In this piece, we will take a look at the twelve best stocks that have recently had their initial public offering.
IPO activity in the United States has slowed down this year, with a report from Factset outlining that during the first half of this year, just 92 companies listed their shares for sale on the stock market, a massive drop over the 1073 firms that had done so for the entirety of last year. In the case of 2022, these firms have raised a rather paltry $9 billion in funds, when compared to the $317 billion raised in 2021.
The reason behind this drop is a reduction in interest in special purpose acquisition companies (SPACs), which piqued retail investor attention due to the hefty returns offered. However, as money from stimulus checks stopped and some SPAC listed companies were accused of fraud, the trend died down.
However, this does not mean that investing in an IPO is unviable. A cursory look at some of the firms that have seen their share price jump meteorically over just a handful of years proves this fact. For instance, despite recent drops, shares of Meta Platforms, Inc. (NASDAQ:META) are up by 328% since they were listed on the market in 2012. Those of the healthcare services provider HCA Healthcare, Inc. (NYSE:HCA) have appreciated by a whopping 535% since its 2011 IPO, and those of the biopharmaceutical company Karuna Therapeutics, Inc. (NASDAQ:KRTX) are up by a staggering 1,174%.
Therefore, strong returns through an IPO might just be on the horizon, and to help you in your decision making, we have listed down some of the hot public listings on the public market. Out of these, the top three on our list of the best IPO stocks to invest in are ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), Prometheus Biosciences, Inc. (NASDAQ:RXDX), and Global-e Online Ltd. (NASDAQ:GLBE).
Our Methodology
We took a look at the dozens of companies that have recently listed their shares for sale on the stock markets and picked out those that in our view are worth considering. Several factors such as their share price growth since the IPO, financial health and market dynamics were considered for this list, and the companies were then ranked through hedge fund interest generated via Insider Monkey’s Q2 2022 survey of 895 funds.
Some of these companies went public in 2021, while others held their IPOs this year.
Let’s start our list of the best IPO stocks to invest in right now.
Best IPO Stocks to Invest In Right Now
12. 92 Energy Limited (ASX:92E.AX)
92 Energy Limited (ASX:92E.AX) is an Australian company that is involved in mining Uranium in Canada. The company has 13 mining claims in Canada, through which it operates five projects that have close to a thousand square kilometers of mining areas.
92 Energy Limited (ASX:92E.AX) listed its shares for an IPO in April 2021, and since then its shares have appreciated by 88%. The firm’s uranium assets lend it a crucial advantage in today’s energy starved economy that is seeing a renewed interest in renewable energy sources and nuclear power plants in the aftermath of the Russian invasion of Ukraine that has seen oil prices soar to record highs. Some of these include China’s plans to build 150 nuclear reactors and France’s latest announcement of increasing reactors. The stock ranks 12th in our list of the best IPO stocks to invest in now.
Along with Prometheus Biosciences, Inc. (NASDAQ:RXDX), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and Global-e Online Ltd. (NASDAQ:GLBE), 92 Energy Limited (ASX:92E.AX) is an IPO stock that you must look at.
11. Peregrine Gold Limited (ASX:PGD.AX)
Peregrine Gold Limited (ASX:PGD.AX) is another Australian mining company. It focuses its efforts on mining gold, and the firm is headquartered in Perth, Australia. Peregrine Gold Limited (ASX:PGD.AX) has full rights to mine gold in a project in Australia’s northwestern Pilbara region, with its project covering 1,547 square kilometers of mining area licenses.
Peregrine Gold Limited (ASX:PGD.AX)’s IPO took place in February last year, however, the true boom in its share price took place earlier last month when the shares exploded by 60% on the market when it announced that it had discovered a significant amount of gold reserves in Western Australia. Peregrine Gold Limited (ASX:PGD.AX) held AUD4.3 million in cash and cash equivalents at the end of its latest quarter. Its shares have appreciated by 144% since the initial public offering in April 2021.
10. Lithium Energy Limited (ASK:LEL.AX)
Lithium Energy Limited (ASK:LEL.AX) is a lithium and graphite miner that is headquartered in West Perth, Australia. The company’s mining properties are located in Argentina and Australia, and its Argentinian property covers roughly 12,000 hectares of mineable area.
Lithium Energy Limited (ASK:LEL.AX) is a spinoff from another Australian mining company, with the firm’s IPO taking place in May 2021. One of the company’s projects is already producing lithium carbonate, and another is expected to start production next year. Lithium Energy Limited (ASK:LEL.AX) is also targeting as much as 8.7 million tonnes of lithium production from its flagship project in Solaroz. Since its IPO, the firm’s shares have grown by 102% on the stock market, with major chunks of the growth coming in April this year after it received further approvals for mining in Solaroz.
9. Volvo Car AB (publ.) (STO:VOLCAR-B.ST)
Volvo Car AB (publ.) (STO:VOLCAR-B.ST) is a Swedish car manufacturer that has been in business since 1915 and is headquartered in Gothenburg, Sweden. In addition to selling cars, the firm also sells spare parts and provides financing services to its customers.
