11 New Stocks to Watch – Biotech, Energy Deals Aplenty

by Tom Taulli | June 16, 2014 1:02 pm

Last week, the IPO market showed signs that it’s getting its footing back, with seven new stocks hitting the market. Some of the more notable deals included MobileIron (MOBL[1]), which increased 22% on its first of trading, and Abengoa Yield (ABY[2]), which shot up 27%.

IPO initial public offering 3 Promo 11 New Stocks to Watch   Biotech, Energy Deals Aplenty[3]
Source: ©iStock.com/pichet_w

As for the upcoming week, expect the volume to be turned up even more as 11 new stocks should hit the markets — many of them from the biotech and energy sectors.

Here’s a quick look at 11 new stocks to watch this week.

New Stocks to Watch: Ardelyx (ARDX)

Expected Offering Date: Thursday

Ardelyx (ARDX) is a clinical-stage biotech company that is focused on non-systemic, small-molecule therapeutics that work on the gastrointestinal tract. Ardelyx’s goal is to battle cardio-renal and metabolic diseases.

ARDX’s lead candidate is tenapanor, which is in Phase 2 clinical trials. In fact, back in 2012, Ardelyx entered a collaboration agreement with AstraZeneca (AZN[4]) for the worldwide development and commercialization of the drug.

Ardelyx plans to offer 3.6 million shares on the Nasdaq under the ticker “ARDX” at a range of $13 to $15 . Lead underwriters include Citi (C[5]) and Leerink Partners.

New Stocks to Watch: Century Communities (CCS)

Expected Offering Date: Wednesday

Century Communities (CCS) is a homebuilder that has projects in major metropolitan markets in Colorado, Texas and Nevada. The company owns and controls about 99 communities containing 10,095 lots. Century generally completes a project within 24 to 36 months, which helps cut down on risk.

Last year, CCS delivered 448 homes, generating revenues of $171.1 million that were up more than 78% on a year-over-year basis. Keep in mind that it has been profitable since 2008.

Century expects to offer 4.5 million shares on the New York Stock Exchange under the ticker “CCS” at a range of $23 to $26. Lead underwriters include FBR Capital Markets, JPMorgan (JPM[6]) and Deutsche Bank (DB[7]).

New Stocks to Watch: Eclipse Resources (ECR)

Expected Offering Date: Friday

Eclipse Resources (ECR) is an independent exploration and production company that controls oil and natural gas properties in the Appalachian Basin. In all, the company has a position of about 227,230 net acres, about 96,240 of which are located in what is believed to be the most productive area, the Utica Shale fairway.

In the first quarter, revenues came to $24.8 million. However, there was also a loss of nearly $12 million.

Eclipse Resources plans to issue 30.3 million shares on the NYSE under the ticker “ECR” at a range of $27 to $30. The lead underwriters include Citi, Goldman Sachs (GS[8]), Morgan Stanley (MS[9]), Barclays (BCS[10]), BMO Capital Markets (BMO[11]), Deutsche Bank, KeyBanc Capital Markets and RBC Capital Markets (RBC[12]).

New Stocks to Watch: Foresight Energy (FELP)

Expected Offering Date: Wednesday

Foresight Energy (FELP) says it is the lowest-cost and highest-margin bituminous thermal coal producer in the U.S. Foresight’s business is based in the Illinois Basin, which has proven to be a highly favorable place for such coal producers. FELP also has invested $2 billion to develop its core infrastructure.

From 2011 to 2013, revenues went from $500.8 million to $957.4 million while adjusted EBITDA ramped up from $192.4 million to $364.7 million. Meanwhile, Foresight Energy has reserves of more than 3 billion tons of coal.

Foresight Energy plans to issue 17.5 million shares on the NYSE under the ticker “FELP” at a range of $19 to $21. Lead underwriters include Barclays, Citi, Morgan Stanley, JPMorgan, Goldman Sachs and Deutsche Bank.

New Stocks to Watch: Kite Pharma (KITE)

Expected Offering Date: Friday

Kite Pharma (KITE) is a biotech company that is developing cancer products that leverages the power of a patient’s own immune system. To do this, Kite has developed a unique approach for cell therapy that focuses on modifying T cells. The lead candidate is currently in Phase 2 trials.

Kite Pharma plans to sell 6 million shares on the Nasdaq under the ticker “KITE” at a range of $12 to $14. Lead underwriters include Jefferies, Credit Suisse (CS[13]) and Cowen & Company.

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New Stocks to Watch: Markit (MRKT)

Expected Offering Date: Thursday

Markit (MRKT) is a global provider of premium financial information, such as pricings of alternative assets, indices and valuations. Markit offers services for trade processing.

From 2011 to 2013, revenues grew from $762.5 million to $947.9 and EBITDA increased from $305 million to $421.3. There are over 3,000 institutional customers.

