With the expectation 2015 was going to be a bumper year for equities, a large number of private companies decided to go public and list on the market with the hope of striking it rich.
Fortunately for some companies that have listed this year, the decision to list has proven to be highly successful with the share price rising from day one. Other companies, on the other hand, haven’t been so lucky and have been punished along with the broader market.
Here are five of the most popular initial public offerings (IPO) of 2015 and a quick review of their performance so far:
1. Vitaco Holdings Ltd (ASX: VIT) – After a $232 million IPO, with an issue price of $2.10, Vitaco shares surged as much as 19% on its debut in September before hitting a high of $3.20 in November. There is little doubt that the success and excitement surrounding fellow vitamin company Blackmores Limited (ASX: BKL) this year had an impact on the stock but it appears some of this enthusiasm has started to wear off with the stock now trading around $2.50 per share. The company is yet to release a set of financial results as a public company so investors may be waiting to see if it can reach its prospectus forecast of around 14% earnings growth in FY16.
2. Myob Group Ltd (ASX: MYO) – With a listing market capitalisation of around $2.3 billion, the float for cloud accounting software provider MYOB was one of the largest this year. Despite the share price jumping more than 7% on its debut, the current share price is now at a 10% discount to its float price of $3.65. The company delivered a solid first half result with a 14% rise in pro forma half-year earnings before interest, tax, depreciation and amortisation (EBITDA) to $72 million and an 8% increase in sales to $161 million.
3. A2 MILK FPO NZ (ASX: A2M) – A2 Milk has been listed on the New Zealand market for more than 10 years but since listing on the ASX in March, the share price has increased by more than 80%. Despite a shaky start, the company has benefited from takeover interest and surging demand for its infant formula products. Interestingly, A2 produced a full year loss in FY15 and considering the company now has a market capitalisation of $700 million, investors will have to remain confident in the story behind the business.
4. Mcgrath Ltd (ASX: MEA) – McGrath is the most recent float of this list, having debuted just over two weeks ago. It was a shaky start for the first ever listed real estate agency with the shares plunging 12% on debut on the back of concerns of a slowing property market. Although the share price has since stabilised, concerns about the strength of Australia’s property market remain and the most recent data shows that property prices in McGrath’s most important markets are beginning to cool. With only 3% of the national real estate market covered however, there is a significant opportunity for the company to expand through consolidation. It remains to be seen however, what impact a downturn in the housing market could have on McGrath.
5. Costa Group Holdings Ltd (ASX: CGC) – Shares in Costa, the largest fresh produce supplier to major Australian food retailers, made a disappointing debut on the ASX in July falling by 4% on its opening day. However, since reaching a low of $1.77 in September, the share price has rallied more than 50% and is now trading closer to $2.65. Costa now has a market capitalisation of $835 million and was admitted into the ASX 200 in the last quarterly rebalance. The company is forecasting FY16 net profit after tax of $47.6 million which means the company is trading on a forecast price-to-earnings ratio of around 18.
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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.