10 New Stocks to Watch: Lending Club, Tech Lead the Way

It’s the final stretch for the IPO market for 2014, with just a couple more weeks of new offerings before things slow down for the holidays. Right now, though, things are fast, with 10 new stocks poised to come public this week.

new stocks to watch lending clubSix of the new stocks are tech operators, but there are some notable no-shows, too — namely, there are no biotech or energy deals on the calendar, which isn’t too surprising as both groups have been under lots of pressure lately.

Let’s take a look at this week’s new deals:

New Stocks to Watch: LendingClub (LC)

Expected Offering Date: Thursday

LendingClub operates a leading peer-to-peer lending marketplace where borrowers list their loans and lenders then place bids on them. To pull this off, LendingClub has built a highly automated underwriting system.

For the first nine months of this year, loan originations surged from $1.4 billion to $3 billion and revenues jumped by 122% to $143 million. But the company continues to lose money. For this year, the net loss was $23.9 million (I recently wrote up an analysis on the IPO).

The Lending Club plans to sell 57.7 million shares on the New York Stock Exchange under the ticker “LC” at a range of $12 to $14. The lead underwriters are Morgan Stanley (MS), Goldman Sachs (GS), Credit Suisse (CS) and Citigroup (C).

New Stocks to Watch: Polar Star Realty Trust (PSRT)

Expected Offering Date: Thursday

Polar Star Realty Trust owns, operates and leases office and industrial properties primarily in Norway, Sweden and Denmark. The portfolio includes 26 properties, with a total of 7.2 million leasable square feet. The vacancy is only 5.4% and the average contract length is 5.8 years.

For the first nine months of this years, the company generated revenues of $90 million and funds from operations came to $46.7 million.

Polar Star Realty Trust expects to issue 43.5 million shares on the NYSE under the ticker “PRST” at a range of $10 to $13. Underwriters include FBR Capital Markets and Wunderlich Securities.

New Stocks to Watch: Avolon Holdings (AVOL)

Expected Offering Date: Friday

Avolon Holdings is a global aircraft leasing operator with a portfolio of 227 planes sporting a net value of $5.3 billion and an average age of 2.5 years. The main models include Airbus A320s and Boeing (BA) 737-800s.

For the first nine months of 2014, revenues came to $433.3 million, up from $325.7 million in the same period a year ago. During this time, net income increased from $93.2 million to $104.2 million.

Avolon Holdings expects to sell 13.6 million shares on the NYSE under the ticker “AVOL” at a range of $21 to $23. Lead underwriters are JPMorgan Chase & Co. (JPM), Morgan Stanley, Citi, UBS AG (OUBS) and Wells Fargo & Co (WFC).

New Stocks to Watch: Connecture (CNXR)

Expected Offering Date: Friday

Connecture operates a web-based marketplace for health insurance for brokers and health plans. In all, the platform manages 20 millions lives and $130 billion in annual plan premiums. A key focus is on Medicare.

For the first nine months of this year, revenues increased from $33.4 million to $56.8 million and the net loss fell from $27 million to $15 million.

Connecture plans to issue 5.8 million shares on the Nasdaq under the ticker “CNXR” at a range of $12 to $14. Lead underwriters include Morgan Stanley and JPMorgan.

New Stocks to Watch: Hortonworks (HDP)

Expected Offering Date: Friday

Hortonworks uses a technology called Hadoop that allows for processing huge amounts of data. The company has 292 customers, which include large operators like Hewlett-Packard (HPQ), Microsoft (MSFT) and SAP (SAP).

Growth has been robust. For the first nine months of this year, revenues surged from $15.9 million to $33.4 million. However, losses have remained substantial, totaling $86.7 million for the current year.

Hortonworks plans to issue 6 million shares on the Nasdaq under the ticker “HDP” at a range of $12 to $14. The lead underwriters include Goldman Sachs, Credit Suisse and Royal Bank of Canada (RY).

New Stocks to Watch: James River Group Holdings (JRVR)

Expected Offering Date: Friday

James River Group Holdings is a reinsurance company that primarily focuses on the U.S. casualty market. Back in December 2007, the company went private in a transaction that included Goldman Sachs and D.E. Shaw, but now is coming public again.

For the first nine months of 2014, gross written premiums came to $415.6 million, up from $284.4 million in the same period a year ago. Although, during this period the net income fell from $49.3 million to $35.8 million.

James River Group Holdings plans to sell 11 million shares on the Nasdaq under the ticker “JRVR” at a range of $22 to $24. The lead underwriters include Keefe Bruyette Woods, UBS Investment Bank, FBR Capital Markets and Bank of Montreal (BMO).

New Stocks to Watch: Metaldyne Performance Group (MPG)

Expected Offering Date: Friday

Metaldyne Performance Group manufactures components used in powertrain and safety-critical platforms for the global light, commercial and industrial vehicle markets. In fact, at least one of its components is found in about 90% of the 16.2 million vehicles built in North America last year.

For the first nine months of 2014, revenues increased from $2.3 billion to $2.4 billion and adjusted EBITDA grew from $380.2 million to $419.2 million. Some of the company’s largest customers include Ford Motor Company (F), General Motors Company (GM) and TRW Automotive Holdings Corp. (TRW).

Metaldyne Performance Group expect to sell 15.4 million shares at a range of $18 to $21. The lead underwriters include Bank of America Corp (BAC), Goldman Sachs, Deutsche Bank (DB), Barclays (BCS), Credit Suisse and RBC Capital Markets.

New Stocks to Watch: Momo (MOMO)

Expected Offering Date: Friday

Momo operates a mobile app that allows users to chat and share photos and videos with people that are nearby, with a primary business model of selling subscriptions.

Growth has been strong — or the year ended Sept. 30, 2014, the number of registered users soared by 160.8% to 180.3 million — but the company also has had success with monetization. For the first nine months of 2014, revenues hit $26.2 million, up from $800,000 in the same period a year ago. The downside: Momo is eating a net loss of $22.9 million for the current year.

Momo plans to issue 16 million shares on the Nasdaq under the ticker “MOMO” at a range of $12.50 to $14.50. The lead underwriters include Morgan Stanley, Credit Suisse, JPMorgan and China Renaissance. Alibaba (BABA) also plans to purchase $50 million of the offering.

New Stocks to Watch: New Relic (NEWR)

Expected Offering Date: Friday

New Relic builds tools that help companies develop better software. The cloud-based system stores and analyzes over 690 billion data points on a daily basis.

For the first months ended Sept. 30, 2014, revenues came to $48 million, up from $26.1 million in the same period a year ago, but NEWR also has lost $19.4 million this year.

New Relic expects to sell 5 million shares on the NYSE under the ticker “NEWR” at a range of $18 to $20. The lead underwriters include Morgan Stanley and JPMorgan.

New Stocks to Watch: Workiva (WK)

Expected Offering Date: Friday

Workiva operates a cloud platform that allows enterprises to collaboratively collect, manage, report and analyze critical business data in real time. The applications include word processing, spreadsheets and presentations apps.

Workiva’s customers include Boeing Co (BA), Wal-Mart Stores, Inc. (WMT) and JPMorgan, which helped to drive revenue growth of 34.1% to $82.6 million in the first nine months of this year. However, Workiva suffered a net loss of $28.4 million.

Workiva plans to sell 7.2 million shares on the NYSE under the ticker “WK” at a range of $13 to $15. The lead underwriters include Morgan Stanley 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.


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