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iRobot: Leading the Revolution in Consumer Robots
iRobot is the dominant provider of home vacuum robots, with an estimated market share exceeding 60 percent around the globe. Since the Roomba began shipping in 2002, iRobot has sold over nine million units, and the category continues to grow, as evidenced by the company’s 15 percent growth rate in consumer robots in the second quarter. The Roomba product line features six models, which range in price (at retail) from $300 to $700. The product features a range of cleaning capabilities, and is sold through a broad range of home retailers, including the most prominent ones in the US. Our recent review of a prominent ecommerce website indicated that iRobot recently held seven of the top eight slots for home robots.
The Roomba 880, the most recent addition to the home vacuum robot product line, is priced at retail for $700 and demonstrates iRobot’s technology leadership. Utilizing revolutionary aeroforce extractors, essentially “bristleless” brushes, the product removes up to 50 percent more dust, dirt, hair and debris, and has 5x more power than previous Roomba models. The Roomba 880 is the company’s fastest selling vacuum robot model, accounts for more than 25 percent of sales—despite its higher price point relative to other Roomba models—and features higher gross margins than other models.
The Roomba accounts for an estimated 90 percent of iRobot’s consumer product sales. iRobot also sells robots for floor mopping and floor scrubbing. Floor mopping robots, acquired via Mint a couple of years ago, have since been re-branded as the Braava product line. Although these models have generally not been as successful as the Roomba, they are growing. Other home robots include the Looj gutter cleaning robot, and Mirra pool cleaning robot.
Defense and Security Robots May Present New Opportunities
For the first ten years of its corporate history, iRobot focused primarily on robots for defense and security missions, including the PackBot, a tactical mobile robot which rescue workers deployed at the World Trade Center following the September 11, 2001 terrorist attacks. The following year PackBot was deployed with US troops in Afghanistan. In 2004, IRBT began development of a small unmanned ground vehicle, dubbed the SUGV, which has been used in US combat missions in Iraq and Afghanistan. As recently as 2011, defense and security robots accounted for 40 percent of the company’s revenue.
iRobot continues to see lackluster growth in this sector, though visibility appears to be improving. We are forecasting that D&S will contribute roughly seven percent of sales for 2014. Sales to the US DoD account for about half of the D&S business, and other markets include the sale of defense and first responder robots to Canadian, European, Latin American, and Asian governments. Disaster recovery is an important market opportunity, and, as we understand it, the company’s robots are still being used in Japan for post recovery cleanup of its nuclear reactor disaster.
Remote Presence Robots on the Horizon
iRobot is in the earliest stages of pioneering a new market for remote presence robots. Applications have been developed for telemedicine and team collaboration. iRobot’s RP-VITA allows physicians to diagnose patients from remote locations. The product is sold by InTouch Health. The Ava 500 video collaboration market is sold through Cisco Systems’ (NASDAQ: CSCO) reseller channel. Early use cases for the Ava 500 include enterprise team collaboration, where the robot can follow team members from room to room, rather than remaining stationary in a conference room. Other uses include customer briefing centers, clean rooms, corporate training, and manufacturing, for remote shop floor inspection. The new robots appear to be at least a year away from significant customer adoption, though the technology holds much promise for consumer applications.
Competition
iRobot continues to dominate the $250 plus market for consumer robots, through its Roomba, Braava and Mint product lines. We believe this is the largest segment for home robots based on our review of ecommerce data. iRobot has little competition in this market in the US, save for Neato, a privately-held company. Elsewhere, the company faces indigenous competitors, such as Dirt Devil’s Free Time hard floor robot vacuum cleaner in the UK. This robot retails for the equivalent of roughly $130, providing competition at the low end of the market.
About a month ago, Dyson, the large UK based manufacturer of premium upright vacuum cleaners, hand dryers, heaters, and bladeless fans, announced its 360 Eye, its first ever robot vacuum cleaner. The product, which is to be released in Japan in the first quarter of 2015, with no time table yet stated for Europe or the US, is a vision-based robot equipped with a camera, and operates on a lithium ion battery with an unknown charge time. The product allows for remote scheduling via iPhones and Android devices, and will be priced at the retail equivalent of about $1,000 US.
