With the stock market reaching five-year highs, the IPO market in 2013 is expected to be more robust than last year.
In fact, strong IPO performance at the end of 2012 has given hope that the IPOs of 2013 will take off after hitting the market.
"To me, it feels like a meaningful shift in the market," said Tom Murphy, a partner and head of the securities-capital and markets group at law firm McDermott Will & Emery. "With those companies [that had great IPOs], all in very different industries, getting out at the top of their ranges, and above, is a really strong signal."
If you want to be an IPO investor with hopes of getting the hot deals, it pays to keep your eye on the new issue calendar and watch for small deals that make sense as long-term investments.
In the next two weeks there are two deals scheduled that may be of interest to you.
Let's take a look.
January 2013 IPO Calendar
Tri Pointe Homes (NYSE: TPH)
Tri Pointe Homes on Jan. 31 plans to sell 11 million shares of stock in their IPO to raise $220 million.
The company is a home builder that formed in 2009, just as the housing crisis reached peak levels. According to the company this gives them a significant advantage over their competition as they have no legacy issues or stale underperforming assets and inventory.
The company operates in California and is looking to expand in other southwestern states as the opportunities arise. Tri Pointe current operations consist of 13 communities in California with 695 lots under various stages of completion.
The Chairman of the Board is Barry Sternlicht, founder of private equity concern of Starwood Capital Group and Starwood has invested $150 million in the firm.
This is an emerging growth company and will sell at a premium valuation, but the presence of private equity firm Starwood Capital as a 41% owner of the company and the potential for a recovery in the California housing markets makes Tri Pointe an intriguing offering for investors.
Citicorp, Deutsche Bank and FBR are the lead managers of the deal.
Gladstone Land Corp. (Nasdaq: LAND)
Another real estate-related IPO scheduled for Jan. 31 is Gladstone Land Corporation.
This company was formed to buy farmland and lease it to operators on a triple-net basis. It favors farmland where farmers can grow crops year round, and currently owns 12 properties in California and Florida.
Dole Food Co. Inc. (NYSE: DOLE) is the largest tenant so far with 72% of the available farm acreage leased by the giant food and vegetable company.
The company may also purchase properties that relate to farming such as storage processing and packing facilities. The company will be organized as a real estate investment trust and the company intends to deliver monthly dividends from the rentals received from farmers.
Farmland has been touted by many notable investors such as Jim Rogers as a higher yielding inflation hedge. In recent years many large pension and investment funds have been looking to add farmland to their portfolio to add higher returns and increase diversification. Gladstone Land could provide a higher yielding REIT that allows individual investors to achieve the same goals over time.
The company is selling 3.3 million shares at $15 and the lead underwriters are Janney Montgomery Scott and JMP Securities.
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