Diamonds and Diamond Stocks as an Investment

Diamond and Jewelry Stocks

by Nkem Iregbulem

Did you know that about 250 tons of the Earth is mined in order to produce a single one-carat diamond? Diamond is a pure element — nearly 100% carbon. It is also the hardest natural substance present on Earth. In fact, the only thing that can scratch a diamond is another diamond. A large amount of heat and pressure below the Earth’s surface cause carbon atoms to uniquely bond together and form the diamond’s rare and strong crystalline structure. These diamonds form around 100 miles below Earth’s surface and are brought up by volcanic eruptions. In ancient times, people wore diamonds because they believed that they promoted strength, invincibility, and courage. Nowadays, diamonds are well-known for their use in jewelry. But you may be surprised to learn that close to 80 percent of diamonds are actually not suitable for use in jewelry. Because of their hardness, most diamonds are used industrially to cut, grind, and drill different materials.

If the diamond and jewelry industries are of interest to you, there are a number of diamond mining companies and jewelry retailers that you can choose to invest in: Anglo American plc (AAUKF), Rio Tinto plc (RTPPF), Etsy Inc. (ETSY), DGSE Companies, Inc. (DGSE), Birks Group Inc. (BGI), BHP Billiton Ltd. (BHP), BHP Billiton plc (BBL), Tiffany & Co. (TIF), and Signet Group plc (SIG). The BHP, BBL, TIF, and SIG stocks are all traded on the New York Stock Exchange, the DGSE and BGI stocks can be found on the NYSE American, and the ETSY stock can be found on the NASDAQ exchange. Meanwhile, both the RTPPF and AAUKF stocks are traded over the counter.

Headquartered in the United Kingdom and founded in 1917, Anglo American plc is primarily involved in the exploring, mining, and processing of different metals and minerals around the world. Among other substances, these include rough and polished diamonds, copper, platinum group metals, coal, nickel, iron and manganese ores. Anglo American PLC boasts a fairly large market cap of $32.27 billion and pays a dividend yield of 4.39%. Its stock has a normal price-to-sales ratio of 1.15. It trades at 9.88 times trailing earnings and at 8.81 times forward earnings. It also has a price-to-book ratio of 1.42. It faces a negative 3-year revenue growth rate of -1.03% and a negative 5-year revenue growth rate of -1.76%.

Rio Tinto plc is a mining and metals company that explores, develops, produces, and processes minerals and metals such as diamonds, aluminum, copper, gold, coal, and industrial minerals around the world. The company was founded in 1873 and is headquartered in the United Kingdom. As one of the world’s largest metals and mining companies, Rio Tinto plc boasts a large market cap of $97.3 billion and pays a high dividend yield of 5.31%. Its stock has a price-to-sales ratio of 2.50, making it somewhat overpriced. The stock trades at 12.12 times trailing earnings and at 10.79 times forward earnings. The company’s revenue fell each fiscal year from 2013 to 2016 but has been rising each fiscal year since. It therefore faces a negative 5-year revenue growth rate of -4.71% and a negative 3-year revenue growth rate of -5.65%.

You may have heard of Etsy Inc., the company that operates Etsy.com, a popular commerce platform where people can buy and sell goods online and offline. Buyers and sellers who use the site mainly come from the United States, Australia, Germany, the United Kingdom, Canada, and France. The company’s seller services and tools are especially helpful to entrepreneurs looking to start and grow their business. The company’s top selling product is jewelry. The company was founded in 2005 and is headquartered in New York. Etsy Inc. has a market cap of $5.28 billion but does not pay a dividend yield. With a high price-to-sales ratio of 11.94, the stock is considered very overpriced. The stock also has a high trailing P/E ratio of 71.93 and a similarly high forward P/E ratio of 72.99. Its stock also has a price-to-book ratio of 13.83. The company’s revenue has been increasing each fiscal year since 2013 as the company enjoys a very high 3-year revenue growth rate of 31.15% and an even better 5-year revenue growth rate of 42.69%.

