Sun Country IPO: Hot or Not?

You're receiving this email as part of your subscription to Trend Trader Daily. [Unsubscribe here](. Sun Country IPO: Hot or Not? By Lou Basenese Thursday, February 11, 2021 If there’s one thing you can always count on, it’s this: Bull markets always lead to boom times for initial public offerings (IPOs). And it’s no different this time around. In fact, the number of companies going public last year surged to a six-year high of 218. Amidst so much IPO activity, it’s easy to miss out on compelling opportunities. Especially if you focus exclusively on red-hot sectors like fintech, electric vehicles, or biotech. That’s why, [earlier this week](, I alerted you to a high-potential IPO in the most unlikely of sectors: airlines. As you know, tremendous headwinds exist for all airline companies. But when it comes to Sun Country Airlines (Proposed Ticker: SNCY), that could play to our advantage. You see, given the headwinds, the company might be forced to price its IPO way cheaper than normal. And since we know that air travel will inevitably rebound, this could represent a rare chance to buy a not-so-hot IPO today — and make a fortune in the future. But to truly determine if this IPO is worth our time and attention, we need to ensure that it possesses the [five fundamentals]( necessary to soar in the aftermarket. So let’s get to it… ADVERTISEMENT FROM THE DESK OF LOU BASENESE I was just forwarded the recording of a private discussion. It features a friend of mine named Dr. Kent Moors. If you’re not familiar with Dr. Moors, you should be — he spent 40 years as an operative for the CIA. He’s been an advisor to 29 world governments. And he’s been a consultant to some of the most powerful companies on the planet (you’d know them by name, instantly). But these achievements pale in comparison to his incredible new breakthrough. Simply put, this breakthrough is a new trading system that Kent created. [CLICK HERE to learn how to put Dr. Moors' breakthrough to work for YOU »]( >> Five Hallmarks of a Profitable IPO - Revenue: Research from Professor Jay Ritter at my alma mater, the University of Florida, has demonstrated that companies with more than $100 million in sales prior to their IPO perform best, rising an average of 42.8% over three years. Sun Country passes with flying colors (pun intended) here. In the 12 months ended Sep. 30, 2020, the company booked $458 million in revenue. - Verifiable Growth Opportunity: An IPO is an investment in a company’s future growth. You might think the airline industry is mature and devoid of growth. But think again! In addition to a snapback in demand that’s inevitable as travel restrictions lift in the aftermath of Covid-19, air travel has been steadily climbing 7% each year in Sun Country’s main passenger markets. At the same time, the company operates as a cargo and charter carrier. And you guessed it — both these markets are growing impressively, too. Thanks to a boom in e-commerce, the cargo sector keeps growing by almost $5 billion per year. (It’s worth noting, Sun Country operates 10 planes and counting exclusively for Amazon.) And Sun Country’s main charter segment is expanding at a healthy 6% annual clip. In other words, there’s plenty of growth ahead. - Insider Ownership: We should insist on a minimum of 30% insider ownership. But since Sun Country’s SEC filing is so fresh, this information hasn’t been published yet. So we’ll have to wait for final confirmation that the interests of insiders and investors are adequately aligned. - Offering Size: $100 million is the key threshold here, as it weeds out the riskiest deals and ensures ample liquidity in the aftermarket. As it turns out, Sun Country plans to raise at least $100 million with its IPO, setting the stage for a strong debut in the aftermarket. - Profitability: Unless a company is profitable (or on a clear path to profitability), avoid it. Otherwise, expect to lose a lot of money… just like IPO investors in Uber (UBER), Snap (SNAP), and Blue Apron (APRN) lost money. This is a hard-and-fast IPO screening criterion because share prices ultimately follow earnings. Here’s the good news: not only is Sun Country profitable, it’s way more profitable than every other airline right now, as you can see in the chart below. As the airline industry’s rebound begins in earnest — and Sun Country’s sales and profits continue to increase — its share price is bound to follow suit. (click image to enlarge) The Final Factor The last criterion to consider, of course, is valuation. Because we don’t want to overpay for growth. But before we can determine whether the price is right, we’ll have to wait for Sun Country to finalize its IPO plans. So for now, put Sun Country on your IPO Watch List for 2021. And stay tuned for future updates. Ahead of the tape, [Lou Basenese] Lou Basenese [Terms & Privacy](| [Unsubscribe]( 301 S. Perimeter Park Dr. Suite 100 Nashville, Tennessee 37211 RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. SECURITY HOLDING NOTICE: Although we are never compensated from any companies for coverage, you should be aware that Trend Trader Daily, its authors, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication. While authors might actively transact in the securities mentioned, they will always have a net position that is consistent with the position set forth in our research reports, letters and updates. DISCLAIMERS: The work included in this communication is based on diverse sources including SEC filings, current events, interviews, corporate press releases, and information published on funding platforms, but the views we express and the conclusions we reach are our own. As such, this content may contain errors, and any investments described in this content should be made only after reviewing the filings and/or financial statements of the company, and only after consulting with your investment advisor. Actual results may differ significantly from the results described herein. Furthermore, nothing published by Trend Trader Daily, Inc should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Trend Trader Daily is an independent provider of education, information and research on publicly traded companies, and as such, it accepts no direct or indirect compensation from any companies or third parties mentioned in any of our letters, reports or updates. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -