How to Buy Weber (WEBR) Stock

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Contributor, Benzinga
March 7, 2022
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Take a look at the most popular initial public offering (IPO) stocks over recent years and more often than not, the underlying entities cater to relevant sectors, primarily software technology, electric vehicles and clean energy infrastructure. Rarely do you find a barbeque company raring to go public (at least not until recently) yet that’s what we have with the Weber IPO and subsequent stock offering.

Best known for its high-quality outdoor grills, along with smaller portable cooking solutions, the food-preparation equipment maker seeks to take advantage of renewed interest in outdoor endeavors because of the stifling COVID-19 pandemic.

When Did Weber IPO?

Weber IPO’d on August 5, 2021, selling a little less than 18 million shares at $14 each.

Weber Financial History

Last summer, when the usual hub of activity from people getting out to enjoy the warmer weather cooled significantly due to the still-ongoing public health crisis, one sector filled a burgeoning opportunity gap: outdoor and portable grills. From a report by The Columbus Dispatch, Rob Schenz, owner of Specialty Gas House in Clintonville (a neighborhood in Columbus, Ohio), stated that such products have been selling like hotcakes.

Further, Brian Aliff, a manager at a nearby Lowe’s (NYSE: LOW) store, stated that “It’s hard to go get a good steak at a steakhouse right now.” Further, Aliff mentioned that “…with restaurants being closed or really difficult to get into, more people are cooking them at home. We’ve seen a significant uptick this year with (selling) grills and grill accessories.”

As you might expect, Weber converted this tremendous enthusiasm into strong financial results. In the fiscal year ended Sept. 30, 2020, the company generated net sales of $1.53 billion, up double-digit percentages from 2019 and 2018 sales at nearly $1.3 billion and $1.34 billion, respectively. Moreover, Weber delivered on the bottom line as well, with net income of $89 million up over 77% from 2019 results (although down 21.5% from 2018’s earnings of $113.3 million).

But the more critical point is that the outdoor grill manufacturer is carrying momentum into this year. For the 6 months ended March 31, the company rang up sales of $963.3 million, up 61.5% from the prior-year comparison. Also, this tally is already 73% of the average of full-year sales for 2018 and 2019, suggesting that Weber has a massive pathway ahead.

Following a meeting with prospective investors to spur interest and to ensure the existence of enough demand to support a new public offering, Weber changed its IPO date to Aug. 5 on the IPO calendar. Shares of the outdoor grill manufacturer would then sell under on the New York Stock Exchange (NYSE) under the ticker symbol “WEBR.”

According to its filings with the Securities and Exchange Commission, Weber planned to sell approximately 46.9 million shares. Management expected the price range to fall between $15 and $17 per share, with the potential to raise over $797 million at the highest end of the estimated spectrum. If so, that tally would‘ve allowed Weber to command a valuation of nearly $5 billion.

Underwriting the public offering were Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM).

Ordinarily, an outdoor grill maker probably wouldn’t draw so much attention. But because the COVID-19 pandemic forced the closures of restaurants, along with temporarily eliminating nonessential activities, households were left with no choice but to cook for their own.

In turn, the food-preparation industry skyrocketed, with rival Traeger — doing business under the corporate umbrella TGPX Holdings (NYSE: COOK) — listing its shares on the final Thursday of July 2021. Not wanting to miss out on the opportunity to strike the iron while it’s hot, Weber put its hat in the ring.

Weber Potential

Firing the primary catalyst for the Weber IPO was the COVID-19 pandemic, specifically the consumer behavioral shifts it imposed. Most conspicuously, the general inability to travel comfortably forced people to be creative, which meant for many people “stay-cations.” Data from the Bureau of Transportation Statistics show a dramatic decline in movement in 2020, whether by ground or by air. Invariably, then, Weber cynically benefitted from a hostage audience situation.

Additionally, a Bloomberg report from late last year declared ominously that restaurant closings topped 110,000, further crimping the broader consumer retail industry. Again, this unfortunate circumstance just so happens to bolster WEBR stock and its ilk. But with the pandemic being a one-off event, arguably most prospective buyers are wondering the same thing: Can this momentum last or is Weber merely a sentiment trap on immediacy bias?

While it’s tempting to counter the upside potential of WEBR as merely being a recipient of a fortuitous circumstance unrelated to the underlying business, the reality is that the pandemic’s harsh lessons could stick. For one thing, this crisis is the first in modern U.S. history where every American suffered a substantial impact. Second, the Pew Research Center reported that surveyed individuals have embraced the positive opportunities that COVID provided; namely, closer interpersonal relationships.

While some segments of society seemingly want to tear each other apart, as a HuffPost.com article wisely mentioned, there may be no greater joy than breaking bread with one another. The act transcends race, color, community, religion and any other categorization by which humanity seeks to separate itself.

It’s this reconnection to what makes people human that is fundamental to Weber’s stock offering. Best of all, the company proved the sentiment’s viability through remarkable financial growth.

How to Buy Weber (WEBR) Stock

The process is an easy one if you already know how to buy stocks. If not, follow the simple steps below.

Step 1: Pick a brokerage.

When online brokerages first arrived on the scene, their clients usually focused on platform cost. Nowadays, the underlying industry standardized key incentives, such as commission-free trading. Therefore, investors should narrow their search of best brokers on features and access.

Step 2: Decide how many shares you want.

Money management is key to long-term success in the market and the easiest way to accomplish this is through a prudent choice of share count. Decide on a balanced number that gives you solid rewards but also limits your downside should circumstances go awry.

Step 3: Choose your order type.

Before placing your bet, review the below market concepts.

  • Bid: The highest price a buyer will extend, the bid is always lower than the ask.
  • Ask: The lowest price a seller will agree to, the ask is always higher than the bid.
  • Spread: Primarily the difference between the bid and ask price, the spread also indicates market liquidity and risk. Tighter spreads imply strong negotiations between bulls and bears, thus implying higher liquidity and lower risk. Wider spreads have the opposite implication.
  • Limit order: To place a trade at a specific price, place a limit order. This order type gives you maximum control but no execution guarantees.
  • Market order: On the other hand, market orders guarantee fulfillment but at the current rate, which may fluctuate wildly during normal session hours.
  • Stop-loss order: A protective mechanism, a stop-loss order automatically exits your position at either a predetermined price or anything lower than it.
  • Stop-limit order: To remove uncertainties regarding your exit pricing, stop-limit orders only fulfill at a predetermined rate. However, such orders carry the same nonfulfillment risk as limit orders.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Apply the same sequence for limit orders but remember to include your desired execution price.

Cooking up Some Profits with WEBR

With the COVID-19 pandemic turning the retail industry into a twisted game of Whac-A-Mole, some sectors — such as the restaurant industry — stumbled badly while others, particularly those that cater to personal endeavors blossomed. Fortunately, Weber fell in the latter category. And while risks associated with the one-off nature of this catalyst exist, sociological data suggests that the pandemic’s fundamental lessons will resonate beyond the crisis.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.