The 360 Eye is evidently the result of a multi-year, multi-million dollar investment by Dyson, a company which had, at one time, been dismissive of the opportunity for home robots. Our view is that the product will no doubt provide iRobot with competition in Japan, which accounts for 20 percent of iRobot’s sales in any given quarter.
Dyson’s 360 Eye will sell at a 25 percent price premium to iRobot’s highest priced robot, and is well more than twice the price of many of iRobot’s models. It remains unclear when the product will reach the US and Europe, though we are sure Dyson has plans to enter these markets. At this time it is unclear whether Dyson has violated any of iRobot’s 300 overseas patents, which do not expire, according to our understanding until at least 2021. iRobot’s models allow for scheduling at various intervals during the day, though it does not yet offer remote scheduling via mobile devices. While it remains unclear whether Dyson’s cyclone suction technology or iRobot’s revolutionary aeroforce extractors will win the day, we expect a spirited battle.
Conclusion
iRobotcontinues to see solid growth from its Roomba line of home vacuum robots, in which it holds a dominant market share. A new version of the Roomba combined with other new and recently introduced home robots underscore the progress the company is making to expand its global footprint. Other consumer robots already on the market and presumably roaming around in its R&D labs also carry potential. The company’s defense and security business remains soft, though it has been down-sized to a near break-even level, and will contribute less than 10 percent of sales. It may yet stage a rebound, which would give the Bedford Massachusetts robotics pioneer two solid legs on which to stand.
Proto Labs: Responding to Customers or Competitors?
Founded in 1999 and headquartered in Maple Plain, Minnesota, Proto Labs (NYSE: PRLB) is a leading provider of quick-turn custom-manufactured parts. Along with companies that make 3D printers, Proto Labs has helped to spark a renaissance in American manufacturing. With an emphasis on CNC machining and plastic injection molding operations, bolstered by an easy-to-use online platform, Proto Labs delivers custom parts with fast turn around times to customers that need prototypes or limited production runs of key products. Turn around times can range from one to 10 business days, depending on the complexity of the part and the quantity ordered.
Proto Labs has become a trusted supplier to its customers, which include manufacturers of medical devices, cars, aerospace, defense, and aviation products, industrial machinery, and consumer products, including electronics. Proto Labs registered a five-year compound annual growth rate of over 25 percent through the end of 2013.
The rapidly falling prices and enhanced capabilities of 3D printers threaten, to some extent, longer term demand for outsourced, quick-turn manufacturing and rapid prototyping services, since customers can make more prototypes in house. And while Proto Labs’ services were once distinct from the prototyping services of Stratasys and 3D Systems, the use case for various services has become blurred. Furthermore, Stratasys and 3D Systems are taking their services businesses more seriously than in the past, as both growth and profit engines.
As a result Proto Labs has abandoned a service positioning exclusively focused on CNC machining and plastic injection molding, and now offers 3D printer prototyping services for both prototypes and limited production runs. Thus, Proto Labs has responded to both customer requests for 3D part production, as well as the increased emphasis that its competition has placed on quick-turn services.
Our view is that Proto Labs continues to serve a large, healthy growing market, but that competitive developments will need to be monitored. Overall we see Proto Labs as a well managed company, with a strong margin profile currently. We see growth ahead for the Minnesota company, though we believe its valuation is fairly rich at this point (roughly 35x fully-taxed 2015 EPS, and 10x 2014 EV/Sales) and may not fully reflect the impact of increased competition.
PetMed Express: an Investor’s Best Friend?
With annual sales of $233 million and over 2.6 million active customers, Pompano Beach-based PetMed Express (NASDAQ: PETS) is the largest pet pharmacy in America, and a leading online provider of medication, nutrients, and health-related supplies to pet owners and their dogs and cats. Leveraging the trends toward online commerce, an aging pet population, and the impending shift from topical medication to prescription pills, PetMed focuses on the health management needs of its customers’ pets. About 45 percent of sales comes from prescription medication, 45 percent from health-related products, and 10 percent from pet lifestyle products.
