2017 closed out the year with IPO stocks having their second best year in over 10 years. As a whole, if you invested in every IPO stock for 2017 you would have a portfolio with a 26% gain. 2013 is the first year looking back that beats this with a 41% gain. Looking back on the best sectors for IPO's last year, what can we expect in 2018?
The best sector for IPO's in 2017 was Industrials with a 41% gain on the year. Health care came in at 35% and Tech was a strong 31%, though it did get off to a rough start. Consumer staples was the worst performing space with a 41% loss on the year which is simply due to investors appetite for reasonable risk.
In 2018 many expect the same from IPO investors. Though there are lots of unique offerings to choose from, investors will not jump at rich valuations.
There are expectations that the number of filings in January will break records which would be a great way for the IPO markets to kick things off. As with anything else, investors follow attention and if the IPO markets are commanding the attention, expect 2018 to be a strong one.
As for this week there are no new issues which is common for the first week in January. Typically it is a shortened week and investors are all focused on the New Year re-balancing which would be more exaggerated this year thanks to tax reform.
A little patience this week and by next week the IPO markets will be back in full swing. Happy New Year!