How do I find out if a business is going on the public stock exchange?

sabretoothtigger

Standard life shares were cheaper to buy after the ipo then on the first day of trading. Eventually they rose but at first they entered a market doubtful of insurers I think and the better price came later.
Maybe theres no special information needed. What usually happens is the big money in the city has the inside line on shares, certainly every day they seem to get the best prices on shares before 8am . The real way the small investor makes money is defying sentiment trends in risk & reward.

Its only after everyone has passed the deal by as unwanted thats when the retail investor at the end of the line gets to have his say of is this price reflective of company potential


I think every IPO must have 20% free float of shares ? Rbs apparently is on the verge of being unnavigable as a public company since most of it is government now.
Free float would still put the retail investor on the outside.
Most common exception is a massive company issue of shares that need all the money they can get even the sparse dregs joe public offers

Right now lloyds just flooded the market with shares, biggest rights ever. Thats a kind of opportunity available to even a retail investor I think. Of course if it was without risk some big money would have already snapped it up

http://moneyterms.co.uk/free-float/

xyy123

sabretoothtigger wrote: »

Right now lloyds just flooded the market with shares, biggest rights ever. Thats a kind of opportunity available to even a retail investor I think. Of course if it was without risk some big money would have already snapped it up

Share prices are basically determined by supply and demand. All other things being equal, share buybacks = bullish; share placings and issues = bearish.

boltneck123

I have to say wow, there are some in depth replies there, well from my perspective anyway. However I understand a bit more of it now though since I've been doing a little reading, I bought a book called "Shares Made Simple - A Beginner's Guide to the Stock Market" By Rodney Hobson. A great little read so far I'm a 3rd of the way through and have already read about some of the stuff mentioned in these replies.

To make this easier, should I just come out and explain what I was thinking in the first place? The reason I didn’t before was because, well I'm not sure, perhaps embarrassment.

At the moment I work part time at a company called B&M Bargains Ltd, it's clear to see from the name they are a bargain shop. However the store I work at and all others have reported amazing sales figures over the past year, the store I work at for instance takes around £100k a week during any normal time of the year. Not as much as say a Tesco store, but compare that £100k to the takings of what £-Stretcher gets down the road £25-30k, we are doing quite well.

The company is expanding quite quickly and is aiming to open a substantial amount of stores over the next few years, in my interview early this year I was told around a 100 I think, I forget the number exactly to be honest but it was around 100.

I work there part time while I'm at university, and while at university, I want to save any money that I can, make some investments, hence all the stock market studying, and aim to buy my first home in about 3-4years time, or at least put a deposit down for it.

So that’s why I want to know how to find out about a new company coming on the stock market, so I could buy shares in B&M Bargains, I believe the company is going to do really well. Ok I understand the tiny bit of info I’ve provided about the company isn’t much to go on, I wouldn’t make an investment just on that, but I would do my research, and also just working there helps, you would not believe how many customers we have, come into a bargain shop!

Ok so there it is, don’t be too harsh on me, if any of that makes sense to you obviously.

Kind Regards,

Ben.

ses6jwg

Looks like B&m are privately owned.

Thrugelmir

boltneck123 wrote: »

I have to say wow, there are some in depth replies there, well from my perspective anyway. However I understand a bit more of it now though since I've been doing a little reading, I bought a book called "Shares Made Simple - A Beginner's Guide to the Stock Market" By Rodney Hobson. A great little read so far I'm a 3rd of the way through and have already read about some of the stuff mentioned in these replies.

To make this easier, should I just come out and explain what I was thinking in the first place? The reason I didn’t before was because, well I'm not sure, perhaps embarrassment.

At the moment I work part time at a company called B&M Bargains Ltd, it's clear to see from the name they are a bargain shop. However the store I work at and all others have reported amazing sales figures over the past year, the store I work at for instance takes around £100k a week during any normal time of the year. Not as much as say a Tesco store, but compare that £100k to the takings of what £-Stretcher gets down the road £25-30k, we are doing quite well.