Health-related trends in the pet population mirror trends affecting their owners. These include rising levels of life expectancy, yet greater presence of disease and chronic conditions such as obesity, thyroid, and arthritis. Like their human companions, pets are benefiting from greater awareness of the impact of a nutritional diet.
A key factor impeding PetMed Express’ sales growth over the last couple of years has been the emergence of numerous brick and mortar and online retailers that have expanded their efforts in the pet health category, seizing upon an obvious area of consumer interest. PetMeds’ strengths include the ability to fulfill 80 percent of prescription orders through an online customer care group, at prices that range from 10 to 50 percent below veterinarians’ prescription medication prices. PetMeds boasts an 80 percent one-day turnaround time on orders, and an 80 percent reorder rate among customers. PetMeds’ highly efficient operations yield over $1 million in revenue per employee, which enables it to achieve a 12 percent operating margin, 20 percent higher than PetSmart, its closest publicly-traded peer, despite a dramatically lower sales volume. That said, competition ranks as the number one impediment to PetMeds’ near-term growth.
An experienced management team has been focused on identifying areas of profitable growth for the company, including a greater emphasis on higher margin prescription drugs. Newly introduced creative advertising may help to generate sales to new customers, an area which has been growing at a slower rate in the last year. While the company develops a profitable growth strategy, investors can draw upon a dividend, which has increased steadily over the last several years. Its current yield is 4.4 percent.
PetMeds’ core competencies in online distribution, customer service, efficient inventory management, and advertising, combined with a 2.6 million pet owner active customer base, and solid balance sheet make it an under-valued asset, one which we believe will grow in value over time.
Oculus VR: More than Meets the Eye
On Tuesday, March 25th, Facebook announced the $2 billion-plus acquisition of Oculus VR. Based in Irvine, CA, and founded in 2012, Oculus has been working to create a mass market virtual reality headset, which can be utilized to enhance the videogame experience. The brainchild of appropriately-named Palmer Luckey, Oculus has already created a successful developer tool kit, replete with a prototype headset, cables, power supplies, software, and lenses, and has sold over 60,000 copies thus far, according to the Wall Street Journal. Prices range from $300 to $350 per tool kit.
The strategy seems to be to get the tool kit into developer hands, gain feed-back on the product, and then create a consumer headset, already dubbed the Rift, which will be targeted to the large mass of video game users, four million of whom have purchased the Sony Playstation in the last several months.
The headset will feature ultra stereoscopic 3D rendering, a large field of view, as well as “ultra low latency head tracking,” according to the company’s founder. All of these features are designed to provide a more realistic, immersive, 3D experience than other products on the market, none of which have achieved critical mass. Oculus’ strategy is to provide an extremely affordable yet high quality device, which is already being assisted by breakthroughs in high density displays, and ultra lightweight sensors. Funded by several prestigious VC firms who have provided over $70 million in financing, Oculus is set to ship the second iteration of its software developer tool kit sometime in July.
The $2 billion acquisition includes $400 million in cash, approximately $1.6 billion in stock, and a potential earn out of $300 million, assuming certain milestones are met. Facebook CEO Mark Zuckerberg sees larger plans for the company as a social platform that might include the potential for doctor patient consultation, online learning, virtual vacations, and sporting events. We think it is highly plausible that Oculus caught the attention of other consumer-oriented tech companies, including Microsoft, Google, and Apple, but may have been persuaded that its best chance to develop a mass market device would be to link up with Facebook. No doubt, the company’s VCs had strong thoughts about the valuation. If published reports regarding the sale of 60,000 developer toolkits are true, it seems plausible that Oculus generated over $18 million in revenue in the last year.
John Chen’s Challenge
As BlackBerry (NASDAQ: BBRY) refines its mission of “pushing the boundaries of mobile experiences,” all eyes will be upon 58 year-old John Chen, who has been named interim CEO.