Volvo Car AB (publ.) (STO:VOLCAR-B.ST)’s revenues grew by 31% annually by the end of its second quarter, alongside a delivery bump of 33%. At the same time, its market share grew in both Europe and the Americas, and with one eye on the future, Volvo Car AB (publ.) (STO:VOLCAR-B.ST) also captured 37% of the European heavy duty electric truck market. Volvo Car AB (publ.) (STO:VOLCAR-B.ST) listed its shares on the public market in 2021 and since then they have appreciated by 2.5%.
8. China Three Gorges Renewables (Group) Co.,Ltd. (SHA:600905.SS)
China Three Gorges Renewables (Group) Co.,Ltd. (SHA:600905.SS) is a Chinese renewable energy power generation company. The firm generates electricity through dams, solar panels, and wind turbines. It is headquartered in Beijing, China, and also provides consultancy services to other companies. It is the only Chinese company in our list of the best IPO stocks to buy now.
China Three Gorges Renewables (Group) Co.,Ltd. (SHA:600905.SS) is one of the largest renewable power generation companies in the world, with a total capacity of 23 GigaWatts as of 2021. China’s focus on carbon neutrality is expected to strongly benefit the company, and China Three Gorges Renewables (Group) Co.,Ltd. (SHA:600905.SS) itself aims to expand its power production to stand at 50 GW by the end of 2025. The firm listed its shares on the Shanghai stock market in June last year, and since then they have appreciated by 43%.
7. Trajan Group Holdings Limited (ASX:TRJ.AX)
Trajan Group Holdings Limited (ASX:TRJ.AX) is an analytical and life sciences services provider that is headquartered in Ringwood, Australia. The firm has customers all over the globe and it provides a host of products such as syringes, gas filters, and automation systems.
Trajan Group Holdings Limited (ASX:TRJ.AX) listed its shares on the stock market in May 2021, and since then the shares have appreciated by 19%. The firm’s financial results for its fiscal year 2022 saw it strongly grow its revenue by 41% annually and improve its gross margin by 1.7 points. This growth came at a time when healthcare providers all over the world were suffering from the shocks induced by the coronavirus pandemic. The result also confirmed Trajan Group Holdings Limited (ASX:TRJ.AX) ‘s global footprint, with 55% of its staff residing outside Australia.
6. Digital World Acquisition Corp. (NASDAQ:DWAC)
Digital World Acquisition Corp. (NASDAQ:DWAC) is a shell company that is aiming to merge with or acquire a company operating in the financial services, technology, cloud software services, or technology industries. The firm is headquartered in Miami, Florida, the United States.
Digital World Acquisition Corp. (NASDAQ:DWAC) is best known as the special purpose acquisition company (SPAC) related to former U.S. president Donald J. Trump. Since listing its shares on the stock market in October last year, the shares have grown by 23%, even as uncertainty looms on its prospects of closing the acquisition of Trump linked social media platform Truth Social – which the former president heavily supported after being banned from Twitter.
Insider Monkey’s second quarter of 2022 survey of 895 hedge funds saw five as having invested in Digital World Acquisition Corp. (NASDAQ:DWAC). It ranks sixth in our list of the best IPO stocks to invest in now.
Out of these, the largest holding belongs to Matthew Halbower’s Pentwater Capital Management which owns 608,991 shares that are worth $14 million.
Digital World Acquisition Corp. (NASDAQ:DWAC) joins our list of hot IPO stocks, meeting others such as ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), Prometheus Biosciences, Inc. (NASDAQ:RXDX), and Global-e Online Ltd. (NASDAQ:GLBE).
5. Ryan Specialty Holdings, Inc. (NYSE:RYAN)
Number of Hedge Fund Holders: 13
Ryan Specialty Holdings, Inc. (NYSE:RYAN) is an underwriting, product services, administration, and risk management services provider for the insurance brokerage industry. It is headquartered in Chicago, Illinois, the United States.
Ryan Specialty Holdings, Inc. (NYSE:RYAN) listed its shares on the stock market in July 2021 and raised $1.34 billion in proceeds. Since then, the shares have appreciated by 45%. By the end of its second fiscal quarter of 2022, each of the company’s business lines produced double digit annual growth, which in turn contributed to a 27% revenue growth rate.
RBC Capital raised Ryan Specialty Holdings, Inc. (NYSE:RYAN)’s share price target to $47 from $42 in August 2022, as it shared that the firm’s Q2 results saw industry leading growth. It however cautioned that future growth might already be reflected in the stock’s valuation premium. 13 of the 895 hedge funds part of Insider Monkey’s Q2 2022 survey had invested in the company.
Out of these, Stuart J. Zimmer’s Zimmer Partners is Ryan Specialty Holdings, Inc. (NYSE:RYAN)’s largest investor. It owns 5 million shares that are worth $197 million.
