Robbie Burns
Robbie Burns's columns :
17/02/2016How To Trade In A Bear Market
21/12/20152016 Trading Picks
04/11/2015IPOs Which Look Interesting >>
22/09/2015Rules for Trading During a Volatile Summer
10/08/20155 Companies That Might Get Taken Over
10/06/2015Gambling on Exciting Companies Loses You Money

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Robbie Burns – The Naked Trader

Robbie has been trading full-time since 2001. His book "The Naked Trader" (which also has useful information on how to use advfn) has become one of the biggest-selling finance books, reaching the top 150 books on Amazon - order it here. Trades made for Robbie's website have amassed profits of more than £300,000. You can read about his buys and sells daily at www.nakedtrader.co.uk.


IPOs Which Look Interesting

04/11/2015

After a quiet summer there's a sudden deluge of IPOs coming onto the market. That's "Initial Public Offerings" to you and me. These are companies deciding they want to float on the market.

But how do you decide which ones to go for? It's quite difficult. Some float and do brilliantly. Others crash and burn. And some, well, don't do an awful lot one way or the other.

First thing I look at is: are they going on the lightly regulated AIM market or are they going for a full listing?

Those heading for AIM I treat with immediate suspicion. That's because with light regulation in this market some companies have launched and basically made themselves look much  better than they were in reality. Camkids and Naibu anyone? They looked great until they unravelled fast, both ending up at zero.

This rarely happens with companies floating on the main market where heavier regulation usually stops dodgy companies from listing there.

The other plus about a main market listing is, depending on its valuation, shares quickly get included in either the FTSE 100, FTSE250 or small cap indicies so fund managers and index linked funds tend to buy in.

So let's take a look around shares that have recently listed.

I've had a good read through the bumf the companies put out about themselves and my favourite after reading them all - drum roll - is brick maker Ibstock.

Ibstock says it is experiencing big growth in its key UK brick market driven by a shortage of homes and supportive government policies. Even better it says it is struggling to keep up with demand and there is a high barrier to entry to the business.

What I really like about it are the figures - profits and revenues have risen strongly over the last three years. There is no sign of this stopping.

And because it's a main listing my guess is the valuation will be enough to get it into the FTSE 250 index. So in December it should gain some more publicity and funds will be forced to buy in.

One of the biggest new issues of the year - Worldpay.

Worldpay is one of the biggest payments companies and so a longer-term stake in it seemed to make sense.  This is one of those new issues that looks good. A giant of a company and likely to be valued highly enough to get into the FTSE 100 shortly. And that should bring about further rises. For me a core holding now for at least a couple of years barring a general market meltdown.

Another new issue I am interested in is along similar lines to Ibstock and that is retirement housebuilder McCarthy and Stone. Which probably has to buy a brick or three from Ibstock.

Fantastic figures from McCarthy which has grown its revenues by 25% a year. And with lots of building likely in its sector, it looks a reasonably safe bet. That hasn't floated yet, should be some time in November.

Another that looks quite good is Equiniti which as I write is trading just under its float price.

This company supplies tech, payment and admin services to a lot of big companies. The dividend here should be good too.

I expect to hold Worldpay, Equiniti, Ibstock and McCarthy and Stone for some time in spreadbet and ISAs. I think all four should deliver the goods over the years with some decent dividends thrown in too.

Moving to a risky AIM one - Evgen Pharma that floated at 37p. As it's on AIM it makes it risky even more so as it is a clinical stage drug development company focussed on cancer. That means it's impossible to value and would be a pure punt for fun money.

That one started higher but ended up lower already.


You can read Robbie’s daily market comments together with his latest buys and sells at his website www.nakedtrader.co.uk

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