Wall Street had a ball in 2017 with a strong and steady run for most of the year. Several milestones were achieved by the benchmarks and investors luxuriated in the surge. In fact, the S&P 500 gained not only more than 20% but also saw its best year since 2013.
The year also marked a bounce back for the U.S. IPO market courtesy of improving economic fundamentals and consumer sentiment. Successful IPOs poured in primarily from the biotech and technology sectors while the comeback of the Chinese issuers added to the bliss.
Going by numbers from Renaissance Capital, 160 IPOs were priced this year, marking a whopping 52.4% increase from the last. Total proceeds raised in the year swelled 88.8% from the prior year to $35.5 billion.
However, considering the broader market’s stellar returns, the performance of the IPO market was less robust than expected, primarily due to the underwhelming performance of Snap Inc. SNAP and Blue Apron APRN. Investors became concerned about valuation and adopted a restrained approach in investing in IPOs. Moreover, the reservations associated with the tax overhaul acted as a dampener.
Nevertheless, the outlook appears bright for next year amid expectations of an improved economy. In fact, in its December FOMC meeting, the Fed provided a better outlook, in terms of GDP growth for 2018. A positive revision in projected inflation and expectations of a “strong” job market were also part of the forecasts. In addition, higher corporate earnings and the recent tax overhaul with lower corporate taxes are likely to boost earnings higher, benefiting the stock market and driving the IPO momentum forward.
Moreover, foreign companies have a huge preference for the U.S. market when it comes to listing and this trend is expected to continue next year. Also, IPOs are likely to witness an uptick from "unicorns," or small- and mid-sized firms that are valued at more than $1 billion. In fact, per a Reuters report, 2018 is likely to see the debut of unicorns like Airbnb and Spotify.
Here is a list of five top performing IPOs in 2017 based on their returns.
AnaptysBio, Inc. ANAB, based in San Diego, CA, is a biotechnology company involved in the discovery and development of therapeutic antibodies for inflammation and immuno-oncology primarily in the Unites states. It has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Roku, Inc. ROKU, headquartered in Los Gatos, CA, is involved in creating streaming platform for delivering entertainment to the television. It operates primarily in the United States, Canada, the United Kingdom, the Republic of Ireland and France. Roku has a Zacks Rank of 3 (Hold).
SMART Global Holdings, Inc. SGH is a designer, manufacturer and supplier of electronic subsystems to OEMs. The company is headquartered in Newark, CA. The stock has a Zacks Rank of 1.
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UroGen Pharma Ltd. URGN, based in Ra'anana, Israel, is a clinical stage biopharmaceutical company. It concentrates on developing urological pathologies with a focus on uro-oncology. UroGen Pharma has a Zacks Rank of 3.
Calyxt, Inc. CLXT, based in New Brighton, MN, is a consumer-centric, food- and agriculture-focused company. It researches and develops seeds and food ingredients for agricultural, feed, and food applications as well as offers fat saturation and gluten reduction in soybean oil and wheat. Calyxt has a Zacks Rank of 3.
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