IPO's and New Issues
- Admin
- Jun 23, 2015
- 3 min read
June 25 - Mogo Finance Technology (GO) is trading for the first time today. An interesting company that can approve loans within a few minutes and get you the money in 24 hours based on an algorithm that takes into account many minute factors down to your phone operating system and whether or not you scrolled down through the entire user agreement. We had no desire to get in on this IPO with so many other great ones on the horizon. The price dropped to $10 from an initially expected range of $11-13, which is obviously not a good sign, however apparently it was three times oversubscribed and with the stock falling to levels around $9 we think this is worth a trade. The underwriters will not allow this to close down 10% on the first day of trading so we're going to day trade this one.
Closed this position for a +3.8% day trade.
June 23 - Sleep Country Canada - $200 million IPO is now available to place expressions of interest. Pricing July 6 with an expected $14-16 range and then the closing a week later July 13. We are definitely getting in on this one for multiple reasons: it is the largest mattress retailer in Canada (a rare consumer staple for the northern markets), $17 million a year in anticipated dividend payments (we estimate this will be in the 4% dividend range), 10% same store sale growth and of course the non-resource new issue/IPO market in Canada has been on fire.
June 23 - UrtheCast (UR) - Issuing subscritpion receipts at $4.00 led by Raymond James. If you are able to get any of these we suggest you do. Urthecast is a name we traded in the $2 range but unfortunately didn't hang on to any. This new capital raise (to fund an acquisition) is priced about 20% below yesterday's market close and this stock is on a tear of late. It will no doubt pullback but not 20% so we view this as a great opportunity.
June 17, 2015 - Horizon North Logistics coming out with a new issue of shares prices at $3.75 (4.2% lower than yesterday's close of $3.91). This is a highly volatile name ($1.78-$7.78 52 week range and a beta of 2.15) with a high (7%) but possibly unsustainable dividend. You might be able to turn this issue into a small profit, but a small percentage gain is not worth the risk for us on such a highly volatile name.
June 10, 2015 - PHX Energy Services announced an issuance of 5,300,000 shares priced at $5.75 in a bought deal financing led by Peters & Co. Limited and including Scotia Capital Inc. and AltaCorp Capital Inc. This is a long-term holding of ours and if you don't own a position we recommend initiating one here (in the markets if not possible through the bought deal). The stocks is trading at a third of its $17.18 52-week high and near its lows. Unfortunately the dividend was cut and it now only pays 3.5%, but this is much more sustainable and will hopefully grow as the energy sector improves.
June 4, 2015 - Crius Energy $KWH.UN.TO announced a $30.6 million bought deal equity financing that they raised to $40.1 million on high demand. The underwriters (Cormark Securities Inc., Scotiabank, RBC Capital Markets, Desjardins Securities Inc. and Mackie Research Capital Corporation agreed to buy and sell to the public shares at a price of C$6.80. The stock fell to $6.90 at the open but then rose a close of $7.80. Anyone in on this bought deal is looking good up 15% on the first day.
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