|By PR Newswire||
|March 24, 2014 09:30 AM EDT||
CHICAGO, March 24, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the First Trust US IPO Index (AMEX:FPX-Free Report), Renaissance IPO ETF (AMEX:IPO-Free Report), Compuware Corp. (Nasdaq:CPWR-Free Report), CA Technologies (Nasdaq:CA-Free Report) and International Business Machines (NYSE:IBM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Profit from the Booming IPO Market with These ETFs
After a strong 2013, the IPO market continues to be hot this year. High investor demand, low interest rates, rising stock market and improving economy are the main reasons driving the IPO boom. Investors are now much more willing to invest in these fledgling companies, in anticipation of high rewards later.
Some of the highly anticipated IPOs continue to feed the frenzy. The most hyped IPO event this year undoubtedly is the US stock market debut of Chinese e-commerce giant Alibaba. The IPO is likely to be one of the largest in history with an expected valuation of ~$130 billion. (Read: 4 ETFs to Tap on upcoming Alibaba IPO)
Strong Momentum in the IPO Market in 2014
49 deals have been priced so far in 2014, up 81.5% from the same period last year and proceed raised ($8.0 billion) are up 24.2% from last year, according to Renaissance Capital. That is a strong rebound from the lows seen in 2008, at the height of the financial crisis, when just 31 companies went public.
Looking at the industry breakdown, Healthcare has seen the most offerings (26) this year though the rise has been spread out across various industries. This is nice change from the dot-com bubble days when the IPO space was totally dominated by the tech companies. (Read: 3 Top Ranked ETFs from hottest sectors)
Are all IPOs successful?
Investors hoping to profit from this surge should however remember that not all IPOs are successful. While a handful of these fledgling companies may turn out to be excellent investments, some may result in big losses.
If you have excellent skills in picking newly public companies, which may later turn out to be like Google, Apple or Tesla, then individual IPOs are the best for you.
But actually investing in smaller, rather unknown companies can be quite risky. 74% of companies that launched IPOs in the last six months have lost money, highest from March 2000, when 80% of new companies were unprofitable.
Further, some valuations are now touching crazy levels. Castlight Health, which debuted last week, now has a market value of $2.7 billion, though it had revenues of just $13 million last year and will not report any profits in near future. At its current price the company has a whopping P/S ratio of 181.8. (See: 2 Rising ETFs with double digit yields)
On the other hand, median IPO in 2014 through February was priced at 14.5 times revenue—which itself is the highest in 14 years.
Case for Investing in IPO ETFs
Most investors should consider IPO ETFs that provide a low-risk and diversified exposure to IPOs, instead of betting on individual stocks.
With their sharp focus on the largest, most liquid and best performing offerings, these ETFs have been handily beating the market.
IPO ETFs provide exposure to newly public companies before they join other core US equity indexes. Most broad market indexes include newly public companies only after a 'seasoning' period—i.e. after they have been trading for some time. For example, Google was included in the S&P 500 index about two years after its debut.
Investors should however note that they will not be able to capture the first day's 'pop' (or drop!) with these ETFs, since they include the newly public stock only after it has been trading for a few days.
Though IPO ETFs do not participate in the first day's 'pop', this strategy reduces their volatility. Many retail investors had suffered losses in Facebook IPO, one of the most hyped IPOs of all times, which fell substantially below its offer price within the first week of trading itself, but recovered a lot later.
Many investors probably still remember the disastrous performance of some of the 'hot' IPOs from the dot-com era. An ETF approach can largely reduce the risks, while offering the opportunity to participate in the gains of a diversified group of larger, more liquid IPOs.
FPX tracks the IPOX-100 U.S. Index, which is a modified value-weighted price index measuring the performance of 100 largest, typically best performing and most liquid U.S. IPOs (including spin-offs).
Currently, the product has a nice mix of sectors, with top four being Consumer Discretionary, IT, Energy and Healthcare. In terms of individual holdings, Facebook (11.0%), AbbVie (8.7%) and General Motors (6.9%) take the top three spots.
With a 10% cap on all constituents, the fund rules out too much concentration in any single holding. The ETF, which was initiated in 2006, has managed to attract about $570 million in assets so far. It charges annual expenses of 60 basis points.
The product has crushed the broader market over the last five years, returning 288% compared with 170% for SPY.
IPO tracks the rules-based Renaissance IPO Index which is comprised of the largest and most liquid newly-listed U.S. IPOs. New companies are included in the index on the fifth day of trading or during quarterly review. They are removed after two years.
