Finding winners in the stock market isn't easy, and finding superstars is even harder.
But Money Morning Executive Editor William Patalon, III, is an expert at finding both.
Beyond Meat Inc. (NASDAQ: BYND) has proven to be a "superstar" investment. The stock soared 163% on its first day of trading on May 2, making it the best initial public offering (IPO) of the year. Priced at $25, BYND shares opened at $46 and ended the day at $65.75.
But unlike other IPOs that surge on their first day and then tumble back to earth, Beyond Meat kept rising – at one point soaring more than 150% higher than its first-day closing price.
How to Know Which IPO Is a Buy
Bill told his Private Briefing subscribers to buy on day one.
Those that did made a tidy profit. If you had put $1,000 into BYND stock on the day of its IPO at the closing price of $65.75, you would have seen that investment grow to as much as $2,500 in less than two months.
Bill's subscribers were well-prepared to make that move. He wrote about the company several times in his newsletter in the six months leading up to the IPO. Writing about companies that aren't yet publicly traded is not something Bill does very often.
But there was something special about Beyond Meat.
"I rarely recommend IPOs to my subscribers – my experience is that retail investors rarely get into the best ones at the offering price, meaning they end up chasing them in the aftermarket and thus overpay," Bill told me. "But I'll break that rule when I find a company that has truly exceptional long-term growth prospects."
Beyond Meat is not the only pre-IPO "home run" that Bill has hit. For instance, he recommended Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA) before its IPO in 2014. Alibaba is up more than 80% since then.
But while Bill's Private Briefing subscribers have done well, imagine how well they could have done if they were able to buy into these companies when Bill first started writing about them – months before their IPO?
The Holy Grail of Startup Investing
Beyond Meat received its last round of venture capital funding in November 2018, just before Bill started writing about the company. It was valued at about $1.35 billion.
When BYND shares closed at $65.75 on that first day of trading, those investors – among the last to get in before the IPO – had enjoyed gains of 185%.
If they continued to hold as Beyond Meat peaked in the following weeks, their gains would have ballooned to 640% – much higher than the 150% gain Bill's subscribers had.
But regular investors had no way of buying into Beyond Meat prior to the IPO.
That privilege was reserved for venture capitalists and well-heeled angel investors such as billionaire Bill Gates and Hollywood celebrity Leonardo DiCaprio. Both celebrities invested in Beyond Meat long before the IPO – and walked away with gains that dwarfed the 640% the late-round investors banked.
But recent changes to the law have given retail investors this same kind of "early access" to what can be explosively profitable startup companies.
In fact, anyone can become an angel investor now with as little as $50.
It's why Neil Patel, one of the most successful angel investors on the planet, just launched the Angels & Entrepreneurs Summit. Today, he's walking everyone through the "1,000x formula" for finding the most successful startup investments – the ones with unicorn potential. With this formula at your disposal… investing in startups could get a whole lot easier. Click here to learn more.
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.