Markit plans to issue 45.7 million shares on the Nasdaq under the ticker “MRKT” at a range of $23 to $25. The lead underwriters include BofA Merrill Lynch (BAC[14]), Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC (HBC[15]), JPMorgan, Morgan Stanley, UBS Investment Bank (UBS[16]), BNP Paribas, Jefferies, RBC Capital Markets, RBS and TD Securities (TD[17]).

New Stocks to Watch: Parnell Pharmaceuticals Holdings (PARN)

Expected Offering Date: Wednesday

Parnell Pharmaceuticals Holdings (PARN) develops animal health solutions, including lead products estroPLAN and GONAbreed, which help with cattle breeding. Parnell also has software that helps with the administration of the drugs.

However, PARN is still fairly small, posting revenues of just $4.3 million for the nine months ended March 31, 2014, and a substantial loss of $6.3 million.

Parnell expects to sell 3.6 million shares on the Nasdaq under the ticker “PARN” at a range of $17 to $19. The lead underwriters include Jefferies and Piper Jaffray (PJC[18]).

New Stocks to Watch: Syndax Pharmaceuticals (SNDX)

Expected Offering Date: Thursday

Syndax Pharmaceuticals’ (SNDX) lead product is entinostat, which is a therapy for treatment-resistant cancers. The drug is now in Phase 3 trials.

The drug’s current application is for metastatic breast cancer, but Syndax thinks there are is broader potential for entinostat; for example, SNDX is pursuing earlier-stage trials for lung cancer.

The company plans to issue 4.3 million shares on the Nasdaq under the ticker “SNDX” at a range of $13 to $15. Lead underwriters include Deutsche Bank and Jefferies.

New Stocks to Watch: Viper Energy Partners (VNOM)

Expected Offering Date: Wednesday

Viper Energy Partners (VNOM) is a limited partnership that is focused on oil and natural gas exploration. Viper’s main are in the Permian Basin in West Texas, which has been a significant source of oil since the 1920s. And because of fracking and horizontal drilling, the area has seen rampant growth over the past few decades.

More recently Viper booked Q1 2014 revenues of $15.9 million, which translated into earnings of $3.9 million.

Viper Energy Partners plans to issue 5 million shares on the Nasdaq under the ticker “VNOM” at a range of $19 to $21. Lead underwriters include Barclays, Credit Suisse and Wells Fargo Securities (WFC[19]).

New Stocks to Watch: Zafgen (ZFGN)

Expected Offering Date: Thursday

Zafgen (ZFGN) is a clinical-stage biotech company that is developing drugs to treat obesity. Its lead candidate, Beloranib, includes a twice-weekly subcutaneous injection, and currently is in Phase 2a clinical trials.

The drug is meant to treat a severe form of obesity, called Prader-Willi Syndrome, or PWS. Often, the disease is diagnosed for early teens. However, Zafgen believes its medical technology could be beneficial for obesity for the general population.

Zafgen plans to issue 5 million shares on the Nasdaq under the ticker “ZFGN” at a range of $14 to $16. Lead underwriters include Leerink Partners and Cowen & Company.

New Stocks to Watch: ZS Pharma (ZSPH)

Expected Offering Date: Wednesday

ZS Pharma (ZSPH) is a biotech company focused on creating non-absorbed drugs to treat renal, cardiovascular, liver and metabolic diseases. At the core is a proprietary zirconium silicate technology used to create ion traps that can reduce toxicity in targeted electrolytes.

The lead candidate, ZS-9, is in Phase III trials testing its efficacy on patients with hyperkalemia, a life-threatening disease where potassium reaches elevated levels.

ZS Pharma expects to issue 5 million shares on the Nasdaq under the ticker ZSPH at a range of $15 to $17. Lead underwriters include JPMorgan and Credit Suisse.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. MOBL: /stock-quotes/MOBL-stock-quote/
  2. ABY: /stock-quotes/ABY-stock-quote/
  3. [Image]: http://investorplace.com/wp-content/uploads/2014/06/IPO-initial-public-offering-3-Promo.jpg
  4. AZN: /stock-quotes/AZN-stock-quote/
  5. C: /stock-quotes/C-stock-quote/
  6. JPM: /stock-quotes/JPM-stock-quote/
  7. DB: /stock-quotes/DB-stock-quote/
  8. GS: /stock-quotes/GS-stock-quote/
  9. MS: /stock-quotes/MS-stock-quote/
  10. BCS: /stock-quotes/BCS-stock-quote/
  11. BMO: /stock-quotes/BMO-stock-quote/
  12. RBC: /stock-quotes/RBC-stock-quote/
  13. CS: /stock-quotes/CS-stock-quote/
  14. BAC: /stock-quotes/BAC-stock-quote/
  15. HBC: /stock-quotes/HBC-stock-quote/
  16. UBS: /stock-quotes/UBS-stock-quote/
  17. TD: /stock-quotes/TD-stock-quote/
  18. PJC: /stock-quotes/PJC-stock-quote/
  19. WFC: /stock-quotes/WFC-stock-quote/

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