2 Recent IPOs to Buy on the Dip

: ZIM | ZIM Integrated Shipping Services Ltd. News, Ratings, and Charts

ZIM – IPOs are always an interesting asset class as there is considerable upside but it comes with more risk. Recently, IPOs have underperformed, but it could be an opportunity to add two high-quality ones – ZIM Integrated Shipping Services Ltd. (ZIM) and ZipRecruiter (ZIP).

Initial Public Offerings (IPOs) occur when a privately held company lists its shares on a stock exchange, thus becoming “public.”  Companies usually choose to go public to raise money for expansion.

In 2020, there were 480 IPOs, which was an all-time record and more than double the amount of IPOs in 2019. Overall, the performance in IPO stocks was impressive, as evident when looking at the Renaissance IPO ETF (IPO) which more than doubled in 2020.

However, in 2021, the Renaissance IPO ETF (IPO) has been less than stellar, down 3% year to date (YTD).  This underperformance, as well as the recent drop in longer-term rates, is giving investors an opportunity to scoop up shares in recent IPOs. Two of my favorites are ZIM Integrated Shipping Services Ltd. (ZIM) and ZipRecruiter (ZIP).

ZIM Integrated Shipping Services Ltd. (ZIM)

ZIM is an Israel-based provider of container shipping and additional shipping services. It is focused primarily on cargo. The company’s cargo services include breakbulk, out of gauge, project, reefer, dangerous and dry cargo. It is one of the top 20 carriers in the world.

ZIM’s inclusion is also a reflection that in 2021, IPOs are coming from all sorts of industries, while they were concentrated in tech last year. Further, the shipping industry has been a major topic of conservation as ports around the world are backed up. This has led to shipping rates hitting 13-year highs for many categories. 

While the prospects for the shipping sector remain positive, ZIM also stands out among its peers with its forward price to earnings ratio of 6.1. This makes it one of the cheaper stocks in the sector. The company also has one of the lower debt loads and $10 in cash per share. 

Recently, the stock has declined by 25% on global growth concerns which could prove to be a tantalizing entry point. Wall Street analysts are also bullish on the stock as it has a consensus price target of $53.4 which implies a 40% upside from current levels. 

ZIM has an overall B grade in the POWR Ratings. The stock has a B for Quality components and Sentiment. This isn’t surprising given its low debt, high cash levels, and optimism among the analyst community. Investors who would like to learn more about how ZIM fares in the other POWR Ratings components can do so by clicking here.

ZipRecruiter (ZIP)

ZIP is an online employment marketplace. The company provides recruiting, job postings, online interviews, candidate screening, application updates, and job alerts services. It also differentiates itself from other job websites with its AI tools to match employers with the most qualified candidates. 

ZIP went public in late May through a direct listing. The company is obviously benefitting from the recovery in the labor market. Despite a recent spike in coronavirus cases due to the Delta variant, it’s not expected to negatively affect the labor market. Further, many companies have complained about tightness in the labor market and difficulty recruiting qualified candidates. 

This creates an opportunity for ZIP if its technology can match qualified candidates and companies looking to hire. Already, online job postings are above pre-coronavirus levels. This quarter, ZIP is expecting revenue between $157 million and $163 million which would be a 25 to 30% increase from 2020’s Q2 figures. For the full year, ZIP expects revenue between $580 million and $600 million which equates to growth between 39% and 44%. 

ZIP is rated a B by the POWR Ratings which equates to a Buy. This isn’t surprising given its growth potential and tailwind from a tight and recovering labor market. In terms of its component grades, ZIP has an A for Sentiment and Quality. This is consistent with Wall Street analysts’ having a $29.50 price target, implying a 25% upside. Further, 5 out of 6 analysts covering the stock have a Buy rating. 

Discover Today’s Best Growth Stocks

This article was written by Jaimini Desai, Chief Growth Strategist for StockNews.com.  Jaimini has been dialed into the hottest trends in investing:

  • Electric Vehicles
  • 5G
  • Internet of Things
  • Cloud Computing
  • Genomics
  • And Much More

If you would like to see more of his best growth stock ideas, then click the link below.

See Jaimini Desai’s Favorite Growth Stocks

 


ZIM shares fell $37.51 (-100.00%) in premarket trading Wednesday. Year-to-date, ZIM has gained 228.70%, versus a 16.30% rise in the benchmark S&P 500 index during the same period.


About the Author: Jaimini Desai


Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist for StockNews.com and the editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Jaimini’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ZIMGet RatingGet RatingGet Rating
ZIPGet RatingGet RatingGet Rating
IPOGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Should Investors BEWARE this Market?

The S&P 500 (SPY) has been on a tear since November 1st when the Fed started to make their dovish tilt opening the door to future rate cuts. Unfortunately they keep not happening and start date keeps getting pushed further and further out. That has many wondering if stocks are getting ahead of themselves setting things up for a fall. Thus a good time to tune into what investment veteran Steve Reitmeister has to say about the market outlook along with his trading plan and top picks to stay ahead of the pack. Read on below for more...

Top 4 Tech Giants Poised for Explosive Growth

Fueled by the ever-growing demand for advanced technological solutions across various sectors and ongoing innovation, the tech industry has robust growth prospects. Thus, it could be wise to invest in top tech stocks Dropbox (DBX), TTM Technologies (TTMI), Lantronix (LTRX) and AstroNova (ALOT) for potential growth. Continue reading…

3 Top Rated Software Stocks to Streamline Your Investments

The software industry is thriving with soaring demand, presenting ample investment opportunities. So, fundamentally solid software stocks ServiceNow (NOW), Autodesk (ADSK), and Docebo (DCBO) might be ideal buys for promising returns. Read on...

Biotech Investors: Should You Buy, Hold, or Sell Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR)?

Despite facing several challenges, the biotech sector thrives due to growing demand for effective treatments, consistent innovations, and a sustained demand for high-quality drugs and therapies. Let's assess whether one should Buy, Hold, or Sell biotech stocks Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR). Keep reading...

Is the Bull Market Growing Tired?

On the one hand it is fun to celebrate the new highs for the S&P 500 (SPY) that came in this Tuesday. On the other hand...it doesn’t make a lot of sense calling into question the next moves for the stock market. Read on below to appreciate investment veteran, Steve Reitmeister’s, market outlook and top picks to outperform.

Read More Stories

More ZIM Integrated Shipping Services Ltd. (ZIM) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ZIM News