Mr. Chen, who hails from a modest upbringing in Hong Kong, and lived in New England for several years, where he attended the Northfield Mount Herman school on the banks of the Connecticut River, and graduated with a EE from Brown University in 1978. He then headed West to receive his masters in electrical engineering from the California Institute of Technology the following year.
John Chen began his career at Unisys, (the merger of mainframe computer companies Burroughs and Sperry) as a hardware engineer, and later became president and COO at age 38 of Pyramid Technology Corporation, a fast-growing computer company, based in San Jose, California, started by former HP engineers, and a pioneer in Reduced Instruction Set Computing. After Siemens acquired Pyramid and merged it into Siemens Nixdorf, Chen became president and CEO of Siemens Nixdorf’s Open Enterprise Computing Division in 1996.
A year later he joined Sybase, as president and CEO. Sybase, at one time, was the youngest and fastest growing database software company in the world, and a perceived challenger to Oracle for technology leadership. A series of management missteps pertaining to its products and technology, misleading financial statements, and ultimately lost investor credibility, led to a multi-year phase of purgatory—not unlike that experienced by BlackBerry.
This set the stage for a turnaround, which was led by John Chen, after he assumed leadership of the company in 1997. Under his leadership Sybase reemerged as a provider of data warehouse and other analytics software, mobile data management, messaging and virtualization technology. And the company recorded 55 consecutive quarters of profitability. In May of 2010 SAP AG the German enterprise applications software giant acquired Sybase for $5.8 billion, thus filling a gaping hole in its own product line, and better positioning itself as an Oracle competitor.
Among the myriad challenges facing John Chen and the management of Blackberry is what to do with the company’s smart phone and tablet business, which has steadily lost market share to long-standing competitors and up-starts. The company’s software challenges are no less daunting, although the company possesses solid mobile and security assets. Blackberry also benefits from several thousand patents relating to mobile devices, software, and security, and these are sure to be powerful assets in the future.
All in all, John Chen’s challenges exceed those that he faced upon joining Sybase some thirteen years ago. It will be interesting to see whether his interim position is followed by a more permanent one in which he can reestablish the leadership once held by the venerable Canadian company.
Constant Contact Still Flying Below the Radar Screen
Constant Contact (NASDAQ: CTCT) of Waltham, Massachusetts is the category leader in email marketing software, with a cloud-based subscription software service that helps over 550,000 companies mount effective marketing campaigns, and maintain a continuous line of communication with customers and prospects. Though the company lost focus last year with an over-exuberant thrust into the social media market, Constant Contact, has, in the last several quarters returned to a more disciplined sales approach, and has added over 10,000 gross new customers in each of the last two quarters. We think it highly probable that CTCT will end 2013 with close to 600,000 active customers.
Constant Contact targets more than 20 million small and mid sized businesses in the U.S., as well as non-profits, including trade associations, schools, churches, hospitals and libraries. Constant Contact’s core email marketing product improves the quality and frequency of interaction with customers, constituents, and prospects, while reducing the costs associated with expensive, and often wasteful direct mail.
Three years ago Constant Contact offered only one product, email marketing, but now has six: online surveys, event marketing, social media marketing, local deals, and digital storefronts for small businesses. Each of these products target large addressable markets inside the company’s existing customer base, as well as new segments, which are receptive to the company’s affordable pricing. The new products have thus far been modest revenue contributors, yet signs are pointing in the right direction, as the company has demonstrated that its customer retention rate is 20 percent higher among customers that opt for two or more products, and 40 percent higher among customers who subscribe to three or more products.
CTCT has been slow to address overseas markets, but its products are used in the English language in over 100 countries. We believe the company will have a large addressable market overseas once it begins to roll out foreign language versions of its products.
Constant Contact, despite having made a dilutive acquisition, which cost the company over $65 million in cash, maintains a stellar balance sheet with nearly $100 million in cash, no debt, and negligible receivables. The company anticipates generating over $20 million in free cash flow this year, and not long ago initiated its first-ever share repurchase program, with an authorization for $20 million.
