8 New Stocks to Watch: Zendesk on Deck

The Zendesk IPO will test whether investors are still interested in cloud deals

   

Last week, the market for new stocks showed signs of life. Although, much of the strength was for low-risk, dividend-paying operators like PBF Logistics (PBFX) and GasLog (GLOG).

Zendesk1 300x213 8 New Stocks to Watch: Zendesk on DeckBut will the growth companies get back on track too? Well, we should find out soon. This week, cloud company Zendesk will launch its IPO — and the deal will certainly be a good barometer for Wall Street’s tolerance for riskier investments.

Actually, the week will be quite busy, with eight new stocks on tap. So let’s take a look at each:

New Stocks to Watch: Bankwell Financial Group (BWFG)

Expected Offering Date: Wednesday

Bankwell Financial Group (BWFG) is based in Fairfield County, Conn. According to a report from the U.S. Department of Commerce Bureau of Economic Analysis, the location is the second-wealthiest metropolitan statistical area in the U.S.

Bankwell has about $779.6 million in assets, up from only $247 million in 2008. In other words, the compound annual growth rate has been an impressive 26%.

Bankwell plans to issue 2.2 million shares at a range of $21 to $24. The lead underwriters include Sandler O’Neill and Keefe Bruyette Woods.

New Stocks to Watch: Jumei International (JMEI)

Expected Offering Date: Friday

Founded in 2010, Jumei International (JMEI) has quickly turned into the top ecommerce company for beauty products in China, with about 22% of the market. Jumei managed to do this after raised a mere $13 million in private capital.

During the past three years, revenues have soared from $21.8 million to $233.2 million. The company posted net income of $25 million in 2013, while operating cash flows came to a juicy $84.8 million. In all, the company has 10.5 million active customers.

Jumei expects to issue 9.5 million shares at a range of $19.50 to $21.50. The lead underwriters include Goldman Sachs (GS), Credit Suisse (CS) and JP Morgan (JPM).

New Stocks to Watch: ServisFirst Bancshares (SFBS)

Expected Offering Date: Thursday

ServisFirst Bancshares (SFBS) has 12 full-service branches in Alabama, Florida and Tennessee. The firm has a solid balance sheet, with $3.6 billion in assets and $312 million in shareholder’s equity.

And yes, profitability has been healthy. For the first quarter, net income was $11.8 million, up from $9.3 million in the same period a year ago.

ServisFirst expects to issue 625,000 shares at a range of $91 to $93. The lead underwriters include Sandler O’Neill and Raymond James.

New Stocks to Watch: TrueCar (TRUE)

Expected Offering Date: Friday

TrueCar (TRUE) operates a website that allows consumers to shop for cars. A key part of the strategy has been to private-label the site for affinity group marketing partners, such as USAA, Consumer Reports and Verizon (VZ).

In 2013, revenues hit $134 million, up from $80 million in the same period a year earlier. Although, the company continues to lose money. In 2013, the net loss was $25.1 million.

TrueCar plans to issue 7.8 million shares at a range of $12 to $14. The lead underwriters include Goldman Sachs, JP Morgan and RBC Capital Markets.

New Stocks to Watch: Zendesk (ZEN)

Expected Offering Date: Thursday

Zendesk (ZEN) operates a cloud platform that allows for the management of customer support. It is a full-blown suite that covers touchpoints like email, chat, voice, social media and websites.

From 2012 to 2013, revenues jumped from $38.2 million to $72 million. But the company has lost money for each of these years, with 2013’s loss coming to $10.3 million.

Zendesk expectes to sell 11.1 million shares at a range of $8 to $10. The lead underwriters include Goldman Sachs, Morgan Stanley (MS) and Credit Suisse.

New Stocks to Watch: ECM Energy Services (ECME)

Expected Offering Date: Thursday

ECM Energy (ECME) is an energy services company that’s focused on natural gas and oil field equipment rentals, water logistics and pilot car services. Some of the target markets include Utica shale and Marcellus shale, the Mississippian Lime formation, the Eagle Ford shale, and the Permian shale.

Last year, revenues hit $33.1 million, up from $15 million in 2012. During that period, the net loss dropped from $2.1 million to $400,000.

ECM Energy plans to offer 2.5 million shares at a range of $7 to $9. The lead underwriter is Maxim Group.

New Stocks to Watch: Tecogen (TGEN)

Expected Offering Date: Thursday

Tecogen (TGEN) designs, sells and services systems that help produce electricity, hot water and air conditioning for commercial buildings. They are all powered by natural gas engines, electricity generators or compressors. Also, since the systems capture waste heat, they tend to be more energy efficient.

However, revenues were flat last year, at $15.8 million. There was also a net loss of $3.4 million, up from $1.6 million in 2012.

Tecogen expects to offer 2 million shares at a range of $4.75 to $5.75. The lead underwriters is Scarsdale Equities.

New Stocks to Watch: SD Drilling (SDPI)

Expected Offering Date: Thursday

SD Drilling (SDPI) develops sophisticated drill bits for horizontal drilling, which are critical for shale exploration and production. In fact, with the IPO, SD Drilling will complete the acquisition of Hard Rock Solutions, which designs a dual-section reaming tool.

Even on a combined basis, the company is still fairly small. Last year, pro-forma revenues were $17.6 million, and net income was $122,000.

SD Drilling plans to sell 5 million shares at a range of $5 to $7. The lead underwriter is Roth Capital.

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.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/new-stocks-to-watch-zendesk/.

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