Intriguing IPOs: Loar Corporation (LOAR)

This aerospace supplier is both an intriguing opportunity and a sign of things to come in the IPO market.

The Factory, Vincent Van Gogh, 1887, oil on canvas (Barnes Foundation)

IPO investing has one unique element we don’t typically consider when evaluating public companies: Why. Specifically, why is the company going public? Is it to raise capital and grow the business? To cash out some early investors? To capitalize on investor appetite for a hot sector?

Or, let’s be honest here, they’re going public to bilk some people out of money by offering questionable (if not outright fraudulent) businesses.

For the past decade or so, I think it has been fair to scrutinize companies more about why they intend to go public. Recently, though, the IPO route makes a lot more sense for companies than it has since the end of the Great Recession.

One such example of this changing landscape is Loar Corporation's upcoming IPO. If this were still the 2010s, I think there’s a decent chance that stock investors would never have had a chance at this company. Today, it’s much harder for companies like Loar to stay private.

This is a good sign for stock investors.

Loar looks like a compelling company, so let’s use this quick look at Loar’s prospectus to disect why the changing landscape for private companies could lead to more IPOs like Loar in the coming years.

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