Constant Contact’s improving prospects coincide with a recent acceleration of M&A activity in the marketing automation sector led by Salesforce.com’s purchase of ExactTarget, and Oracle’s recent acquisition of Eloqua. Constant Contact’s large installed base, improving business model, growing portfolio of products, and untapped potential at the mid-range of the email marketing market are among its most alluring attributes, which may yet lift it above, rather than below many investors’ radar screens.
Amazon.com: Streaming for Success
As part of its mission to provide planet earth with the largest selection of consumer products and services, Amazon.com launched Amazon.com Prime Instant Video in February 2011. The $79 per year annual service, an extension of its Amazon Prime two- day shipping program for all Amazon purchased goods, now features over 36,000 movies and television shows that can be streamed to its customers’ video devices, at no additional cost. In its most recent quarterly letter to shareholders, Netflix, Amazon.com’s most significant streaming competitor, indicated that of its top 200 most popular television shows and movies in the fourth quarter, Amazon.com offered 37 percent of these to its viewers. This overlap has risen from zero two years ago, and is the highest level of overlap among Netflix’s key competitors.
Amazon.com. like Netflix, has recently become more interested in proprietary content that can be displayed only to Amazon.com Prime Instant Video customers. Toward that end Amazon.com recently added FX crime drama Justified to its expanding line-up of exclusive content. Amazon has also announced exclusive agreements with PBS for Downton Abbey, and the CBS series Under the Dome, based on the Stephen King novel, and produced by Stephen Spielberg. Through Amazon Studios, an original movie and series production arm of Amazon.com, Amazon currently has 11 min-series in either trial or production mode, including five children’s series, and six comedy pilots. Amazon intends to air the productions on Amazon Instant Video, Prime Instant Video, Lovefilm UK and Germany (an Amazon.com subsidiary), where customers will pay no additional cost to view them. Amazon intends to gather feed-back during the pilot mode to determine further funding.
Amazon.com briefly experimented with a monthly subscription service in November of 2012 in advance of the holiday shopping season, but mysteriously pulled it after two weeks, preferring to keep Amazon Prime an annual, rather than monthly subscription service. A major motivating factor for Amazon.com may have been its desire to avoid getting stuck with a massive shipping bill during its seasonally strong fourth quarter, which ultimately revealed a declining rate of sales growth, which, in turn, has upped the ante on succeeding with its streaming strategy.
Illumina – Driving Next Generation Sequencing
Personalized medicine is the massive market opportunity next generation sequencing (NGS) offers. The market was about $28 billion in 2011 and dominated by tissue tests to determine drug therapy decisions. The opportunity lies with the ability to generate targeted medicines based on virus/disease composition or individual human genomes. Unfortunately, cost and lack of analytical abilities have acted as impediments to the expansion of this technology into the clinical diagnostics, pharmaceutical and other applied markets, but progress is being made. From a cost perspective, NGS equipment designers have successfully reduced the cost of sequencing a complete human genome to sub-$5,000, from $1 million in 2007. The consensus is that once the price hits or goes below $1,000, the technology will be fiscally viable for more commercial and industrial applications.
One step in this direction has been the desktop analyzers offered most notably by Illunina (NASDAQ: ILMN) and Life Technologies (NASDAQ: LIFE). These instruments are about a sixth of the cost of the higher-end models and are of increasing interest to clinical customers. Both companies have plans to seek FDA approval, with Illumina expecting to submit its request with a specific assay method by the end of 2012. Consumables pull-through appears to be a healthy $55,000, although the sample size is small at this point.
In an effort to reduce the data-interpretation-headwind, Illumina has announced plans to launch five targeted content sets. These consumables were designed by experts to offer streamlined, targeted sequencing for specific genetic diseases or conditions. The targeted conditions include autism, cancer, cardiomyopathy, inherited disease and exome (genetic diseases). The products are only for laboratory use. Shipments begin in Q4 2012. These standardized sets should help advance the analytical abilities of researchers delving into each condition.
