SchusterWatch #773 (2/3/2025)
New Generation of stocks leads IPOX® to record big January returns.
IPOX® 100 U.S.: +9.80%; IPOX® Intern’l: +8.11%; IPOX® 100 EU: +7.83%
Robinhood tops ranks with +39.43% monthly jump. ALAB sheds -25.33%
102 global IPOs raise $8.6B in busiest January since 2022. U.S. offers lead.
IPOX® MONTHLY REVIEW: Stable rates, a generally supportive economic backdrop and correct positioning into firms set to drive most perceived future global productivity gains drove the IPOX® Indexes to a big first month under the new U.S. administration. Ahead of earnings for most of the key IPOX® Holdings, strong gains extended across the IPOX® Indexes universe and IPOX® GINDEX universe of stocks.
We note the outperformance of the applied market-cap weighted IPOX® Indexes over equally weighted IPOX® Portfolios. This stands in contrast with a good month for the S&P 500® Equal Weight Index (EWI: +3.40%) which significantly outpaced the applied market cap weighted S&P 500 Index (SPX: +2.70%) during January.
Big stand-out was the IPOX® 100 U.S. (ETF: FPX) which added +9.80% during last month, +710 bps. ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Here, 78% of firms rose, with the average (median) equally-weighted stock adding +6.65% (+6.94%), significantly lagging the IPOX® 100 U.S. (ETF: FPX). Top performers included online trading platform Robinhood (HOOD US: +39.43%), KY-based health care services firm Bright Spring Health (BTSG US: +38.58%) and Constellation Energy (CEG US: +34.09%), while select biotechs (JANX US, ACLX US and KYMR US) recorded notable losses.
In markets outside the U.S., the IPOX® International (ETF: FPXI) continued its 2024 Momentum, adding +8.11%. Here, 68% of firms rose, with the average (median) equally weighted stock adding +6.11% (+4.79%), also lagging IPOX®. Firms with most upside included Canada’s electronic components maker Celestica (CLS US: +35.26%), semiconductor maker ARM (ARM US: +29.34%) and Japan’s NetBank SBI Sumishin (7163 JP: +25.59%), while Indonesians miner Amman Mineral (AMMN IJ: -11.21%) fell sharply.
Notable gains also extended to Europe, where benchmarks caught up to strong IPOX® sentiment displayed during Q4 last year. Here, the IPOX® 100 Europe (ETF: FPXE) rose by +7.83%, slightly ahead of the European market. 71% of portfolio holdings gained, with the average (median) firm adding +5.70% (+5.84%), also well below IPOX®. European firms traded in the U.S. led some of the upside, including casino operator Super Group (SGHC US: +29.86%), aforementioned ARM (ARM US: +29.34%) and biotech Verona Pharma (VRNA US: +23.39%), e.g., while biotech Moonlake (MLTX US: -15.07%) fell sharply.
Big monthly returns extended to ESG (IPXT), Nordic (IPND), Canada (ICDX), Japan (IPJP), China (CNI) and IPOX® High Dividend 7%.
THE IPOX® SPAC INDEX: The Index gained +2.11% during January. Telehealth firm Hims & Hers Health (HIMS US: +54.18%) was the top performer, rebounding from December’s weakness. In contrast, Nvidia-invested voice AI company SoundHound AI (SOUN US: -28.68%) saw a sharp decline due to heavy profit-taking after skyrocketing +835.85% in 2024. In January, five SPACs announced merger targets, pending deal completion, while five others completed their business combinations. Additionally, 8 new SPACs launched in the U.S., marking the highest monthly SPAC IPO count since 2022.
GLOBAL ECM REVIEW AND OUTLOOK: Last month saw 102 global companies going public, raising $8.6 billion in the strongest January in 3 years. New listings showed strong performance, with an average gain of +50.81% from offer price to month-end (Median: +15.61%). The month's largest IPO was U.S. LNG firm Venture Global (VG US: -18.20%), raising a substantial $1.75 billion, followed by pork producer Smithfield Foods (SFD US: +7.50%, $522 million) and oil & gas firm Flowco Holdings (FLOC US: +16.67%, $491 million). Notably, January witnessed a resurgence in U.S. biotech IPOs, including obesity drug firm Metsera (MTSR US: +47.22%, $275 million) and insulin pump maker Beta Bionics (BBNX US: +40.06%, $235 million). Looking to the first week of February, the IPOX® Calendar remains active with U.S. listings such as cement company Titan America (TTAM US, $396 million) and UK software firm RedCloud (RCT US, $66 million). Internationally, notable IPOs include Swiss antibiotics firm BioVersys (BIOV SW, $83 million), Korean IT service company LG CNS (064400 KS, $712 million), Czech-Korean power plant turbine maker Doosan Skoda Power ($104 million), and Polish diagnostic services provider Diagnostyka (DIA PW, $416 million).
Read The IPOX® Update on our website for the latest IPO News.
