New issues

Introduction| Course| Q&As | Recommended reading| Quiz |

Introduction

Context

New issues are not a surefire way to make money, as salespeople often claim. But at certain points in the stock market cycle, companies do tend to offer new shares at attractive discounts, making them worthwhile investments. Private investors can cash in on this, provided they apply level-headed analysis to company prospectuses and do not get carried away by the urge to stag new issues for a living.

Prior knowledge required

You will need to understand the basics of growth investing and stock valuation, including the use of the main financial ratios (P/E, PEG and PSR).

Contents

1. After Sid - a short history of the new issues market
2. Do new issues offer good value?
3. Types of new issue
4. Applying via brokers and intermediaries
5. The prospectus
6. What to look for in the prospectus (1) - directors and advisers
7. What to look for in the prospectus (2) - standard company analysis
8. What to look for in the prospectus (3) - blue-sky company analysis
9. Making your application
10. Stagging
11. A word on warrants
12. A tale of two issues
13. Conclusion

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