide conjugates to develop treatments that were previously out of reach of traditional drug therapies. Its lead product candidate, AOC 1001, is designed to treat myotonic dystrophy type 1, a genetic disorder that causes progressive muscle weakness.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Investing in IPOs can often be a risky venture. While those who can get into the stock before it actually hits the market do well, that's not often the case with the average retail investor who buys in soon after.

A massive study conducted by Goldman Sachs last year found that of the near-4,500 IPOs it looked at, the median stock lagged the Russell 3000 index by 28 percentage points over the first three years.

Some stocks, though, "outperform dramatically," and investors might want to see which of these 10 IPOs could be part of that class.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends PayPal Holdings and Virgin Galactic Holdings Inc. The Motley Fool recommends Snowflake Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.