Overall, market conditions are little changed. I’d be thrilled if we got trade deals (but I&rs...
Three IPOs Better Than Twitter
11/19/2013 9:00 am EST
While Twitter has had a lot of hype, for my money, there are better long-term investments out there among the hot group of IPOs to debut in 2013, suggests Chris Preston in Daily Profit.
The sheer volume of IPOs this year has produced some true diamonds in the rough. Three in particular look like better long-term plays than Twitter.
INSYS Therapeutics (INSY) is one recent IPO that jumps out. The Arizona-based pharmaceutical company markets a synthetic marijuana drug to treat cancer pain. It went public in May at $8 per share. It opened at over $46 per share.
Despite being one the best performing IPOs of 2013, Insys is still cheap on a forward-PE basis. Shares are trading at 26-times forward earnings.
That's a bargain considering the company has no debt, grew revenues by 431% last quarter, and is expected to grow EPS by 58% in 2014.
Another thriving recent IPO is Potbelly's (PBPB). An operator of close to 300 sandwich shops throughout the US, Potbelly's shares have popped 85% since the company went public in early October.
The company has grown revenues at an average of 14% a year over the past five years—as much as seven times the restaurant industry's average 2-3% annual growth rate during that time.
Better yet, the company is expanding. Potbelly chains are popping up in places like New York and Portland, Oregon. All told, the sandwich shop plans to open 35 new locations this year, and intends to use the proceeds to help fund a dividend.
A third recent IPO that could be a strong long-term play is ExOne (XONE). ExOne supplies three-dimensional (3-D) printing machines and products to industrial customers.
A relatively new technology, 3-D printing gives companies the ability to print three-dimensional replicas of real parts taken directly from digital input.
Admittedly, ExOne is a bit of a high-risk, high-reward investment. The company isn't profitable. But 3-D printing is one of the hottest niche sectors on the market since there is soaring demand for these products.
ExOne shares are up 132% since the company went public in early February. And fellow 3-D printer 3D Systems (DDD) is up a whopping 479% since the company debuted in May 2011. Perhaps that's where ExOne is headed in the next year or two.
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