If you’re on the lookout for interesting new investment opportunities, we’ve compiled a list of the 11 best new company stocks to buy in 2017.
Whether through IPOs or spinoffs, the appearance of new stocks on the market often leads to a great deal of excitement among investors. Whereas it’s hard to get very excited about a stock that’s already been trading for 50 years, a new stock has a clean slate and boundless potential; or at least that’s the perception.
However, that perception can be faulty, as companies now appear to be more adept at pricing their public offerings closer to the stock’s actual value in the eyes of market participants. 2016 was a bleak one for IPOs in particular, 119 of which collected just $18.5 billion in proceeds and had returned just 0.9% through December 12, well below the returns of the major indices.
However, there were a few standout performers. Acacia Communications, Inc. (NASDAQ:ACIA), AveXis Inc (NASDAQ:AVXS), Novan Inc (NASDAQ:NOVN), IMPINJ Inc (NASDAQ:PI), and Twilio Inc (NYSE:TWLO) all gained more than 100% in 2016 through December 12. Ichor Holdings Ltd (NASDAQ:ICHR), which had a late-2016 IPO has also been a huge performer, with lifetime gains of 135%.
At Insider Monkey, we routinely monitor and report on hedge fund activity when it comes to IPOs to try and give our readers a leg up on the competition. We track over 700 of the most successful hedge funds ever in our database and identify only their best stock picks. Our flagship strategy has gained 44% since February 2016 and our stock picks released in the middle of February 2017 gained over 5 percentage points in the three months that followed. Our latest stock picks were released last month, which investors can gain access to by becoming a subscriber to Insider Monkey’s premium newsletters.
Turning to hedge funds is particularly relevant in the case of new stocks, in which there is often limited information available for investors to make trading decisions. These stocks have a small history of trading activity with which to make determinations based on technical aspects, while information on their financial results is often limited as well, making it challenging to judge just how fast a company is growing. Hedge funds however have more in-depth information on these companies than just about anyone, which allows them to better judge a company’s worth.
In this article, we’ll use hedge fund sentiment to gauge the investment opportunities in the batch of new stocks to hit the market during the first quarter of this year, using 13F filings for the March 31 reporting period to identify how many top hedge funds were investors of each new stock. Check out the list of the 11 best new company stocks to buy in 2017 beginning on the next page. Note that Welbilt Inc (NYSE:WBT) was not considered a new stock, as it simply changed its name (from Manitowoc).
For some other great investment ideas, don’t miss our article on the 11 best food company stocks to buy now.