Illumina has also teamed up with Partners HealthCare to speed up clinical interpretation. Together they will offer medical geneticists and pathologists infrastructure and networking tools to support the analytics and reporting processes for genetic sequencing data. The companies are combining Illumina’s MiSeq analyzer with Partners’ GeneInsight suite of IT solutions for streamlining analyses and reporting of genetic test results. GeneInsight is FDA approved. The new tools will link to Illumina’s BaseSpace cloud-storage product enabling analysis of the stored data.
Another initiative Illumina has launched is its BaseSpace cloud-storage offering. The service will take genomics data and store it in a cloud-based system for easy sharing and analyzing. This bioinformatics product gives Illumina a key differentiator, as well as a new revenue stream and a way to help move past the data interpretation issue. Illumina will offer one terabyte free, then charge $250 a month for each additional terabyte, or $2,000 for the year. It also offers a 10 terabyte package that runs $1,500 a month, or $12,000 a year. The service will enable clinical customers and smaller research laboratories to avoid having to invest in their own expensive data warehouses. Illumina is also launching an app store for the BaseSpace that will enable researchers to develop analytical tools and sell them through the store, with Illumina taking a 30 percent cut.
Finally, Illumina has announced an addition to its whole genome sequencing service. The company will now offer a “RapidTrack” service that will expedite the sequencing of whole genomes that customers send to the company. Using the new HiSeq 2500, which is capable of sequencing a complete genome in one day, Illumina will now be able to return data sets to customers in less than two weeks. This high-end offering is much improved from main competitor, Complete Genomics, which can take three months or longer to return the completely sequenced genome. We believe this service offers another means to spur the adoption of sequencing techniques in new markets.
Two startups working to speed the process to achieve personalized medicine are DNAnexus and Bina Technologies. DNAnexus also offers a cloud-based service much like Illumina’s, positioning itself between researchers and the sequencing facilities. Bina Technologies is working on software to reduce the 300 gigabytes of information from each complete genome sequence, to a more manageable level. The company reduces the information into profiles, which are more easily uploaded to cloud-systems and are simple to share and manage.
While headwinds still remain, the push towards developing the ultimate market for NGS appears to be more at the forefront of sequence equipment manufacturers than ever before. We believe this bodes well for the long-term outlook for the industry.
Battle Road Research Announces the Battle Road IPO Review
PRESS RELEASE
Wednesday, September 19, 2012
Battle Road Research Announces
the Battle Road IPO Review
A Monthly Survey of Growth-Oriented IPOs
(WALTHAM, MA) Battle Road Research (www.battleroad.com), an independent stock research firm, has launched The Battle Road IPO Review, a monthly survey focused on the prospects of more than 150 growth-oriented companies that have come public in the last five years. The first issue features stocks across seven sectors: internet, software, hardware, consumer, business services, and manufacturing.
“Our clients tell us they are interested in seeking out new investment opportunities, particularly from among companies that are relatively new to the public markets. As a research-only firm, without an investment banking axe to grind, we are in a unique position to assess the prospects of many of these growth-oriented companies,” according to Ben Z. Rose, President of Battle Road Research.
From its proprietary database of growth-oriented IPOs of the last five years, Battle Roadanalysts utilize qualitative and quantitative measures to help its clients screen for investment opportunities across a range of technology, consumer, business services and manufacturing stocks. The initial focus of the Battle Road IPO Review is on long-oriented ideas. 90 percent of the companies are below $5 billion in market cap, as of mid September, 2012. The Battle Road IPO Review is available in hard copy or directly from Battle Road Research’s website at www.battleroad.com.
Established in 2001,Battle Roadis a research-only firm, not an investment bank, not a broker dealer, and not an asset manager. Unlike Wall Street and regional investment banks, who are paid by the companies they research,Battle Roadhas never accepted compensation from any company that it researches.
“As we set out in search of investment ideas for our clients, we trust that the Battle Road IPO Review will be a helpful addition to our clients’ stock-selection process, and will help further our reputation as a credible stock research company, free from the influence of investment banking,” Rose concluded.
