The U.S. has seen 95 IPOs through July 25. In 2018, there was a total of 192 IPO stocks. Except for 2016, 2019 could be the worse year for IPOs since 2012.
The most successful IPO so far in 2019 is Beyond Meat (NYSE:BYND), which is up 712% since going public May 1. Aside from Beyond Meat, a lot of the big IPOs in 2019 have been tech unicorns looking to provide long-time investors with an exit.
It would be great if more of the upcoming IPOs weren’t tech stocks but rather companies whose products most people can understand.
There are a lot of private companies in America that would garner plenty of interest were they to sell shares to the public.
Will it happen? Unlikely.
Although we’re unlikely to see most of the 10 IPO stocks on this list go public, it’s fun to consider the names of companies that should.
IPO Stocks I’d Buy: Impossible Foods
After the success of Beyond Meat, IPO investors are salivating over the idea of Impossible Foods taking the plunge and selling its shares to the public.
In May, Impossible Foods raised $300 million, putting the California maker of plant-based foods, including the Impossible Burger, in a better position to go public.
In 2019, Burger King started selling the Impossible Whopper, and Qdoba is rolling out the Impossible Burger at every one of its locations across the country.
As a result of its latest funding, Impossible Foods is valued at $2 billion. The company’s mission is to reduce the consumption of meat on the planet, not to cater to vegans and vegetarians.
When you consider how much bigger the Flexitarian market is than either the vegan or vegetarian lifestyle, Impossible Foods ought to be a hit with investors once it decides to do its own IPO.
Founded by Frank Mars in 1911, the family-owned company now generates $35 billion in annual revenue with plans to grow sales to $70 billion by 2029, through a combination of organic sales and acquisitions.
Speaking of acquisitions, Mars’ latest purchase is Foodspring, a German company that specializes in direct-to-consumer sports nutrition, providing its customers with protein shakes, supplements, bars, and porridge.
Mars Edge, the company’s wellness and nutrition unit, is buying the startup so it can build another huge operating business over time.
The six-year-old company is part of a fast-growing personalized nutrition market, which is estimated to be a $25 billion industry and growing sales by 9% per year. Foodspring’s two founders will continue to run the business from its Berlin offices.
With the development of wellness and nutrition, Mars will have four strong operating units, building a solid foundation for future growth.
Mars has a four-legged stool that should deliver ongoing profits for the Mars family for decades to come. It would be nice to share in that growth as an IPO stock, but it’s unlikely the family has any desire to be a public company.
Although you might not be familiar with S.C. Johnson & Son Inc., the Wisconsin-based family-owned consumer brand business, you likely know many of their products.
A quick look at its list of brands shows that I have used at least 18 of them over the years. I continue to use Windex, Pledge, and Shout to this day; I’m not sure about the rest.
Needless to say, it’s a big company with annual revenues of approximately $10.3 billion as of June 30, 2017, the most recent number available.
S.C. Johnson has been led by a Johnson family member for five generations. Today, CEO Fisk Johnson runs the business. He joined the company in 1987 and has been in the top job since 2000.
I’d like to see this company go public as an IPO stock because family-controlled businesses can do well despite being under the spotlight of quarterly reports.
I first became familiar with Fidelity Investments in 1989 thanks to the best-selling investment book, One Up on Wall Street, written by star portfolio manager Peter Lynch, the manager of the Fidelity Magellan fund from 1977 to 1990.
Lynch managed to grow the fund 29% a year during his tenure, putting Fidelity on the map. Since then, it has grown to become one of America’s biggest financial services companies with $2.8 trillion under management and another $4.9 billion under administration.
Edward Johnson II founded the Boston-based company in 1946. It’s now run by Johnson’s granddaughter Abigail, who owns 24.5% of the company and is worth an estimated $15.6 billion.
While Vanguard has taken a big chunk of the low-cost index fund business, Fidelity appears to be fighting back.
On July 16, it announced the addition of five new index funds. Four of the five index funds charge a management expense ratio of just 0.05% while the fifth fund costs 0.07%. The four funds that charge 0.05% are focused on small-cap and mid-cap stocks. All five are said to be cheaper than the comparable Vanguard funds.
Helping more than 30 million people invest, a Fidelity IPO would be well received by institutions.
Southern Glazer’s Wine and Spirits
Of all the names on my list of IPO stocks I’d like to see, Southern Glazer’s Wine and Spirits is likely one of the least familiar to most investors.
Another of the family-owned businesses on my list, the company is one of the largest distributors of alcoholic beverages in the United States.
SGWS was started in 1909 by Louis Glazer, who distributed soda water in Dallas. After prohibition in 1933, Glazer’s sons started Glazer’s Wholesale Distributors, getting the Schlitz Beer distribution contract for the Dallas area.
Fast forward to 2016.
The country’s largest distributor of alcoholic beverages, Southern Wine & Spirits, merged with Glazer’s, the fourth-largest distributor of alcohol in the U.S. Although they called it a combination, not an acquisition, Southern’s revenues at the time were three times those of Glazer’s; so, call it what you will, Southern bought Glazer’s.
