2019 will have been known for two things: a pretty solid bull market year, and a time when many high-profile IPOs (initial public offerings)—including a couple of future blue-chip stocks—came public. Interestingly, it wasn’t a bonanza for the IPO market in general.
However, 2019’s new issues included some big boys. Personally, I usually don’t get involved in IPOs for at least the first few weeks of their life, if not longer—I’ve found that even the “good” performers tend to do well for a month or two before having a post-IPO droop. The sustained advances usually take a few months to set up (sometimes a few years!).
Of course, there is the occasional time I’ll dive into a recent IPO, but either way, I make it a point to regularly keep an eye on and get to know most well-traded new issues since so many of them end up being new leaders sooner or later.
One example of an IPO worth watching is Beyond Meat (BYND), which is positioned as one of the leaders in the rapidly growing plant-based meat industry. We know many skeptics make fun of it and point to increased competition (which is a fair point), but the big idea here is the size of the market—based on comparisons to the plant-based dairy market (13% of all dairy sales are now plant-based), the plant-based meat industry could be worth north of $125 billion within a decade, driven by direct buying (we like that Beyond is sold in the meat section of most grocery stores) and foodservice (Famous Dave’s PizzaRev, Del Taco, Tim Hortons and others use Beyond’s products). That pie (cow?) will be split many ways, but even so, this company should grow manifold in the years ahead.
Another, CrowdStrike (CRWD), is a “new age” cybersecurity stock that’s been a solid winner. The firm was built from the ground up to help enterprises with endpoint security (i.e., securing all of the devices that connect to their network), using a shared cloud infrastructure that takes advantage of crowdsourced data (hence the name) to constantly improve its platform’s effectiveness against ill-doers. More than 40% of the Fortune 100 are customers, as are many key government agencies.
FInally, Elastic (ESTC) looks like it could be the next big thing in the Big Data field. The company’s software platform looks to be one of the best in helping companies quickly mine data and get value from it, no matter the type or format. Interestingly, Elastic actually powers some well-known consumer apps (it quickly connects drivers with riders for Uber, and finds potential matches for you on Tinder), and it’s also being used in a ton of security and infrastructure monitoring and forecasting applications. It bills itself as a search company, and in a way, it’s looking to be the Google of enterprise/data search with a platform that boosts efficiencies, security and even enables new offerings.
These aren’t necessarily all buyable right this second, but these are the names to keep a close eye on.