After a slow start to the year, IPO activity has begun to pick up in the second-quarter, with 43 IPOs having been launched since April 19. Of those, just 12 have declined in the days and weeks since, while the other 31 have posted gains, many of which have been impressive; nine of the IPOs issued since April 19 have posted gains of at least 60%.
In this article we’ll take a look at three IPOs that have been issued since June 14 which immediately gained the support of some of the company’s insiders. Insider buying activity is always a positive indicator for any stock, ensuring that a company’s management team is aligned with shareholders, and that they believe in the future successful performance of shares.
Alongside our tracking of insider trading activity, we also track the top consensus picks of the best performing hedge funds each quarter. This “Best Performing Hedge Funds Strategy” gained 4% last quarter vs. a loss of 1% for the S&P 500 ETF (SPY), and a further 7.6% so far in the second-quarter compared to a 0.9% loss for the SPY. Since its inception in May 2014 this strategy’s picks have returned 87.8% vs. 53.3% for the SPY. You can see our latest picks by trying our newsletters free of charge for 14 days.
i3 Verticals Inc (NASDAQ:IIIV)
Who Bought Shares: General Counsel and Secretary Paul Maple
How Many Shares Were Bought: 5,769 @ $13.00 per class A share
Date of the Transaction(s): June 25
In addition to the i3 insider’s recent purchase, he also owns 27,894 class B voting shares, which were converted from his equity ownership in the company prior to the IPO.
i3 Verticals Inc (NASDAQ:IIIV) is the newest of the IPOs discussed in this article, going public on June 21. Shares have already jumped by over 20% from the IPO price of $13.00, and had actually topped 40% gains on their first day before giving back half of those gains since.
i3 provides integrated software and payments solutions for small- and medium-sized businesses in the healthcare, education, and property management verticals, among others. The company processed $10.3 billion in payments last year, which represents the bulk of its revenue generation, and has grown at a compound annual rate of 67% over the past four years, including a 27% rate last year. Since its inception in 2012, i3 Verticals has made nine platform acquisitions and 12 tuck-in acquisitions, and the company expects to continue to search for and find attractive acquisition targets in the coming years.
On the next page we’ll look at two other recent IPOs with insider buying action.