Finimize - 😳 The biggest IPOs peaked too soon

Gazprom is the hottest gas producer in town | Deliveroo and Paytm get a little overexcited |

Hi Reader, here's what you need to know for November 30th in 3:08 minutes.

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Today's big stories

  1. Russian gas producer Gazprom reported better-than-expected results
  2. There are three groups of stocks that could do especially well from now till April – Read Now
  3. Half of the companies involved in the year’s biggest IPOs are now trading below their listing prices

Hot Property

Hot Property

What’s Going On Here?

Gazprom reported better-than-expected results on Monday, as Europe lined up all day and all night to get its hands on the natural gas producer’s exclusive product.

What Does This Mean?

Russia’s Gazprom was already basking in rising natural gas prices last quarter, as Europe – the company’s biggest export market – continued to wrestle with the ongoing shortage. But there’s more to the story here: the Russian government also effectively limited how much gas Gazprom could sell to Europe, in hopes the company would replenish the country’s own stockpiles. Europe and Asia, then, were left to battle it out for an increasingly scarce supply, which pushed prices even higher. And that helped drive Gazprom’s revenue up by a better-than-expected 70% last quarter compared to the same time last year.

Why Should I Care?

The bigger picture: Gazprom has lots more in the pipeline.
Gazprom’s expecting even better things this quarter, with demand for gas used to heat homes only set to rise as winter rolls in. The company has a good feeling about the underwater pipeline it’s been trying to build too: Europe is concerned about its historically low stockpiles of natural gas, which means it might be more likely to give the setup – which would double the undersea amount Gazprom can deliver into the region – the green light.

Zooming out: The emerging market frontrunner?
Russia’s loving this energy boom: the country’s economy – which is closely tied to oil and natural gas – is on track to grow 4.7% this year compared to last, in what would be the biggest jump in 13 years. What’s more, forecasts for Russian companies’ profits in the next 12 months are 15% higher than they were in July, according to Bloomberg. That’s more than the companies in other emerging markets like Asia and Latin America, and could suggest its stock market is a better play than theirs too…

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Analyst Take

‘Tis The Season For Strong Stock Market Returns

‘Tis The Season For Strong Stock Market Returns
Photo of Carl Hazeley

Carl Hazeley, Analyst

What’s Going On Here?

There’s an old investing adage that goes, “sell in May and go away, and come back on St Ledger’s Day”.

And that principle has proved to be pretty accurate: US stocks do tend to perform better between November and April.

Since 1926, the S&P 500 has risen an annualized 7.2% between May and October, compared to 13.6% between November and April.

And there are actually three groups of US stocks that do even better than that.

So that’s today’s Insight: why US stocks tend to do so well over the festive period, and the three groups of stocks that could outperform between now and May.

Read or listen to the Insight here

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Its revenue is growing fast too: it climbed 90% from 2019 to 2020, and it’s on track to reach $22 million in 2021 alone.

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Voo Doo You

Voo Doo You

What’s Going On Here?

Data out over the weekend showed that half the companies involved in 2021’s biggest initial public offerings (IPOs) are now trading below their listing prices, so is this a curse or…?

What Does This Mean?

The world’s most up-and-coming companies have raised a record amount of cash through IPOs this year, but some of them might’ve peaked too early: new data showed that 49% of stocks involved in IPOs that raised more than $1 billion across London, Hong Kong, India, and New York are now worth less than they were when they listed (tweet this). Take payments giant Paytm, whose shares plummeted nearly 40% in its first two days of trading earlier this month – one of India’s biggest IPO flops ever. And spare a thought for Deliveroo: the British food delivery giant saw its shares fall more than 25% after its much-hyped stock market debut back in March.

Why Should I Care?

The bigger picture: Not to point the finger, but… 
There could be a couple of reasons these companies’ share prices have collapsed. For one thing, investment banks – which decide the listing price in the first place – might’ve overegged their valuations, meaning investors are more likely to dump the stocks once reality bites. And for another, plenty of the newcomers’ “lock-up periods” – which force pre-IPO investors and employees to hold onto their shares for a certain length of time after listing – have since expired. That’s allowed those shareholders to sell up, pocket their gains, and, in turn, flood the market with more shares.

Zooming out: Someone’s happy.
The IPO boom has certainly continued to pan out well for investment banks, which make big fees from every debut they work on. And since they pass that cash onto their investors in the form of dividends and share buybacks, all these listings could partly be why an index tracking US bank stocks is up 35% this year, compared to the wider market’s 24%.

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💬 Quote of the day

“Everybody faces a blank piece of paper, no matter what they’ve written or painted or composed before. I can’t imagine approaching every single new project without doubt.”

– Stephen Sondheim (an American composer and lyricist who died on Friday)
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SPONSORED BY NOWRX

Health is wealth

The last two years have taught us how important our health is, and that’s got the healthcare industry booming.

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Here’s a goodie: NowRx is a tech-enabled pharmacy that delivers same-day medications using its proprietary software and robotics. In fact, it’s delivered over 365,000 prescriptions to date.

That’s helped boost its revenue year on year, and it’s on track to bring in $22 million in 2021 alone. And get this: its share price is up 1,650% since its stock first became available in 2016.

And with $9 million already raised from over 2,700 investors, the future’s looking mighty bright.

Give your bank balance a health boost: invest in NowRx.

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