New IPOs: four companies you can invest in

ISA millionaire Robbie Burns casts his eye over four companies that have just floated or are about to float on the stock market.

Initial Public Offerings (IPOs) can be very hard to weigh up.

But, as long as you pick a decent business that you can see where the upside in profits might come from, you could be onto a winner.

There are quite a few companies that have either just floated or are about to float.

I often find it's best to invest in the ones that don't get so much publicity.

For example, another gym company is about to float, garnering loads of press.

I'm not that keen on the gym sector. People get bored, sign up to the gym with all good intentions but inevitably get lazy and quit.

Price comparison site GoCompare is another coming to the market but where is the growth coming from?

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The road less travelled

I prefer ones others that don't get so much coverage - and ones where I can see where the growth is –

There are a couple I fancy.

10 pin bowling company Hollywood Bowl has just floated on the market with a valuation of £240 million.

I'm quite bowled over with this one and intend to tuck this away in an ISA for two or three years as I can see some decent upside.

Where's that coming from? It's the UK’s largest operator of bowling alleys, currently operating 54 – mainly in out-of-town shopping areas, often next to a cinema.

It seems keen to refurbish venues which quickly lifts revenue. Revenue and profit is growing fast - revenue was up 25% in the six months to March this year.

Growth potential

How's that going to grow some more? Of course, new venues will be bought.

Indeed contracts have been exchanged on two new centres.

There is massive growth ahead by simply getting customers to visit bowling centres more often using incentives and making them a cool place to hang out.

More visits means more spending on food – 28% of revenue comes from the food offering with 23% from amusement machines.

The menus look rather attractive selling the kind of food people want at reasonable prices. And seems to be there is scope to raise prices in the food offering too.

As the alleys look better after refurbishment, prices can be raised.

Management looks experienced as well. As such, the £240m float price looks reasonable and so I’m in for some shares!

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Profiting off waste

The float of waste company Biffa sometime in October also looks promising.

It's the second biggest waste management company in the UK by revenue. Revenue was £927 million with operating profit a respectable £62.5 million in the last year.

The real question is where is the growth coming from as surely there is only a finite amount of rubbish?

Well, the company reckons it is coming from growth in population and regulation which specifies separate collections and treatment. It also thinks it can lower its costs in disposal. And it is also buying up other companies.

I buy this story and so I think I'm probably going to buy the shares when they launch on the market. Given its profits it is likely to get entry to the FTSE 250 probably in January so funds will buy in.

At the very worst if it goes down you can say to yourself: "That was a rubbish stock pick".

Robbie's book, The Naked Trader, is available from Amazon. His latest trades can be found on nakedtrader.co.uk and he also runs seminars on how to trade and invest for beginners. He has made more than £2 million from trading.

The views expressed in this article are the author's own and do not necessarily represent those of loveMONEY. The information included does not constitute regulated financial advice. You should seek out independent, professional financial advice before making an investment decision.