Cooper Investors mentioned the company in its Q2 2022 investor letter and outlined that:
“In terms of underlying businesses, the portfolio holdings are going well and largely reported solid numbers during earnings season with positive language around the outlook for 2022. Our insurance broker Ryan Specialty is a stand-out performer, delivering low-double-digit organic revenue growth at the same time as margin expansion – this is a business that benefit from higher interest rates, emerging risks and inflating premiums. While rising rates, supply chain constraints and war in Europe represent a myriad of challenges for many industries, our view is that our management teams are highly experienced focused operators. They are well equipped to deal with these challenges, having shown great resilience and flexibility during many crises, the most recent example (COVID) proving yet again the power of their business models.”
4. Lucid Group, Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 16
Lucid Group, Inc. (NASDAQ:LCID) is an American electric car manufacturer that is headquartered in Newark, California. The company is one of the few American electric vehicle companies that have a product available for purchase on the market, and it operates through 20 retail studios in the country.
Even as Lucid Group, Inc. (NASDAQ:LCID) cut its production estimates for the second time at Q2 2022 end, the firm’s strong balance sheet with a cash balance of $4.57 billion will ensure that it will meet its production commitments even though they might take longer than hoped. Its latest quarter also saw the automaker report 37,000 reservations, which was above most predictions and indicated a strong demand for its vehicles. Lucid Group, Inc. (NASDAQ:LCID) listed its shares on the stock market in January 2021, and since then the stock has grown by 55%.
Insider Monkey scanned 895 hedge fund investment portfolios for this year’s second quarter to discover that 16 had bought Lucid Group, Inc. (NASDAQ:LCID)’s shares.
3. Global-e Online Ltd. (NASDAQ:GLBE)
Number of Hedge Fund Holders: 17
Global-e Online Ltd. (NASDAQ:GLBE) is an Israeli company that operates a platform to facilitate companies to directly ship and sell their products to consumers in different countries. It offers its services in Israel, the United States, and the United Kingdom and is headquartered in Petah Tikva, Israel.
True to the notion of a high growth company, Global-e Online Ltd. (NASDAQ:GLBE) is on a strong growth trajectory, after growing its revenues by a staggering 80% in 2021 and projecting 60% growth this year. Consensus estimates believe that the growth story isn’t over yet, with growth rates of 45% and 50% for 2023 and 2024 expected. The firm listed its shares on the stock market in May last year and since then the stock has grown by 14%.
17 out of the 895 hedge fund portfolios profiled by Insider Monkey for this year’s June quarter had held a stake in Global-e Online Ltd. (NASDAQ:GLBE). BofA raised the company’s share price target to $40 from $30 in August 2022, sharing that the firm is one of the best of its kind and its Q2 2022 results were impressive.
Colin Moran’s Abdiel Capital Advisors is Global-e Online Ltd. (NASDAQ:GLBE)’s largest investor. It owns 14 million shares worth $298 million.
2. Prometheus Biosciences, Inc. (NASDAQ:RXDX)
Number of Hedge Fund Holders: 20
Prometheus Biosciences, Inc. (NASDAQ:RXDX) is a biopharmaceutical company that develops several treatments to treat inflammatory bowel disease. The firm’s treatments also target tumors and it is headquartered in San Diego, California, the United States.
Prometheus Biosciences, Inc. (NASDAQ:RXDX) is playing in a $7.4 billion market for colon cancer, and phase one tests of its drugs have already shown positive safety data. The company is also targeting interstitial lung disease with its medicines – a key point since this disease has seen few if any, treatment options over the years. Prometheus Biosciences, Inc. (NASDAQ:RXDX) listed its shares on the public market in March 2021, and so far, the shares have appreciated by 122%.
Insider Monkey profiled 895 hedge funds for their Q2 2022 holdings and discovered that 20 had bought Prometheus Biosciences, Inc. (NASDAQ:RXDX)’s shares. Wells Fargo raised the company’s share price target to $71 from $51 in August 2022, sharing that expected readouts of the company’s drug are very impressive.
Prometheus Biosciences, Inc. (NASDAQ:RXDX)’s largest investor is Bihua Chen’s Cormorant Asset Management which owns 2 million shares that are worth $57 million.
1. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 41
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is an Israeli container shipment company. The firm provides door to door and port to port services to a variety of entities such as consolidators, freight forwarders, and end users. It is headquartered in Haifa, Israel.
Taking stock of the current global energy crisis and the strong demand for liquefied natural gas (LNG), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) signed a deal worth $1 billion with the energy giant Shell in August 2022 through which the company will ship LNG from Asia to North America from 2023. It also pays a strong dividend of $6.78 per share for a whopping 78% yield. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s IPO was in January 2021, and its shares have grown in value by 186% since then. Since the IPO, the firm’s total dividend return stands at 340%.
By the end of this year’s June quarter, 41 out of the 895 hedge funds polled by Insider Monkey had bought ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s shares.
Out of these, Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s largest investor through a $177 million stake that comes via 3.7 million shares.
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Disclosure: None. 12 Best IPO Stocks to Invest In Right Now is originally published on Insider Monkey.
