IPOs and Share Offers

Initial Public Offerings (IPOs), which is when companies issue shares to the public for the first time, can present excellent investment opportunities for investors on a number of levels. Typically, in order to ensure the IPO is a success, with the Company securing the required capital from investors, its shares will be priced attractively in order to generate demand.

The risk for investors with IPOs is the uncertainty as to how a stock will trade when its shares commence trading on the market, and therefore to mitigate this risk Companies looking to undertake an IPO will seek to price their shares fairly. In turn this can result in IPOs being oversubscribed with investors being scaled back on their investment subscription, meaning they will have to buy shares on the market if they want to obtain their original desired shareholding.

Direct Market Touch plays an active role in the IPO arena, having participated in a significant number of successful IPOs. We publish client-only research notes on IPOs, undertaking thorough due diligence on the investment opportunity, and providing a detailed appraisal with a clear recommendation supported by fundamental analysis.

Our Due Diligence On IPOs Includes:

  • Analysis of the fundamentals through looking at key metrics such as the earnings multiple, return on capital employed (ROCE), and margins.
  • Balance sheet analysis, assessing metrics such as gearing, net current liabilities, net assets, and unique assets that could appreciate in value such as properties etc…
  • Assessment of key management, looking at their past performance, time commitments, how their personal interests are aligned with shareholders…
  • Peer group analysis, assessing how competitors are performing, and how their share prices have performed.

Share Offerings are when listed Companies look to raise equity from investors through issuing shares. Typically, in order to attract investors and secure the capital they need, Companies will issue shares at a discount to their prevailing share prices. This carries with it both risk and opportunity, and, like our approach to IPOs, we undertake meticulous due diligence with share offerings to ensure the interests of our clients are put first.

Due Diligence Is Key

We believe that the key to successful investment is meticulous due diligence, which is why we aim to provide our clients with as much information as possible at no extra cost to assist with investment decisions.

With IPOs and Share Offerings our in-house analysts prepare detailed research reports with a thorough appraisal of the investment opportunity, giving a clear and concise recommendation backed up by fundamental analysis.

We believe that our research adds value to the service we provide to clients, offering the transparency, simplicity, and clarity to make investing as successful and rewarding as possible.

Further Information

If you would like to become a client of DMT and have access to IPO opportunities, and our IPO research reports, please open an account here

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Alternatively, if you would like to discuss our approach to IPOs in more detail, and understand more about our bespoke investment service, please complete the Request A Callback form on this page, or Contact Us.