|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.
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
Sep. 25, 2016 04:15 AM EDT Reads: 1,378
Technology vendors and analysts are eager to paint a rosy picture of how wonderful IoT is and why your deployment will be great with the use of their products and services. While it is easy to showcase successful IoT solutions, identifying IoT systems that missed the mark or failed can often provide more in the way of key lessons learned. In his session at @ThingsExpo, Peter Vanderminden, Principal Industry Analyst for IoT & Digital Supply Chain to Flatiron Strategies, will focus on how IoT de...
Sep. 25, 2016 04:15 AM EDT Reads: 942
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Sep. 25, 2016 04:15 AM EDT Reads: 1,677
DevOps at Cloud Expo, taking place Nov 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 widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Sep. 25, 2016 03:15 AM EDT Reads: 3,341
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
Sep. 25, 2016 03:00 AM EDT Reads: 1,444
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Sep. 25, 2016 02:45 AM EDT Reads: 1,696
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
Sep. 25, 2016 02:15 AM EDT Reads: 1,204
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Sep. 25, 2016 12:45 AM EDT Reads: 1,928
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Sep. 25, 2016 12:45 AM EDT Reads: 1,033
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Sep. 24, 2016 09:45 PM EDT Reads: 1,606
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 24, 2016 08:30 PM EDT Reads: 1,444
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
Sep. 24, 2016 08:00 PM EDT Reads: 1,654
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Sep. 24, 2016 07:00 PM EDT Reads: 2,792
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Sep. 24, 2016 06:45 PM EDT Reads: 1,486
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 24, 2016 04:30 PM EDT Reads: 1,514
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 24, 2016 01:00 PM EDT Reads: 1,490
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 24, 2016 12:00 PM EDT Reads: 775
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Sep. 24, 2016 12:00 PM EDT Reads: 781
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
Sep. 24, 2016 11:45 AM EDT Reads: 1,045
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Sep. 24, 2016 10:45 AM EDT Reads: 1,726