3 Recent IPOs Worth Considering for the Long-Term: Phillips 66 (PSX)

Page 1 of 3

Since 1975, there have been over 9,500 companies that have gone public with an initial public offering (IPO).  So what are the pros and cons of investing in IPOs, or at least relatively ‘new’ companies on the stock market?  The data shows that the percentage of returns on IPOs from 2000-2010 during the first five years after the IPO have a mean of 8.1% annual returns.  The data also shows that it is better to buy and hold IPOs as the mean returns after the 1st year is a disappointing -8.9%, versus waiting until the 4th year to see year-four returns of 29.2%.  Despite these positives, there are 2 facts to consider.  First, for better (mergers or acquisitions) or worse (bankruptcy), many IPOs wind up vanishing within 5 years.  Second, IPOs generally have underperformed other established firms of the same size by an average of 3.3% per year during the five years after the IPO.

Carlyle Group LP (NASDAQ:CG)

If you are thinking about investing in food services, waste management, aerospace and defense, finance and insurance, health care and social assistance, manufacturing, technical services, retail trade, energy and power, telecommunications, media, or other industries, you might want to consider letting Carlyle Group LP (NASDAQ:CG) take care of that for you instead.  Carlyle is one of the world’s largest global asset management firms that originates, structures, and acts as lead equity investor in management-led buyouts, strategic minority equity investments, consolidations and buildups, bank loans, high-yield debt, and many other investment opportunities.  In short, Carlyle makes money by investing money into companies with growth potential and gains control with the end goal of making much more back in ‘leveraged buy outs’ (LBO), interest, and management fees.

Since its IPO last May, Carlyle has seen over 43% returns in share price, including its 2% dividend.  Based on the most recent earnings report, net revenues were $858.5 million for the three months ended Sept. 30, 2012, which was an increase out of the red by $918.1 million from the same period in 2011.  What is important to realize is that while revenues has been going up primarily due to performance fees, profit margins from quarter to quarter fluctuate a lot more than your typically traded company.  It isn’t uncommon based on their history for Carlyle to see net profit margins over 50%.  However, due to the business model, the company relies heavily on making the correct investments each and every time and making sure the companies they invest in are able to produce a return for Carlyle’s bottom line.

Carlyle is currently behind TPG Capital and Goldman Sachs Capital Partners for title of world’s largest private equity firm in terms of capital raised.  Keep in mind the word ‘private’ isn’t there by mistake.  Many of the equity securities within Carlyle’s portfolio consist of companies you may never have heard of and they are not publicly traded.  With little information for the average person to gain an understanding of what to expect in returns from owning Carlyle stock, this may be a drawback for information-hungry investors.

CG Total Return Price data by YCharts

Phillips 66 (NYSE:PSX)

A spin off of ConocoPhillips, Phillips 66 (NYSE:PSX) currently has seen over 86% share price returns that include its 1.6% dividend that has already increased 25% since its IPO last May.  The holding company operates in 3 segments: Refining and Marketing (R&M), Midstream, and Chemicals segments, which cover the transport of crude oil and petroleum products, power generation operations, natural gas transport, petrochemicals, and plastics.

Page 1 of 3

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!