Zoetis, Facebook and Workday are the top holdings as of now. This ETF is more top-heavy compared with FPX, with top ten holdings accounting for almost 60% of the asset base. The fund charges an expense ratio of 60 basis points.
The ETF was launched recently, but has been handily beating the broader market since inception.
The Bottom Line
The IPO market is booming this year. But investing in new, untested companies can be risky. ETFs provide a low-risk and convenient way to profit from the IPO boom.
Compuware Attracting Private Equity
Reportedly, private-equity firms Vista Equity Partners LLC and Thoma Bravo LLC are pondering over the buyout of Compuware Corp. (Nasdaq:CPWR-Free Report). This is the second time in last 15 months that Compuware attracted attention from prospective private-equity buyers.
Although no talks between the parties have been reported, according to Bloomberg the company's finances are being reviewed by the duo. Compuware rejected a $3.2 billion bid from activist investor Elliott Management Corp. in January last year.
Post the Elliott offer, Compuware reportedly solicited a number of other private equity funds such as Blackstone Group LP, TPG Capital LP and Golden Gate Capital for a possible buyout. However, to date, nothing concrete has materialized from these discussions.
After rejecting Elliott's offer, Compuware announced a number of initiatives that included cost cutting, divestiture of non-core units, dividend payment and lastly the spin-off of its cloud-based division Covisint into a separate publicly traded unit, Covisint Corp.
On May 16, 2013, Compuware declared its first dividend of 12.5 cents as part of its restructuring program. Covisint started trading as a separate company from Sep 2013. Compuware offered approximately 18% of its stake in the IPO. The company is expected to distribute its remaining shares directly to shareholders within a year of the completion of the IPO.
Earlier this year, Compuware divested three strategic business units — Changepoint, Professional Services and Uniface — which will allow management to focus better on the core business, thereby improving execution. Compuware's restructuring plan is expected to save approximately $110.0–$120.0 million on an annual basis over the next couple of years.
We believe Compuware's initiatives are positive for shareholders over the long term. Compuware expects APM to grow 9.0% in 2014. New program wins and introduction of new products will help Compuware to counter strong competition from the likes of BMC Software and CA Technologies (Nasdaq:CA-Free Report). This also makes the company attractive to private-equity buyers.
However, overdependence on International Business Machines' (NYSE:IBM-Free Report) technology may rationalize growth prospects to a certain extent. Furthermore, the intensely competitive landscape remains a major headwind.
Currently, Compuware has a Zacks Rank #3 (Hold).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
When people aren’t talking about VMs and containers, they’re talking about serverless architecture. Serverless is about no maintenance. It means you are not worried about low-level infrastructural and operational details. An event-driven serverless platform is a great use case for IoT. In his session at @ThingsExpo, Animesh Singh, an STSM and Lead for IBM Cloud Platform and Infrastructure, will detail how to build a distributed serverless, polyglot, microservices framework using open source tec...
Jun. 27, 2016 08:30 PM EDT Reads: 347
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
Jun. 27, 2016 07:45 PM EDT Reads: 360
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jun. 27, 2016 05:15 PM EDT Reads: 362
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
Jun. 27, 2016 03:15 PM EDT Reads: 354
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Jun. 27, 2016 03:00 PM EDT Reads: 1,160
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Jun. 27, 2016 03:00 PM EDT Reads: 762
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
Jun. 27, 2016 02:45 PM EDT Reads: 1,233
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Jun. 27, 2016 02:30 PM EDT Reads: 1,242
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Jun. 27, 2016 12:00 PM EDT Reads: 851
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Jun. 27, 2016 10:00 AM EDT Reads: 1,057
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jun. 27, 2016 09:30 AM EDT Reads: 902
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Jun. 27, 2016 07:30 AM EDT Reads: 1,077
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Jun. 26, 2016 05:00 PM EDT Reads: 1,328
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Jun. 26, 2016 05:00 PM EDT Reads: 1,245
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Jun. 26, 2016 04:00 PM EDT Reads: 1,300
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Jun. 26, 2016 04:00 PM EDT Reads: 1,369
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Jun. 26, 2016 12:00 PM EDT Reads: 1,157
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Jun. 26, 2016 12:00 PM EDT Reads: 1,378
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Jun. 26, 2016 12:00 PM EDT Reads: 1,317
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Jun. 25, 2016 03:00 PM EDT Reads: 1,652