Today, with more than $18 billion in annual revenue and operations in 44 states, Canada, and the Caribbean, it is easily North America’s largest distributor of alcohol.
In 2018, the company’s subsidiary, Great North Distributors Inc., became Aprhria’s (NYSE:APHA) cannabis sales representative in the Canadian market. Southern Glazer’s distribution experience should help Aphria grow its Canadian cannabis business.
Until SGWS goes public, Aphria’s stock is your best bet.
Based in Wawa, Pennsylvania, Wawa Inc. generated $10.6 billion in 2017, according to Forbes’ list of America’s largest companies. The operator of convenience stores in six states including Pennsylvania is a coveted asset I’m sure Alimentation Couche-Tard (OTCMKTS:ANCUF), one of the world’s largest owners of convenience stores (Circle K), would love to buy.
Barring a deal with Couche-Tard, I would love to see Wawa go public because aside from Casey’s General Stores (NASDAQ:CASY), there isn’t another option.
In business since 1964, the family-owned company has been run by a non-family member for more than a decade after then-CEO Dick Wood — Wawa was founded by Grahame Wood, Dick’s first cousin — decided to hand off the business to someone other than a family member.
It was the right call.
Current CEO Chris Gheysens has brought the convenience store chain into the modern age using technology to drive sales. As it moves more upmarket, the company’s ownership structure — it’s 41% owned by employees — will allow it to continue making the changes necessary to keep growing in a competitive market.
The biggest reason you won’t see Wawa go public as an IPO stock: Dick Wood, who’s chairman, believes it wouldn’t be able to make the long-term decisions necessary to grow its business.
He’s probably right, but it would be nice to see just the same.
It might not be the largest grocery store chain in the country, but it is one of the best places to work.
In February, Wegman’s Food Markets was named by Great Places to Work and Fortune as one of the 100 best companies to work for in America. The list has been put out every year since 1998. Wegman’s has made the list for 22 consecutive years; on this year’s list; it ranked third.
“There is nothing more important to us than being a great place to work for all,” said President & CEO Colleen Wegman. “The values we share across our company, starting with caring and high standards, are the foundation, and our customers appreciate our people for demonstrating those values. We are so grateful to our employees and continue to make the commitment that Everyday You Get Our Best.”
It’s not often you see a woman running a 103-year-old grocery store chain that generates almost $9 billion in annual revenue, but that’s where CEO Colleen Wegman finds herself.
One of the best indicators of future stock performance, in my opinion, is the presence of an excellent corporate culture. Wegman’s has got it and then some.
For most consumers, the name Kohler rings a bell because of their kitchen and bath products. However, if you’re a golf fan, Kohler Co. is all about hospitality and real estate.
I first became familiar with Kohler when the 2004 PGA Championship was held at the company’s Whistling Straits golf course in Sheboygan, Wisconsin. In 2020, the Ryder Cup is scheduled to be played at the course. It should make for spectacular TV golf.
Anyway, the company’s hospitality business could be a public company of its own, with a bunch of different assets including ownership of the Old Course Hotel Golf Resort, home to St. Andrews, where the British Open has been played on many occasions.
In addition to hospitality and kitchens & baths, Kohler also owns several furniture brands and is involved in power generation through its global power group.
With annual revenues of $7 billion, it would be fun, not to mention profitable, to own a small slice of a diversified portfolio of assets, many with a storied past.
As a native of Toronto, I couldn’t help but love the shoe company’s billboard ad of Kawhi Leonard it put up in Oakland during the NBA Championships. The King of the North indeed.
As Leonard goes on to further greatness with the Los Angeles Clippers, one can only imagine the amount of positive PR New Balance will receive from the star basketball player’s endorsement.
Although New Balance doesn’t manufacture all of its shoes in the U.S., the fact that it’s spending $33 million on a new shoe factory in the Boston area is excellent news. The “factory of the future” will be the sixth in the Boston region and the first in two decades.
The 80,000 square foot factory will employ 60 people and will act as a research facility to create the next great sneaker.
Jim Davis bought a small shoemaker in 1972 and turned that into New Balance. Today, Davis is worth $5.7 billion and continues to make a significant contribution to the New England economy.
This year marks the 190th anniversary of D.G. Yuengling & Sons. To celebrate this achievement, it has held festivities throughout the year.
On June 25, the company launched new packaging for three of its beers: Yuengling Premium, Yuengling Premium Light, and Yuengling Lord Chesterfield Ale. In 2017, the brewery revamped the packaging for its popular Yuengling Lager, the first rebranding in more than three decades.
The brewery has been in the Yuengling family for six generations.
However, if not for the costly investments made by Dick Yuengling, Jr., who took over in 1985, the brewery might not have made it to another generation of ownership.
“We have that long history of perseverance and being in the brewing business for 190 years … That’s the story that no other brewery in this country and I would venture to say not too many businesses in our country are able to say,” Jennifer Yuengling, who will take over the company along with her three sisters once their father retires as President and CEO, said in June.
How many 190-year-old companies do you think trade on either the NYSE or NASDAQ?
As family-owned businesses go, Yuengling holds a special place in the hearts of Pennsylvanians everywhere. It would make a great addition to IPO stocks.
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.