Insane 7-IPO Week Ahead – What to Buy and What to Shun

This week kicks off a flood of IPOs expected to hit in May. A diverse group of seven companies is scheduled to raise $1.0 billion in the week ahead.

Plant-based burger maker Beyond Meat (BYND) should get the most attention based on its eye-popping growth (+205% in the 1Q19), strong consumer brand, and multi-billion dollar market. The company claims its products address concerns over health, climate change, resource conservation and animal welfare.

Being spun out of Scientific Games (NASDAQ:SGMS), SciPlay (SCPL) is the week's largest IPO by deal size. While its parent has traded down over the past year, SciPlay's casino-style mobile games have been an area of solid growth (+15% in 2018).

Two Chinese technology plays are coming at $1+ billion valuations, So-Young International (SY) and Yunji (YJ). So-Young has come to dominate China's market for online plastic surgery services, featuring fast growth (+138% y/y) and a positive operating margin. Social e-commerce site Yunji also has fast growth (+102% y/y), but it was unprofitable last year and peers have traded down recently.

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Two smaller healthcare companies plan to raise $70-75 million each. TransMedics Group (TMDX) offers a unique system focused on improving the transportation of organs after they are donated. Recent high-growth medical device companies have performed well, though TransMedics has not seen widespread traction, while it has racked up large losses in the meantime. Backed by TPG, Trevi Therapeutics (TRVI) is seeing if an approved opioid can treat chronic itch, cough, and other indications.

Look out for a number of deals to launch roadshows as well.

13 recent filers become free to set terms this coming week, mostly small-caps and biotechs. LBO'd health products maker KCI Holdings (KCIH) and government contractor Parsons (PSN) are the largest, with estimated deal sizes of about $500 million each. A recent update from lab supplies company Avantor (VNOR) makes it a likely launch candidate; we estimate its deal size at over $1 billion. Potential billion-dollar deals Change Healthcare (CHNG) and iHeartMedia (OTCPK:IHRTQ) could also join the calendar. Full story at Seeking Alpha

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