Wall Street loves a good IPO. The excitement surrounding an innovative stock trading publicly for the first time can often lead to huge price swings — both up and down. I tend to avoid the hype, and instead focus on strong IPO stocks flying under the market’s radar. Here you’ll find hidden gems with upside potential just as big as the headline-makers, but without the added baggage of media mania.
Let me tell you about my top three hot IPO stocks I am watching right now.
Hot IPO Stocks: Pinduoduo (PDD)
Pinduoduo (NASDAQ:PDD) is a $27 billion e-commerce platform based in China that focuses on group buying. It’s a young company that was founded just three years ago, but grew quickly to generate revenue of $3.1 billion over the 12 months prior to its IPO on July 26. PDD opened its first trading day at $19 and closed at $26.70. It’s had some up-and-down trading since, but recently rallied on this week’s third-quarter report.
Revenue surged a whopping 697% to $491 million, which was $52 million higher than estimates. An earnings loss of $0.08 a share was also better than the expected loss of $0.24. With renewed focus on the health of the business, PDD looks to be on the verge of a new uptrend.
Elanco Animal Health (ELAN)
Elanco Animal Health (NYSE:ELAN) was spun out of Eli Lilly (NYSE:LLY) and stands as the fourth-largest animal health company in the world. It raised $1.5 billion for its September 20 IPO. Stock shares opened the day at $24 and closed up over 50% -0 the best one-day move for a public offering over $1 billion in more than five years.
After pulling back from its first week rally, the $12 billion company is now creating an impressive base that’s setting up an attractive buying opportunity.
Evo Payments (EVOP)
Finally, there’s Evo Payments (NASDAQ:EVOP). The global merchant acquirer and payment processor began trading on May 23, finishing the day up 19% from its $16 open. Shares have been in a fairly steady uptrend ever since, and now trade at a market cap of just under $2 billion.
While the company faces some stiff competition, it’s in a growing industry. And if the action since its IPO is any indication, there is more upside in the months ahead.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.
