IPO Stocks to Sell Now: Five Point Holdings (FPH)
The developer of mixed-use, master-planned residential communities in Central California, priced $14, well below its range of $18-$20. Historical data from IPO expert Jay Ritter suggests companies that file below their price range average 3% first-day returns; Five Point’s first-day return was more than double at 7.4%.
Five Point’s potential for growth is tremendous. Its three major communities when fully built will include 40,000 residential homes and 21 million square feet of commercial real estate space in the cities of Irvine, Valencia, and San Francisco. It’s no wonder that analysts are bullish about its future. However, when it comes to land development, things don’t always go as planned.
Lennar Corporation (NYSE:LEN) owns 41% of Five Point. If you live in California and believe in the potential of these three master-planned communities, you might want to buy Lennar’s stock instead because it’s making a lot of money while Five Point is still in the red.
This isn’t so much a “sell” recommendation as it is a suggestion for a safer play.