DGSE Companies, Inc. was founded in 1965 and is headquartered in Texas. The company buys and sells jewelry such as bridal jewelry, fashion jewelry, custom-made jewelry, diamonds, other gemstones, watches, and jewelry components. Among other items, the company also offers gold, silver, private mint medallions, platinum, and art bars. Its customers range from individual customers to dealers to institutions around the United States. DGSE Companies, Inc. has a small market cap of $20.99 million, so its stock is very speculative. The company does not pay a dividend yield, and its stock has a price-to-book ratio of 2.59. The stock trades at 11.13 times trailing earnings and at 56.18 times forward earnings. It has a very favorable price-to-sales ratio of 0.35. The company’s revenue fell each fiscal year from 2013 to 2016 before rising in 2017. It has a negative 3-year revenue growth rate of -4.30% and a negative 5-year revenue growth rate of -13.48%.

Founded in 1879 and based in Canada, Birks Group Inc. designs, develops, produces, and sells fine jewelry, timepieces, and silverware around the United States and Canada. It has two operating segments — namely, Retail and Other. Under its various brands, the company offers designer jewelry, diamonds, charms, necklaces, bracelets, rings, wedding bands, and earrings. Birks Group Inc. has a large market cap of $93.31 billion and pays a decent dividend yield of 5.31%. The stock trades at 12.78 times trailing earnings and at 11.51 times forward earnings. With a price-to-sales ratio of 2.50, the stock is considered overpriced. The stock also has a price-to-book ratio of 2.18. The company’s revenue fell each fiscal year from 2013 to 2016 before rising in 2017. It therefore faces a negative 3-year revenue growth rate of -5.65 % and a 5-year revenue growth rate of  -4.71%.

You might also consider BHP Billiton Ltd. and BHP Billiton plc. Together, they form a natural resource company that explores for resources including diamonds, copper, silver, nickel, and gold and stands as the second largest mining company by revenue in the world. It was founded in 1851 and is headquartered in Australia. The company has four main operating segments: Petroleum, Copper, Iron Ore, and Coal. BHP Billiton Ltd. has a large market cap of $130.35 billion and pays a dividend yield of 4.49%. The stock has a price-to-sales ratio of 3.31, so it is overpriced. The stock has a trailing P/E ratio of 28.01 and a forward P/E ratio of 13.83. It has a price-to-book ratio of 2.39. BHP Billiton Ltd. faces a negative 3-year revenue growth rate of -12.30% and a 5-year revenue growth rate of -11.49%. Meanwhile, BHP Billiton plc has a fairly high market cap of $45.96 billion and pays a substantial dividend yield of 5.06%. With a price-to-sales ratio of 2.96, its stock is somewhat overpriced. It trades at 26 times trailing earnings and at 13.74 times forward earnings. The stock also has a low price-to-book ratio of 0.85. BHP Billiton has seen a negative 3-year revenue growth rate of -12.30% and a negative 5-year revenue growth rate of -11.49%.

Tiffany & Co. designs, manufactures, and retails luxury goods including jewelry and other items around the world. It not only offers jewelry collections, engagement rings, and wedding bands, but it also wholesales diamonds and offers eyewear, stationary, sterling silver, fragrances, and timepieces. The company was founded in 1837and is headquartered in New York. Its business is separated into geographical segments: Americas, Asia-Pacific, Japan, Europe, and Other. Tiffany & Co. has a market cap of $16.25 billion and pays a dividend yield of 1.66%. The company’s stock has a price-to-sales ratio of 3.84, so it falls into the overpriced category. It trades at 39.33 times trailing earnings and 29.94 times forward earnings. It also has a price-to-book ratio of 4.98. The company has a negative 3-year revenue growth rate of -0.63% but a positive 5-year revenue growth rate 1.91%.

