Goldman Sachs BDC (GSBD) –

Goldman Sachs is spinning off some of its secured debt business in the form of an initial public offering. The company is selling 6 million shares at a price range of $20 to $21. The specialty finance company formed in 2012 makes $36.9 million on revenue of $73.3 million.  The market cap if the stock prices at the midpoint of its range will be around $725 million.

IPO Analysis –

This is a closed end fund. The way these typically trade is for a $1 to $2 decline over the first few months and for the stock price to remain flat afterwards. This is only an investment for a specific type investor and for the general investor our Recommendation – Avoid.

Tantech Holdings Ltd. (TANH)-

This company manufactures bamboo-based charcoal products that are used in household heating, cleaning, purification, agricultural and industrial energy fields. It has both a domestic and international sales and distribution network, which generate net income of $11.8 million on revenues of $64.7 million. Tantech is offering 3.2 million shares at a price range of $4 to $6 per share. The underwriter is ViewTrade Securities and the offering will be on a ‘best efforts’ basis.

IPO Analysis –

This offering is too small for us to recommend with a market cap of just $108 million. We also shy away from any stock that can easy trade below $5 per share, making the security non-marginable at most brokerages and hurting liquidity. The fact that the offering is a ‘best efforts’ means the underwriter does not have to buy all the shares before the IPO, therefore a large percent of shares could be dumped on the market shortly after the offering. Recommendation – Avoid.

National Commerce (NCOM) –

National Bank of Commerce is a relatively small local bank with locations in Alabama and Florida. They are offering just 1.6 million shares at between $18.50 and $20.50 per share. Giving them a post offering market cap of $177.5. This bank has assets of just over $1.1 billion and pulls in a net income of $5.4 million on revenue of just $31.3 million.

IPO Analysis –

This is a very small bank in comparison to many others in the region and that makes this a riskier investment. I don’t see a huge first day pop happening and the company is not right for our portfolios, however nothing terrible stands out in its balance sheet and we don’t think it will lose a lot of value in the first few months of trading. Recommendation – Neutral. 

SteadyMed (STDY) –

SteadyMed is an early stage biopharma company based out of Israel. Its main product is called Trevyent and is for the treatment of pulmonary arterial hypertension. It also has two product candidates for the treatment of acute pain and a medical device called PatchPump which delivers those drugs. The company is offering 4.3 million shares at a price range of $12 – $14 per share, giving the company a market cap of around $160 million.

IPO Analysis –

SteadyMed has yet to generate revenue from its product sales, which is typical of a biopharma at this stage. These companies usually trade flat until they start to make deals with bigger pharmaceutical companies to finally get their drugs to market. They also usually go public when their primary product is still one to two years away from FDA approval, meaning we think there will be a better entry point into the security in the near future. Recommendation – Neutral.

Valeritas (VLRX) –

This company makes medical devices, with its commercial product being an insulin delivery system designed to help people with Type 2 diabetes maintain their target blood glucose levels. Last year the company had $13.5 million in revenue but ended up losing about $75 million in net income. It is offering 5 million shares at a price of $14 – $16 per share.

IPO Analysis –

While it is nice that the company has a product on the market that is making money, its high operating expenses mean it is likely to require additional outside capital in the future to keep its business going. We don’t recommend it at this time and we think there could be better entry points in the future. Recommendation – Neutral.