The company is expanding quite quickly and is aiming to open a substantial amount of stores over the next few years, in my interview early this year I was told around a 100 I think, I forget the number exactly to be honest but it was around 100.

I work there part time while I'm at university, and while at university, I want to save any money that I can, make some investments, hence all the stock market studying, and aim to buy my first home in about 3-4years time, or at least put a deposit down for it.

So that’s why I want to know how to find out about a new company coming on the stock market, so I could buy shares in B&M Bargains, I believe the company is going to do really well. Ok I understand the tiny bit of info I’ve provided about the company isn’t much to go on, I wouldn’t make an investment just on that, but I would do my research, and also just working there helps, you would not believe how many customers we have, come into a bargain shop!

Ok so there it is, don’t be too harsh on me, if any of that makes sense to you obviously.

Kind Regards,

Ben.

Focus on profit and cashflow. Not sales.

xyy123

Thrugelmir is right.

Plus consider that we are/have been in a recession and its natural that bargain shops will do well in a recession (or better than average) so such growth may not be sustainable. Also consider that companies go public as a means of raising capital to invest in the business - they are giving away ownership for money. B&M sound like a pretty cash generative business so why do they need other money? Presumably so they can expand faster than they can through cash generation. If this is the case, then the issue of whether to invest in it (if you can) comes back to the first question - is the growth possible and sustainable?

Furthermore, consider the role of the corporate advisor to the firm going public. Its in the interest of the bank underwriting the shares to make the IPO as much as possible, potentially based on unrealistic earnings estimates, growth forecasts. Investment banks won't underwrite shares in a firm and at the same time say the firm has no hope. So if you were able to get in on the IPO, or early on, you still need to do your research on the basics - growth forecasts, earnings estimates, P/E ratios etc. and see if the price and earnings estimates are realistic. Forward P/E ratios are considered as a good indicator into how investable a company is - basically analysing how much you are paying, per share, for that company's projected profits per share.

ses6jwg

Thrugelmir wrote: »

Focus on profit and cashflow. Not sales.

Indeed.

I used to work in Woolworths and their turnover was huge.

Shame about the 365million debt.

boltneck123

Hi all, Happy New Year.

Yes you are right ses6jwg B&M is a private company, I learnt that after hours of research, and I bet there was a simple website that I could have gone to, to get all the info I needed, instead of wasting a few hours. Never mind.

Thanks for the advice Thrugelmir, I just finished a chapter in my book last night about analysing company’s finances, so I now know a little more about that, but I imagine only the tip of the iceberg.

Thank you xyy123, I do believe you are right, I’m quite sure you just are right but since I have about 0.0001% experience so far in the stock market all I can do is believe you are right until someone else says otherwise. However have you considered the growth may be sustainable even after the recession, because of the way stores have revealed their hands, I feel at least.

For instance I will take a random high street chain, Argos, and a random product Hair Straightens, and give them a random price that they may usually sell them for, £150. So they are ones amongst the top brands.

Last Christmas the consumer and this Christmas has seen 70-90% off sales, some prices even cut before exams, so lets say Argos knock 70% off, selling them for £45. Any average Joe has to stop and think, hang on a minute how much profit are they making out of me, I should just always purchase at the bargain shop any time of the year since they are always cheaper than the other stores, not making ridiculous amounts of profit, and I pocket the savings. (B&M do sell some random crap, but the vast majority of stock is branded stuff).

Am I making any sense, I’m not arguing here, I’m just trying to put down my train of thought, to see if I have any valid ideas.

Kind Regards,

Ben.

ses6jwg

Personally I think the "Bargain" shops will continue to do well for a number of years.

With more job cuts on the horizon and the prospect of a Tory government, I predict a few more years of austerity.

B&M are also picking up the Woolworths slack.

Woolworths turned over a lot of money, unfortunately its business model was completely obselete and that ate away all the profit.

sabretoothtigger

Unfortunately bankruptcy is necessary for capitalism to work. So long as things like pensions are preserved I think it can do alot of good in the long run