Founded in 1950 and based in Bermuda, Signet Jewelers Ltd. is a company involved in the retail sale of diamond jewelry, watches, and various other products. The company operates through its Sterling Jewelers, Zale, UK Jewelry segments, and Other segments. The Sterling Jewelers division operates stores in malls and off-mall locations in the United States. The Zale division operates jewelry stores and kiosks in shopping malls the United States, Canada and Puerto Rico. The UK Jewelry division operates stores in the United Kingdom, Republic of Ireland and Channel Islands. The Other segment includes the operations of subsidiaries involved in diamond sourcing and polishing activities. Signet Jewelers Ltd. has a market cap of $3.55 billion and pays a dividend yield of 2.49%. Its stock has a price-to-book ratio of 1.86 and a very favorable price-to-sales ratio of 0.64. It trades at 7.78 times trailing earnings and at 10.01 times forward earnings. The company’s revenue increased each fiscal year from 2014 to 2016 as it enjoys a 3-year revenue growth rate of 2.92% and a better 5-year revenue growth rate of 9.44%.

Maybe one of these stocks can make your portfolio sparkle.

Disclosure: Author did not any of the above stocks at the time this article was written.

 

 

Stocks with Big Movements

There were some major movers today in the stock market. Here are some of the stocks with the biggest movements.

Reata Pharmaceuticals, Inc. (RETA) 76.55 +30.15 +64.98%
LifePoint Health, Inc. (LPNT) 64.90 +17.00 +35.49%
Hasbro, Inc. (HAS) 106.04
NETGEAR, Inc. (NTGR) 65.53
Ryanair Holdings plc (RYAAY) 106.70 -10.00 -8.57%
Halliburton Company (HAL) 41.54 -3.66 -8.10%

My Top Performing Stock Motifs: Some Up Over 100%

by Fred Fuld III

Motifs are like Exchange Traded Funds, except they can be created by anyone. Investors gets to choose which stocks they want to put in the portfolio, or better yet, they can invest in the Motifs created by others for a low commission. I created several motifs that are available for anyone to invest in, a few of which are up over 100% since inception.

Here are some of the motifs I created and the returns since inception (created less than two years ago):

Bitcoin, Blockchain, and Cryptocurrency Stocks +15.3%

Anti-Crime Stocks +38.8%

Liquid Biopsy Stocks +90.6% (created just a little over a year ago)

Stem Cell Stocks +100.5% (up 48.3% just in the last 12 months)

Firearms Stocks +26.6%

Gisele Bundchen Stocks +22.6%

Water Desalination +13.6%

Drone Stocks +53.9%

Cuba Stocks +26.1%

Puerto Rico Stocks +49.4% (one-year return in spite of the hurricane)

Marijuana Cannabis Stocks +82.5%

Horse Race Stocks +188.7% (top performing)

Cosmetic Surgery Stocks +141.0% (second best performing, up 56.1% just in the last 12months)

Beer Stocks +26.5%

Wine and Liquor Stocks +22.4%

Virtual Reality Stocks Over $5  +79.8%

Virtual & Augmented Reality Stocks +74.0%%

So if you are looking for a targeted way of investing, Motifs may be the way to go.

How to Get $5 from Amazon for Free (Today Only)

Amazon (AMZN) is having a special promotion, today July 17 only, whereby if you buy an Amazon gift card of at least $25 or more for someone (including yourself), you can receive $5 in credit for future purchases.

This is like receiving an immediate 20% return on your money, with no risk, since you will probably spend at least $30 on Amazon at some point

The only catch is that you have to be an Amazon Prime member. Also, when you check out, you need to enter the promotion cade:

GCPRIME16

before you click on the Order button.

More information about the gift cards can be found at:

Amazon gift card

Straight Talk for Startups: 100 Insider Rules for Beating the Odds

by Fred Fuld III

If you are an entrepreneur or startuper, you need to read Straight Talk for Startups: 100 Insider Rules for Beating the Odds. The book is written by Randy Komisar and Jantoon Reigersman, both of whom have had extensive startup and venture capital experience.

I have read several books relating to startups, but here is what I like about this one. Straight Talk for Startups has recommendations and advice that you won’t find in other books about running a startup.

Here are some examples.

