Zacks Market Edge

Should You Buy the Hot IPOs?


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Welcome to Episode #52 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Brian Bolon, editor of Zacks Stocks Under $10 and the Game Changer portfolio services to discuss the recent uptick in the IPO market.
By all accounts, IPOs have been dead in 2016. It has been the lowest number of technology IPOs since the Great Recession.
But in May and June, two hot technology companies finally went public which lit a fire under the IPO market.
Twilio and Acacia Brought the Market Back
Twilio (TWLO) and Acacia (ACIA) are both up over 300% above their IPO prices. Twilio is a cloud communications platform while Acacia makes optical chips and devices.
Twilio is not expected to be profitable in 2016 or 2017 but Acacia is making money but it’s no value. It trades with a forward P/E of 46.
Recently, enterprise cloud company Nutanix (NTNX) became the latest hot IPO, rising 178% above its IPO price in just two days. It has a market cap above $6 billion.
But it has never had a profitable quarter. It lost $126 million in fiscal 2015 and $168.5 million in fiscal 2016 even as revenue has doubled.
What do Tracey and Brian think of these IPOs? Should you get in?
What IPOs are Coming Up Soon?
1. Camping World (CWH) is Marcus Lemonis’ company that owns RV dealerships, gear and travel services. It’s profitable and grew revenue 25% from 2014 to 2015. The RV makers like Thor Industries (THO) have strong fundamentals. Camping World could be a hot one.
2. Coupa Software (COUP) is a cloud software maker expected to raise $123 million.
3. Everspin Tech (MRAM) has the magic formula of a hot stock, hot industry and low float. Big names are bringing this deal.
4. Azure (AZRE) is bringing solar power in India on long term fixed contracts.
5. AquaVenture (WAAS) builds desalination and waste water treatment solutions on long term contracts. It also offers point-of-use filtered water systems to 40,000 customers.
Which of these IPOs do Tracey and Brian like?
Which one does Brian think is a “must buy”?
Find out all of this and more on this week’s podcast.
Twilio: https://www.zacks.com/stock/quote/TWLO?cid=cs-soundcloud-ft-pod
Acaia Communications: https://www.zacks.com/stock/quote/ACIA?cid=cs-soundcloud-ft-pod
Nutanix: https://www.zacks.com/stock/quote/NTNX?cid=cs-soundcloud-ft-pod
Zillow: https://www.zacks.com/stock/quote/Z?cid=cs-soundcloud-ft-pod
Thor Industries: https://www.zacks.com/stock/quote/THO?cid=cs-soundcloud-ft-pod
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