There Won’t Be a Palantir IPO in 2019 – Here’s How to Profit Anyway

The Palantir IPO has been one of the most hotly anticipated IPOs this year. But on June 12, co-founder Joe Lonsdale announced there wouldn't be a Palantir IPO in 2019.

At the CB Insights Future of Fintech conference in New York, he said he'd love to see the company go public. But as a co-founder of Palantir, Lonsdale just doesn't see it happening this year.

In fact, he said the 16-year-old data mining company with a roughly $41 billion valuation is still years away from officially going public.

This is because if Palantir Technologies Inc. remains private, Lonsdale says it could potentially raise millions more from private investors. That gives the company the ability to reach profitability before making a public debut.

Plus, Lonsdale said while revenue is growing - even touting revenue of $880 million in 2018 -the company's main focus is on increasing profitability for now.

So, retail investors who were eagerly awaiting a Palantir IPO in 2019 are likely to be disappointed. However, Big Data is a rapidly growing industry regardless of whether Palantir goes public this year or not.

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In fact, it's currently worth $49 billion. But between now and 2027, that value is expected to rocket up by 110.2% to $103 billion.

And fortunately for you, you don't need Palantir to take advantage of Big Data's rapid growth thanks to our alternative play on the industry.

Check out our favorite way to profit from Big Data below...

How to Profit from Big Data with This Alternative Play on Palantir

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Our favorite alternative play on Palantir is through one of its partners, IHS Markit Ltd. (NASDAQ: INFO).

IHS Markit is a London-based data analytics company founded over 60 years ago. It was originally an information handling service that kept databases through microfilm for the aerospace industry. Since then, the company has accumulated over 50,000 customers in over 140 countries. It also services 80% of the Fortune Global 500 as well as 94 out of the 100 largest companies in the United States.

Similar to Palantir, IHS Markit is now an intelligence company in the Big Data industry. It works with governments and firms in industries from aerospace to finance. IHS is essentially a consulting agency that helps companies protect their data or improve how they run their businesses, while Palantir uses big data analysis to uncover insights, like potential terrorist attacks.

But what makes IHS Markit a great alternative play on Palantir is that it partners with Palantir. Palantir's partnership with IHS Markit means its clients get access to IHS Markit's data analysis products and consultants. That means as Palantir grows, IHS will be getting a boost too.

And it also means both companies are getting a slice of the $54 billion growth potential of the Big Data industry as a whole. But IHS Markit is the better play on the sector, even if Palantir was public.

This is because IHS Markit does a lot more than partner with Palantir. IHS's open source intelligence agency offers state-of-the-art research to all of its clients. For example, it compiles and analyzes information involving undisclosed military platforms, systems, and weapons.

IHS also offers the latest information on the best cybersecurity practices for companies to follow. Companies can pay to access its database of cybersecurity best practices or hire a consultant to advise the company directly.

And while IHS isn't necessarily a household name, it's a publicly traded company that is turning a profit. In fact, by year-end 2018, the company saw revenue increase 12% to $4.01 billion. Its net income was $542 million - up 30% from 2017's net income of $417 million. And its Q1 2019 sales growth was up 13% from the same period last year.

This means the company is not only profitable, but has been for a while - in the same exact industry as Palantir. Plus, it certainly helps that IHS and Palantir both help each other out with their integrated data mining services.

Beyond that, IHS shows no signs of its growth slowing down either.

In fact, it's poised to continue growing even higher. IHS's revenue is anticipated to increase by a solid 20% over the next two years.

Its current predicted EPS for 2019 is $2.55 with an expected 13% growth to $2.88 by 2020. Its shares currently trade for $59.37, but they're forecast to increase by almost 20% over the next 12 months.

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About the Author

Daniel Smoot is a Baltimore-based editor who helps everyday investors with stock recommendations and analysis. He regularly writes about initial public offerings, technology, and more. He earned a Bachelor's degree from Towson University.

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