  • You need two different business plans, not one
  • Why a part time team member may be better than a full time one
  • Why you should NOT provide free lunches to your employees
  • Avoid venture debt
  • If you are looking to be acquired, choose your acquirer, don’t let acquirers choose you.
  • A small board of directors is better than a big board

The authors even provide a sample board meeting agenda.

The book is a well-written, easy read, with every short chapter, each a couple pages long, representing a rule you should follow. There are actually 101 rules in this book, and I believe the last one, covered in the Epilogue is probably the most important.

Whether you are thinking of starting a startup, have recently started a startup, or you are at the point of bringing your startup to a new level, I highly recommend Straight Talk for Startups.

CFTC Announces Its Largest Ever Whistleblower Award of Approximately $30 Million

Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action.  The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program.

“The Whistleblower Program has become an integral component in the agency’s enforcement arsenal,” said CFTC Chairman, J. Christopher Giancarlo.  “We hope that an award of this magnitude will incentivize whistleblowers to come forward with valuable information and provide notice to market participants that individuals are reporting quality information about violations of the Commodity Exchange Act [CEA].”

James McDonald, Director of the Division of Enforcement, stated: “Whistleblower submissions have become a significant part of our enforcement program, allowing us to pursue violations we might otherwise have been unable to detect.  That’s one reason why we’ve worked hard to expand our Whistleblower Program, including by increasing the protections afforded to whistleblowers that come forward.  I expect the Whistleblower Program to contribute even more substantially to our enforcement efforts going forward.”

The CFTC’s Whistleblower Program was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).  The CFTC pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information on violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.  By law, the CFTC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.  Under the Dodd-Frank Act, employers may not retaliate against whistleblowers for reporting possible violations of the CEA to the CFTC.

Whistleblowers are eligible to receive between 10 percent and 30 percent of the monetary sanctions collected.  All whistleblower awards are paid from the CFTC Customer Protection Fund established by Congress and financed entirely through monetary sanctions paid to the CFTC by violators of the CEA.  No money is taken or withheld from harmed investors to fund the program.

Previously, the highest award amount paid to a CFTC whistleblower was in March 2016 of more than $10 million (see CFTC Press Release 7351-16, CFTC Announces Whistleblower Award of More Than $10 Million).

“The award today is a demonstration of the program’s commitment to reward those who provide quality information to the CFTC,” said Christopher Ehrman, Director of the CFTC’s Whistleblower Office.  “The number of leads the office receives continues to grow each year by the hundreds.  We hope that this award will continue to facilitate the upward momentum and success of the CFTC’s Whistleblower Program by attracting those with knowledge of wrongdoing to come forward.”

*  *  *  *  *  *  *

To learn more about the CFTC’s Whistleblower Program and to find out how to provide a tip or apply for an award, please visit the program’s website at https://www.whistleblower.gov/.

How to Get Your Paws on Some Pet Stocks

by Nkem Iregbulem

There’s no denying that Americans love their pets. More people own pets now than ever before. According to the American Pet Products Association’s 2017-2018 National Pet Owners Survey, 68% of U.S. households, or 85 million families, currently own pets — with a dog being the most commonly owned pet. The APPA also predicts that pet ownership will continue to grow over the next few decades.

As pet ownership rises, so does the amount of money that households spend to own and take care of their pets. A table in a report from the Insurance Information Institute provides total U.S. pet industry expenditure values from 2007 to 2017. The table indicates that these expenditures hit a high in 2017. In just that one year, Americans collectively spent approximately $69.1 billion dollars on their pets. This value has been on the rise since at least 2007 when expenditures in the pet industry stood at just $41.2 billion. Another table reports on the type and magnitude of expenses faced by cat and dog owners annually by survey participants. Reported annual expenses came from surgical and routine vet visits, food, food treats, toys, grooming, vitamins, and kennel boarding. Surgical vet visits were reported to cost around $474 annually for a dog and around $245 annually for a cat. Cat and dog owners in the survey also reported that they spend around $235 on pet food over the course of a year.