About Battle Road Research
Battle Road Research provides fund managers and analysts with an independent voice on technology, and consumer stocks. Our research process combines rigorous financial analysis with insights gleaned from industry sources. We present our findings in straight-forward Buy, Hold, or Sell research reports. The Battle Road IPO Review is a monthly survey focused on the prospects of over 150 growth-oriented IPOs of the last few years. Since our founding in 2001 we have refrained from investment banking, company-paid reports, and personal investment in the stocks we research.
Media Contact:
Ben Z. Rose, President,Battle RoadResearch
781-894-0705, ext. 204
[email protected]
The Battle Road IPO Review
A Monthly Screen for New Ideas
October 13, 2014
Research on companies which have come public in the last several years is available mostly from the investment banks who were paid by the companies during the IPO process. This leads to a conflict of interest as the investment bank seeks to please the owners of the company, as well as provide an objective assessment of the company’s growth prospects to investors, the other group of clients whom the bank serves through its brokerage arm.
This conflict continues long after the IPO is complete, for once a company becomes public, investment bankers and analysts who played a role in the IPO may advise the company on future stock offerings, mergers and acquisitions, and customized plans for insiders to sell their stock.
As a research-only firm, Battle Road is focused on helping asset managers seek out stocks to buy and stocks to avoid, without the conflict presented by conducting business with the subject of its research. Since our founding in 2001, we have remained true to this principle.
The idea for the Battle Road IPO Review originated with one of our clients, a portfolio manager, who sought our help in seeking out solid companies with sustainable competitive advantages –and reasonable valuations—from among the many companies which have come public in recent years. Using quantitative and qualitative measures we developed a methodology for screening for new buy ideas.
The Battle Road IPO Review has become a monthly service that screens for new ideas from a uniquely designed universe of over 180 growth-oriented IPOs of the last seven years. The universe includes software, internet, computer hardware, cyber security, consumer, and business services companies. The median market cap. in the Battle Road IPO universe is $1.1 billion. The universe is rapidly growing with the addition of newly-minted IPOs on a regular basis.
We rank order the stocks by group each month and call out names for further exploration, based on our assessment of the company’s strengths and weaknesses, as well as other measures which include our interpretation of the company’s current valuation, balance sheet, quality of earnings, and other metrics. We draw upon these metrics, as well as qualitative factors to determine our monthly Exploration List, which is a sub-set of all stocks that we believe should out-perform the overall coverage universe. The Exploration List is therefore a screening tool for new ideas. We strive to develop a list that features both growth and value-oriented stocks. Our goal is for the median stock performance of the Exploration List to exceed the median stock performance of the coverage universe.
Our clients use the Battle Road IPO Review to:
- Screen for new stock ideas;
- Consult an independent source on growth-oriented IPOs, free from the influence of company management and investment bankers;
- Keep apprised of the Exploration List of long-oriented ideas selected by Battle Road;
- Stay abreast of the best and worst performing sectors, and best and worst performing stocks in each sector;
- Keep current on recently-minted IPOs;
- Identify broken IPOs which have fallen off Wall Street’s radar;
- Discover and track over-heated IPOs prior to their pull-backs;
- Screen for meetings with company management at investor conferences;
- Listen in on a monthly dial-in call to keep current on Battle Road’s research findings.
<<Request a Copy of the Battle Road IPO Review>>
About Battle Road Research
Battle Road Research provides fund managers and analysts with an independent voice on technology and consumer stocks. Our research process combines rigorous financial analysis with insights gleaned from industry sources. We present our findings in straight-forward Buy, Hold, or Sell research reports. In addition, we publish The Battle Road IPO Review, a monthly screen for new ideas that examines the prospects of more than 180 growth-oriented IPOs of the last seven years. Since our founding in 2001 we have refrained from investment banking, company consulting, company-paid reports, and personal investment in the stocks we research.
Battle Road Research was one of the first eleven members of the Investorside Research Association, www.investorside.com, the only trade group that certifies its members are free of investment banking, consulting, and research for hire conflicts.
