IPOs looking attractive ahead of this week’s earnings

A number of new initial public offering (IPO) report this week and could be buying in earnings, analysts said.

During a interview with CNBC’s Trading Nation On Monday, Boris Schlossberg, director of currency strategy at BK Asset Management, and Craig Johnson, chief market technician for Piper Sandler, shared their views on the actions present the most interesting opportunities.

Lemonade, a potential long-term winner

Schlossberg started with Lemonade (LMND), an online insurance start-up, led by CEO Daniel Schreiber, who has raised more than $ 300 million when it went public in early July. He said the company could be a long-term game for investors as it plans to disrupt the insurance industry by offering straightforward policy pricing and expedited payments for claims.

“I really like Lemonade, it’s in the insurance business. I see insurance as a kind of financial dentistry. Everyone hates it but everyone has to have it, ”Schlossberg said.

Although Lemonade is still not profitable, the analyst added, “If they keep growing, they keep gaining attention, they will end up being large enough to be a very profitable underwriting business.” Lemonade announces its results on Wednesday.

Individual offers vs IPO ETFs

Renaissance IPO ETF (IPO) price table – 1 day candles see feat. RSI – Source: Koyfin

Investors can choose to purchase these individual offerings such as Lemonade, or they can invest in an ETF the likes of the Renaissance IPO ETF (IPO) to gain exposure to newly offered stocks.

However, BK’s Johnson pointed out that although this ETF is up 40% for the year, it recently broke its uptrendline, which is likely a reason to take profit at this point instead. to enter the trade.

He said: “The IPO ETF recently violated the uptrend support line of these March lows, and I’m starting to see that on a relative strength basis that this IPO ETF is starting to decline against the S&P 500. So I think it’s time to take some profit ”.

Johnson also pointed the finger at SmileDirectClub (SDC), a teledentistry company whose shares were offered in September 2019, noting that the stock price has been consolidating for some time but is now forming potential. bullish pattern (find out how to read the best forex signals) called the ascending triangle (see below). SmileDirectClub publishes its results on Wednesday.

smiledirectclub (SDC) actions
Smiledirectclub Inc. price table – 1 day view – Source: Koyfin

“A close above $ 10 would be very bullish. I would buy this breakout because from there it looks like you would start another step higher and be one of the more attractive names, ”Johnson said.


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