Virgin America Leads This Week’s New Stocks

Last week was a mixed bag for new stocks. While 13 IPOs were on the calendar, only 8 deals got priced. However, some of the ones that did get through were pretty hot, such as Nevro (NVRO), up 41%, and Freshpet (FRPT), which posted a gain of 27%.

For the most part, Wall Street is fairly selective with new stocks, which means that hot deals like NVRO are pretty rare. Much more often, they stumble or sputter out of the gate. For example, one of the week’s deals, Upland (UPLD), fell a grueling 19% on its first day of trading!

As for this week, there are eight new stocks ready to go public (one additional offering, The Joint, is a holdover from last week). So let’s take a look at each:

New Stocks to Watch: Axalta Coating Systems (AXTA)

Expected Offering Date: Wednesday

Axalta Coating Systems is a top global manufacturer and marketer of high performance coatings systems. Its main focus is in the automotive refinish end-market, in which the company has a 25% global share.

During the past year, revenues came to $4.3 billion and adjusted EBITDA was $799 million. Yet the debt load is at a hefty $3.9 billion, most of which came from a leveraged buyout from the Carlyle Group (CG).

Axalta Coating Systems expects to issue 45 million shares at a range of $18 to $21. The lead underwriters include Citi (C), Goldman Sachs (GS), Deutsche Bank (DB), J.P. Morgan (JPM), Bank of America Merrill Lynch (BAC), Barclays (BCS), Credit Suisse (CS) and Morgan Stanley (MS).

New Stocks to Watch: Navios Maritime Midstream Partners (NAP)

Expected Offering Date: Thursday

Navios Maritime Midstream Partners is a limited partnership — owned by Navios Maritime Acquisition (NNA) — that owns and operates crude oil tankers. The initial fleet includes four vessels and there is an agreement in place to purchase seven more.

For the first nine months of this year, revenues flat-lined at $48 million. But there was a healthy $16.5 million in profits — up from a $4 million in the year-ago period.

Navios Maritime Midstream Partners LP plans to issue 8 million shares at a range of $19 to $21. The lead underwriters include BofA Merrill Lynch, Citi, J.P. Morgan, Credit Suisse and Wells Fargo Securities (WFC).

New Stocks to Watch: NeuroDerm (NDRM)

Expected Offering Date: Thursday

NeuroDerm is a clinical-stage biotech that is focused on developing treatments for central nervous system, or CNS, disorders. The main approach is to use formulations that are based on existing drugs, which should allow for faster approvals.

The company has several drugs in Phase 2a trials, which are targeted at moderate and severe Parkinson’s disease.

NeuroDerm plans to sell 4.5 million shares at a range of $13 to $16. The lead underwriters include Jefferies & Co. and Cowen & Company.

New Stocks to Watch: PRA Health Sciences (PRAH)

Expected Offering Date: Thursday

PRA Health Sciences is a contract research organizations, or CRO, which provides outsourced clinical services for biotech and pharma companies. The specialties include oncology, central nervous system, inflammation and infectious diseases. Since 2000, the company has performed about 2,300 clinical trials across the globe.

For the first nine months of 2014, revenues came to $1.1 billion and adjusted EBITDA was $132 million. There is also a backlog of $2.09 billion.

PRA Health Sciences expects to sell 18.6 million shares at a range of $20 to $23. The lead underwriters include Jefferies, Citi, KKR (KKR), UBS Investment Bank (UBS), Credit Suisse and Wells Fargo Securities.

New Stocks to Watch: eHi Car Services (EHIC)

Expected Offering Date: Friday

Ehi Car Services is the No. 2 car rental provider in China, with coverage in 90 cities. The company also provides services like airport pickups and drop-offs, inter-office transfers and event-driven activities such as conventions and promotional tours

Growth has certainly been robust. For the first half of this year, revenues jumped by 48% to $62 million and adjusted EBITDA came to $21 million. And yes, the momentum is likely to continue. The auto rental market in China is expected to go from $4.3 billion in 2013 to $8.2 billion by 2017.

As for the IPO, eHi Car Services intends to sell 10 million shares at a range of $12 to $14. The lead underwriters include J.P. Morgan and Goldman Sachs.

New Stocks to Watch: FibroGen (FGEN)

Expected Offering Date: Friday

FibroGen is a clinical-stage biotech company that focuses on treatments for fibrosis and hypoxia-inducible factor, or HIF.

The most advanced product candidate is roxadustat, or FG-4592, which is in Phase 3 clinical trials. The drug is targeted at anemia in chronic kidney disease, or CKD. Another advanced candidate is FG-3019, which is in Phase 2 trials. The drug is meant for the treatment of idiopathic pulmonary fibrosis, or IPF, pancreatic cancer and liver fibrosis.

FibroGen plans to offer 7.1 million shares at a range of $16 to $19. The lead underwriters include Goldman Sachs, Citi and Leerink Partners.

New Stocks to Watch: Landmark Infrastructure Partners LP (LMRK)

Expected Offering Date: Friday

Landmark Infrastructure Partners is a limited partnership that owns and manages cellular towers, rooftop wireless sites, billboards and wind turbines. Because such assets are crucial for tenants, the cash flows tend to be fairly predictable. The occupancy rate for its 701 sites is 99%.

During the first nine months of this year, revenues hit $10.6 million and adjusted EBITDA was $9.6 million. Many of the tenants include Fortune 500 companies like AT&T (T), Verizon (VZ) and T-Mobile (TMUS).

Landmark Infrastructure Partners LP expects to sell 3 million units at a range of $19 to $21. The lead underwriters include Baird, Raymond James and RBC Capital Markets.

New Stocks to Watch: Virgin America (VA)

Expected Offering Date: Friday

Virgin America is a premium-branded, low-cost airline that controls routes in the U.S. and Mexico. Of course, this is part of the empire of Sir Richard Branson, who is known for his focus on creativity and customer service. As for Virgin America, the airline has amenities like mood lighting, leather seats, touch screens and power outlets for each seat.

During the first nine months of 2014, revenues increased by 5% to $1.1 billion and adjusted EBITDA jumped by 44% to $97 million.

Virgin America plans to issue 13.3 million shares at a range of $21 to $24. The lead underwriters include Barclays and Deutsche Bank.

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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