These were the best-performing ASX IPOs in 2020

Were you lucky enough to get a piece of these companies during their IPOs? Well done. Looking at these stellar returns, we're all envious!

Dice spelling IPO sitting on piles of gold coins

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Private companies climbed over one another to go public in 2020 to grab all the money on offer in a hot share market.

But with such a wide range in quality, some did better than others after listing on the ASX.

"Some [were] taking advantage of a short term boost to profits from COVID. With the market placing high valuation multiples on some of these sectors, they got the double benefit of high valuation multiples on cyclically high profits," Prime Value portfolio manager Richard Ivers told The Motley Fool last week.

"Others were high quality businesses with a solid long term outlook."

Sudden share price spikes in the early life of ASX shares don't necessarily equate to long-term investment worth.

But it's still interesting to look at which initial public offerings (IPOs) performed the best last year after listing. It indicates confidence from investors that the company has some sort of future.

The Motley Fool has picked out the six newly listed companies which delivered the highest share price gains in 2020. (Mining companies, often speculative, have been excluded from the rankings.)

Douugh Ltd (ASX: DOU): 467% return

This fintech has gone gangbusters since listing in October. Investors lucky enough to pay 3 cents per share during the IPO saw the Douugh share price end the year off at 17 cents.

Douugh has an eponymous smartphone app that helps users use artificial intelligence to "simplify" everyday banking. It analyses spending, pays bills, and helps customers reach savings goals.

The company also has a partnership with Mastercard Inc (NYSE: MA) to issue virtual debit cards under that badge.

Douugh shares have been in a trading halt since before market open on 21 December, pending an announcement regarding an acquisition.

Cosol Ltd (ASX: COS): 290% return

Cosol is a technology services provider, specialising in enterprise asset management systems. 

It managed to list in January before COVID-19 really struck Australia with an IPO price of 20 cents per share. Shares in the Brisbane business sold for 78 cents when the trading year ended.

The company revealed at its annual general meeting in November that it had won contracts with big clients like the Australian Defence Force and Energy Queensland.

4DMedical Ltd (ASX: 4DX): 233% return

Another technology company, 4DMedical is the inventor of a medical imaging system called XV Lung Ventilation Analysis Software. The business reaps revenue from both software and hardware.

4DMedical sold shares for 73 cents a piece during its IPO. The 4DMedical share price has taken off since its float on the ASX in August, trading at $2.43 at the end of 2020.

The Melbourne and Los Angeles-based firm received approval for its technology from the Therapeutic Goods Administration in September, and scanned its first commercial patient in December.

Playside Studios (ASX: PLY): 130% return

Playside Studios is an electronic games maker. The company sold for 20 cents a share during its IPO but after less than a month of ASX trading it ended the year at 46 cents. 

Read about Playside's work in our 3 mammoth IPOs of 2020.

Credit Clear Ltd (ASX: CCR): 113% return

You can see by now there is a definite theme among the highest-returning IPO shares in 2020.

Credit Clear is yet another tech provider that sells accounts receivables software. The app provides the payer with an option for paying in instalments and allows the payee to access business intelligence about its customers.

After selling for 35 cents during its IPO, the Credit Clear share price surged 133% in just its first week on the ASX in October.

It has somewhat moderated now but still went for a very nice 74.5 cents when the year closed.

Aussie Broadband Ltd (ASX: ABB): 99% return

Aussie Broadband is an internet services provider, mainly selling NBN plans.

The company deliberately markets itself as a premium provider, pointing out its superior speed, bandwidth and Australian customer service call centre.

The Victorian company sold its IPO shares for $1 a piece, including to some lucky customers. When it floated on 16 October, Aussie Broadband's market capitalisation was $190 million.

Now, with the Aussie Broadband share price doubling in just two months, it is using the capital raised to build its own dark fibre network. This means in the long term it will no longer have to pay lease fees to Telstra Corporation Ltd (ASX: TLS).

"It also means we can connect businesses directly to our own fibre. So we're not paying the NBN or someone else for those services," Aussie Broadband managing director Phillip Britt told The Motley Fool back in September.

"We've got some fairly lofty ambitions. The capital markets was the obvious way to raise cash to do what we want to do."

Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Aussie Broadband Limited. The Motley Fool Australia has recommended Mastercard. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Hand with Australian dollar notes handing the money to another hand symbolising ex-dividend date.
Share Market News

Morgans says these ASX shares are buys (with special dividends to come)

Here's what the broker is saying about these shares.

Read more »

Investor sitting in front of multiple screens watching share prices
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave the thumbs up to these ASX shares last week. Why are they bullish?

Read more »

Man with rocket wings which have flames coming out of them.
Broker Notes

These ASX shares could rise 30% to 50% in 12 months

Big returns could be on the cards for owners of these shares according to analysts.

Read more »

View from below of a man with a shovel standing by a hole he has dug in the garden, with blue sky in the background.
Resources Shares

Here's why I'm steering clear of Core Lithium shares

Lithium has bottomed out over the past year, but here's why this is NOT the bargain stock to buy.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

Why these 4 ASX 200 shares grabbed the Motley Fool's headlines this week

From stellar earnings results to a multi-billion-dollar acquisition approval, these four ASX 200 shares made a big splash this week.

Read more »

A happy older couple relax in a hammock together as they think about enjoying life with a passive income stream.
Investing Strategies

I'd aim to turn a $20,000 savings account into $25,400 of passive income

It doesn't matter if you don't have a pile of cash to start investing. The important thing is to start.

Read more »

A businessman hugs his computer and smiles.
Opinions

3 ASX shares to buy and hold forever

I like these stocks as ultra-long term ideas.

Read more »

A man with grahpics of robot arms, indicating a share price movement in ASX robotics and tech companies
Share Market News

Here's how the ASX 200 market sectors stacked up this week

Tech shares led the pack for a second week, clocking a near 10% gain over the fortnight.

Read more »