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According to S&P, these companies that are filing to go public are at record levels, with 2020 seeing 283 new offerings. Privia Health is looking to take advantage of these trends. Here is how you can invest in Privia Stock.
Privia Health Financial History
PRVA’s revenues grew by 23.5% over the last 2 years. It went from $657,609 in 2018 to $817,705 last year. The company’s EPS grew from $-0.03 in 2018 to $0.33 in 2020. Its net income swung from $-3,044 to $31,244 in 2 years.
Here’s a summary of Privia’s financial history.
| Category | 2018 | 2019 | 2020 |
| Revenue | $657,609 | $786,360 | $817,075 |
| EPS | $-0.03 | $0.09 | $0.33 |
| Net Income | $-3,044 | $8,244 | $31,244 |
Privia’s growth is fueling the buying frenzy of the IPO.
Privia Health’s Potential
Privia Health is becoming one of the leading technology-focused healthcare companies in the U.S. It works with health plans, medical groups and health systems to improve collaboration between doctors and patients. It rewards healthcare professionals for providing more value virtually and through in-person cooperation. The company offers cloud solutions that decrease costs and improves care and connections among stakeholders.
The IPO is priced between $17 and $19 per share. The industry is expected to grow 9.7% from $183.30 billion last year to $201.4 billion in 2021. Privia Health can take advantage of these trends with the solutions it provides and expand into other areas.
The sector has many different players taking advantage of these shifts and Privia Health is at the forefront of them. Once the company goes public, the stock price can break through the IPO price. The current market conditions are favorable for new offerings and the added liquidity may increase the momentum in Privia’s business model.
How to Buy Privia Health (PRVA) Stock
The best approach for buying the IPO is to watch and see how it trades after going public. Don’t chase the stock if it moves sharply above the IPO price. You want to wait for the stock to settle and buy it after the initial excitement starts to fade. When a company does go public, there is a quiet period when not much information is released on the stock.
Insiders also face restrictions on making sales through what is known as the blackout period. You can take advantage of this by watching how it trades. Usually, the first 90 to 120 days after the company goes public is when you can get a better entry point. The key to buying an IPO is to remember that patience matters and you don’t want to become too enthusiastic.
Step-by-Step Guide:
- Pick a brokerage.
First, you want to decide what online broker can offer the best access to IPOs. A practical approach is to compare fees and if they are allocated any of the IPO. Another option is to wait and buy it in the aftermarket. In these situations, you don’t want to chase the stock, as it is in the quiet and blackout periods. There’s enough time that you can wait and see how it trades before entering your buy order.
- Decide how many shares you want.
Next, you want to decide on how many shares of the IPO to buy. One avenue is to invest no more than 10% of your portfolio into the company. IPOs are volatile and have higher levels of risk.
Take a long-term approach when evaluating the company and make sure you feel comfortable buying into it. Once you own the stock, don’t watch the day-to-day swings, as this increases emotions. Any investing needs to be something you can afford to lose. - Choose your type of order.
Once you’ve decided how many shares you want to buy, your broker will ask about the type of order to place. The order depends on if you want to purchase the stock right away or are willing to wait and buy at a select price. Here is our list of the different types of orders available to you.
Market order: A market order is executed at the current price the stock is trading at on the Nasdaq or NYSE. It guarantees that you will receive an execution near the last price the sellers are willing to accept, called the ask.
Buy limit order: The buy limit order allows you to buy the stock at a specific price or lower. If the stock reaches a select price at or below where it is entered, it executes and becomes a market order. You can use this to decide a good entry point for purchasing the IPO.
For example, if Privia Health rises above the IPO price, you can decide to buy it at the price it went public. Once it reaches this price and falls below it, the buy limit becomes a market order and it is executed. This type of order allows you to purchase the stock at a comfortable level and not chase it.
Stop order: A stop order can be used to limit a loss or buy at a specific price. Once it reaches the stop price, it becomes a market order and is executed as such. Buy stops are placed above where the price of the stock is selling. It is used to buy the stock if it starts to break out to the upside. A sell stop order sells the stock and is set below the market price. It decreases the downside risk in the stock.
For instance, if Privia Health falls below your execution price, you can use a sell stop order to keep your losses limited to 10%. A buy stop order is placed above where the stock is trading and is executed if it reaches that price. Traders use a buy stop when the stock moves higher and breaks key levels holding back the upward movement, called the resistance.
Buy stop-limit order: The stop-limit order combines the limit and stop orders together. You are setting it at the upper range that you’re willing to pay (i.e., the limit) and the lower end through the stop price. Say Privia Health moves toward $21. You have your limit at $25 and the stop is at $20. The broker will fill the order since it moved above $20. This is when it becomes a market order. The $25 level is the maximum price you are willing to pay. If the stock goes beyond it, the order will not be filled. A buy stop-limit is placed above the stock’s trading price but within a particular range. - Execute your trade.
The execution is when the stock is filled at the desired price. It is not the time that you are placing the trade but when it is filled.
Best Online Stock Brokers
Below is a list of best brokers to consider.
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
Are You In?
Privia Health went public on April 29th. It is an opportunity to buy into a growing healthcare company. You should determine if it is something you are willing to risk a small amount on. Contact your broker to evaluate if this investment matches what you’re looking for to realize your short- and long-term gains.