Given the continued increase in the amount of money we spend on pets, you may want look into pet stocks — stocks that benefit from this exact type of spending activity. Take a look at a few stocks, and you just might find yourself a treat. Your options include Patterson Companies Inc. (PDCO), Bayer AG (BAYRY), Henry Schein Inc. (HSIC), PetMed Express Inc. (PETS), Central Garden & Pet Co. (CENT), and Heska Corp. (HSKA). All of these stocks can be found on the NASDAQ exchange except for the BAYRY stock, which trades over-the-counter.

Your first option is Patterson Companies Inc., a medical supplies company involved in the research, development, and distribution of veterinary and dental supplies. The company was founded in 1877 and is headquartered in Minnesota. It has three operating segments: Dental, Animal Health, and Corporate. Under its Animal Health operating segment, it provides animal health services, technologies, and products such as pharmaceuticals, vaccines, diagnostics, antibiotics, equipment, and software to veterinarians, other animal health professionals, producers, and retailers. Patterson Companies Inc. has a market cap of $1.19 billion and pays a nice dividend yield of 4.63%. Its stock has a very favorable price-to-sales ratio of 0.39, which has been decreasing each fiscal year since 2013. It also has a trailing P/E ratio of 10.53 and a forward P/E ratio of 12.63.The company has a 5-year revenue growth rate of 8.49% and an even better 3-year revenue growth rate of 11.80%.

Based in Germany and founded in 1863, Bayer AG is a multinational pharmaceuticals and life science company. The company operates through its Pharmaceuticals, Consumer Health, Crop Science, and Animal Health segments. Under its Animal Health segment, the company researches, produces, and distributes prescription and nonprescription veterinary products and solutions to help prevent and treat diseases in companion and farm animals. Its main products include human and veterinary pharmaceuticals, biotechnology products, agricultural chemicals, and high value polymers. Bayer AG has a large market cap of $81.44 billion and pays a dividend yield of 2.92%. With a price-to-sales ratio of 2.38, the company’s stock is considered somewhat overpriced. It trades at 23.55 times trailing earnings and 14.03 times forward earnings. The stock also has a price-to-book ratio of 2.14. The company faces a negative 3-year growth rate of -5.38% and relatively better, but still negative 5-year revenue growth rate of -2.50%.

Another option is Henry Schein Inc., a company that distributes dental, medical, and veterinary healthcare supplies and products. The company was founded in 1932 and is headquartered in New York. It has two main operating segments, namely its Health Care Distribution segment and its Technology & Value-Added Services segment. Through these segments, it provides vaccines, pharmaceuticals, surgical products, equipment, and other products to its customers around the world. Henry Schein Inc. has a market $11.68 billion and does not pay a dividend yield. Its stock has a great price-to-sales ratio of 0.92 and a price-to-book ratio of 3.98. It trades at 27.50 times trailing earnings and 17.99 times forward earnings. Henry Schein Inc. has enjoyed increasing revenue values each fiscal year since 2013 as it boasts a 3-year revenue growth rate of 6.31% and a similar 5-year revenue growth rate of 6.87%.

You might also consider PetMed Express Inc., a Florida-based company founded in 1996. The company operates as a pet pharmacy and offers pet medications, supplements, and pet supplies such as food, beds, and crates for dogs and cats. With its pharmacy license, it sells both prescription and nonprescription pet medications. The company also frequently researches new healthcare products. PetMed Express Inc. has a market cap of $878 million and pays a dividend yield of 2.35%. A price-to-sales ratio of 3.25 suggests that the stock is overpriced. The stock also has a price-to-book ratio of 7.75. It trades at 23.93 times trailing earnings and 19.23 times forward earnings. The company’s revenue has been growing each fiscal year since 2015. PetMed Express Inc. enjoys a 5-year revenue growth rate of 3.74% and an even better 3-year revenue growth rate of 6.08%.

Founded in 1955, Central Garden & Pet Co. is a California-based company that distributes garden and pet supplies across the United States. It has two main operating segments: Pet and Garden. Under its Pet segment, the company offers products for dogs and cats such as edible bones, edible and nonedible chews, pet food, toys, carriers, treats, and grooming supplies. It also offers appropriate food and supplies for birds, fish, reptiles, and horses. These products are primarily sold to independent pet distributors, mass merchants, retail chains, grocery stores, and bookstores. Central Garden & Pet Co. has a market cap of $2.34 billion and does not pay a dividend yield. The company’s stock has a price-to-book ratio of 3.29 and a price-to-sales ratio of 1.10 — though this value has been on the rise since 2013. It trades at 21.60 times trailing earnings and 20.92 times forward earnings. With a 3-year revenue growth rate of 8.59% and a lower 5-year revenue growth rate of 3.86%, Central Garden & Pet Co. has seen increasing revenue values each fiscal year since 2014.

One more option is Heska Corp., a company founded in 1988 and headquartered in Colorado. The company manufactures, distributes, and sells veterinary diagnostic and specialty products. These products are primarily used in canine and feline healthcare markets. The company operates through two segments, namely its Core Companion Animal Health segment and its Other Vaccines, Pharmaceuticals and Products segment. Through the former, the company provides veterinary imaging instruments and services, veterinary chemistry analyzers, veterinary hematology analyzers, chewable treatment tablets, and allergy products. Through the latter, the company offers vaccines and biological and pharmaceutical animal health products to animal health companies and veterinarians. Heska Corp. has a market cap of  $791.53 million and does not pay a dividend yield. Its stock has a high price-to-sales ratio of 6.36, placing itself in the overpriced category. It also has a very high trailing P/E ratio of 113.26 and lower forward P/E ratio of 59.52. The stock also has a price-to-book ratio of 7.80. The company’s revenue increased each fiscal year from 2013 to 2016 before taking a very slight dip in 2017. Still, the company enjoys a 3-year revenue growth rate of 12.92% and a 5-year revenue growth rate of 12.18%.

Disclosure: Author did not own any of the above stocks at the time the article was written.

 

 

Can You Guess Warren Buffett’s Largest Stock Holding?

by Fred Fuld III

Warren Buffett, the head of Berkshire Hathaway (BRKA) (BRKB), is considered to be one of the top investors,  and is probably the most well known investor in the world. In addition, Buffett is a very interesting character.

Many investors like to copy Buffett’s investments, in order to match his superior returns.

So the first thing a copycat investor would do is to check and see what stock he owns more of than any other investment.  Can you guess what that stock is?

It is Apple Inc. (AAPL), the iPhone, iPad, Mac, and Apple Watch company. According the Berkshire Hathaway’s latest report to the SEC, Apple makes up 21.27% of the Berkshire Hathaway portfolio, a fairly large commitment. Buffett has 239 million shares worth over $40 billion.

The second largest shareholding is Wells Fargo (WFC), making up 12.66% of the Berkshire portfolio. In third place is Bank of America (BAC) at 10.78%.

Rounding out the top five shareholdings is Kraft Heinz (KHC) representing 10.74% of the portfolio and Coca-Cola (KO) at 9.19%.

To see all the stocks owned by Warren Buffett’s Berkshire Hathaway, so to the  Buffett Stock List.

Hopefully you can ride on Buffett’s coattails to investment success.

 

Disclosure: Author owns AAPL, BRKB, and BAC.

Investment and Business Books On Sale

Here is a list of the finance, investment, and business books that have recently gone on sale, and available on the Amazon (AMZN) Kindle. If you have any interest in these books, I suggest that you order them right away, as these sales don’t last long.

How to Talk to Anyone, Anytime, Anywhere
By Larry King with Bill Gilbert

The keys to successful communication in all areas of life.

$1.99 Retail: $11.99

Your Living Trust & Estate Plan
By Harvey J. Platt

The details of creating a living will and estate plan. Learn to save money and time with tips for everything from charitable deductions and lifetime exemptions to private annuities and protecting beneficiaries.

$1.99 Retail: $16.99

How to Speak Money
By John Lanchester

Explains the language of money without being confusing

$1.99 Retail: $9.62

The 1% Rule
By Tommy Baker

How some people turn their dreams of success into reality and how you can achieve your biggest goals in life.

