You have the seven indicators to identify which IPOs are set to soar.
You have my No. 1 IPO pick of the year being sent to your inbox this very minute.
But you still may be wondering … how do I do this research on my own?
I’m glad you asked!
There is a company out there called Renaissance Capital.
You may be familiar with their Renaissance IPO ETF (NYSE: IPO). It tracks an index of IPOs from their fifth day of trading and removes them after their 500th day of trading.
It’s a great index and an easy way to get exposure to IPOs. Year to date, it’s doubling the return of the stock market (33% vs. 15%).
Well, this company also has a website … www.RenaissanceCapital.com.
From there, you can pay a fee of $97 a month to get all the data around IPOs.
You can see:
- A calendar of IPOs coming out for the month.
- The S-1 form. This is the form a company has to file before going public. It includes all the juicy stuff from their revenue growth to what they are using the money for.
- Seven different screeners that help you sort out the data.
And so much more.
But before you jump in with both feet, you will want to know…
The Secret to
Doubling Your Returns
So, here’s the good news about IPOs – 90% of companies drop below their IPO price within the first few months of trading.
Why is that good? After all, we want the IPOs to go up, not down!
Well, it’s good because it gives you plenty of time to make even more money.
You see, when a company goes to IPO, it’s a bit like “staging” a house. A realtor might spend a few thousand dollars slapping on some paint, throwing in some decorations and cleaning out the garbage to make sure the house looks close to perfect.
Then, when the new buyer comes in, they discover all the faults. We’ve all been there, right?
Sure, it might be a good buy … but it takes a bit of time and money to recoup the investment.
In the same way, companies stage their financials for their IPOs. They might delay paying some bills, hold off on some R&D (research and development) and even cut costs for the short term. After all, they want to fetch the best IPO price possible. And then, in the months that follow their IPOs, leadership has to reveal a few issues they had been masking.
Which explains why 90% of companies see their stock drop after their IPO.
It doesn’t mean they are bad companies. It just means we want to wait for the price to drop before buying.
I was an early investor in Facebook, but I didn’t buy on May 18, 2012 – its IPO date. It listed its IPO at $38, but I decided to wait a bit. The stock dropped down to $30, then to $25, and even dipped below $20.
I got in around $18.
Today, the stock is trading for about $170.
So those who got in at the IPO price have done well with a solid 400% gain. But those who waited, like me, have made as much as 970%.
That’s a big difference.
Here are some more examples …
On average, waiting to buy an IPO will DOUBLE your returns! This simple concept, as you can see, has helped me make a lot more money.
Of course, knowing WHEN to buy is the key.
But this is where things get complicated.
Do you really want to spend hours upon hours researching all these IPOs? I am sure you have better things to do …
This is why so many people subscribe to my Profits Unlimited service.
It’s only $47 for the year.
That’s less than $5 a month!
Frankly, the only reason I charge this small fee is to offset our costs. (I don’t make a dime of profits.) I have a customer service team, a production team and a research team … over 20 people … and I want to make sure we pay them well.
So, for less than a cup of coffee at Starbucks, I do all the work for you!
And members are making a fortune.
Until next time, I wish you good investing.
Editor, Profits Unlimited