$0.99 Retail: $9.99

The Power of Habit
By Charles Duhigg

How to increase productivity and achieve superior success.

$2.99 Retail: $12.99

Fill Your Funnel
By Tom Hopkins and Dan Portik

A step-by-step guide that gives you everything you need to convert posts on platforms like Facebook and Twitter into sales.

$1.99 Retail: $7.99

The Go-Giver
By Bob Burg and John David Mann
The five principles for monumental success shows that the secret to achievement lies in giving.
$1.99 Retail: $11.99

Start Something That Matters
By Blake Mycoskie

Written by the founder of TOMS Shoes, he shares a new blueprint for success.

$1.99 Retail: $13.99

The Substance of Style
By Virginia Postrel

Describes what makes consumers attracted to a product and how our sensory experiences guide our choices.

$1.99 Retail: $8.99

Creating Magic
By Lee Cockerell

Written by a former Walt Disney World executive, shares the keys to his success and leadership secrets.

$1.99 Retail: $12.99

Thinkertoys
By Michael Michalko

A guide to out-of-the-box thinking, including hands-on exercises and easy-to-follow tips.

$1.99 Retail: $12.99

Does It Pay to Buy an IPO Stock?

by Fred Fuld III and Nkem Iregbulem

Have you ever tried to get in on a hot Initial Public offering but missed out? Suppose you could have been able to get some shares on the IPO. Do you think it would have worked out?

We ran an analysis of a large selection of all the stocks that went public during the first half of the year, to determine how successful the IPO shareholders would have been. We looked at both the return on the day of the IPO and the return from the IPO to the end of June.

You will notice that of the 23 stocks, some of the stocks were down on the first day of trading but ended up year-to-date. One example is Evolus (EOLS), a provider of Botox aesthetic treatments and procedures. The stock was down 4% on the day of the IPO but increased by 128% from its IPO in February to the end of June.

The mean average of the percentage returns for the stocks on the day of the IPO was 5.78%. The overall mean average of the returns from the day of the IPO to the end of June was 18.84%. That is a decent return, especially when you consider that the S&P 500 was only up 0.8% over the same period.

The details can be found below:

Company Symbol IPO price End of IPO Day Price %chg Price End of June %chg
Neuronetics STIM 17.00 27.78 63% 27.78 63%
Entera Bio ENTX 8.00 6.28 -22% 5.99 -25%
HyreCar HYRE 5.00 5.10 2% 4.89 -2%
The Lovesac Company LOVE 16.00 23.99 50% 21.33 33%
Chicken Soup for the Soul CSSE 12.00 9.25 -23% 9.56 -20%
I3 Verticals IIIV 13.00 18.35 41% 14.75 13%
Magenta Therapeutics MGTA 15.00 14.52 -3% 13.68 -9%
ElectroCore LLC ECOR 15.00 19.85 32% 17.46 16%
Iterum Therapeutics ITRM 13.00 12.24 -6% 11.50 -12%
Hancock Jaffe Laboratories HJLI 5.00 5.24 5% 3.40 -32%
CLPS Incorporation CLPS 5.25 5.04 -4% 13.43 156%
Aslan Pharmaceuticals ASLN 7.03 5.61 -20% 7.78 11%
GrafTech International EAF 15.00 14.45 -4% 18.46 23%
Biofrontera BFRA 9.88 12.18 23% 11.99 21%
Motus GI Holdings MOTS 5.00 4.38 -12% 7.27 45%
Victory Capital VCTR 13.00 11.60 -11% 10.10 -22%
Evolus EOLS 12.00 11.50 -4% 27.32 128%
One Stop Systems OSS 5.00 4.88 -2% 4.45 -11%
Genprex GNPX 5.00 4.50 -10% 7.90 58%
Pagseguro Digital PAGS 21.50 29.20 36% 27.82 29%
EyeNovia EYEN 10.00 9.92 -1% 6.45 -36%
Nine Energy Service NINE 23.00 26.10 13% 33.04 44%
ADT ADT 14.00 12.39 -12% 8.46 -40%
AVERAGE 5.78% 18.84%