3 Hot IPOs With Insider Buying Activity

Charah Solutions Inc (NYSE:CHRA)

No less than five Directors of Charah Solutions’ board purchased shares on June 18 for the IPO price of $12.00 per share. Among them were Brian Ferraioli (8,350 shares), Stephen Tritch (1,000 shares), Robert Flexon (5,000 shares), Jack Blossman (5,000 shares), and Claire Babineaux-Fontenot (2,500 shares).

Charah Solutions Inc (NYSE:CHRA) is one of the few IPOs that hasn’t captivated investors since its launch, sliding from its $12 IPO price (which was already well below the $16-$18 expected range) down to $11.11 per share. That’s not entirely surprising given that the company provides environmental and maintenance services to two hard-hit energy segments, coal and nuclear, which have been supplanted by cheaper forms of energy generation like natural gas, solar, and wind.

President Trump recently issued an order to Energy Secretary Rick Perry to bail out the beleaguered power plants, citing national security concerns, which increasingly appears to be his go-to method to justify whatever he needs to get done. The order will force electric grid operators to buy the more expensive energy from coal and nuclear plants.

While that may buy those plants a temporary reprieve, it’s likely to be just that, temporary. Given that Charah Solutions Inc (NYSE:CHRA) is heavily exposed to both coal and nuclear, its long-term prospects don’t exactly look rosy. The company is also in a debt covenant straightjacket that prevents it from paying dividends or buying back stock, which eliminates two of the easiest methods by which companies can reward shareholders.

Avalara Inc (NYSE:AVLR)

Avalara’s Chairman, CEO, and President Scott McFarlane, as well Director Jared Vogt, both of whom are members of MVPROJECTS, LLC, were credited with purchasing 9,375 Avalara Inc (NYSE:AVLR) shares at $17.68 per share on May 29, with those shares being indirectly owned by both insiders. In addition, the Director has direct ownership of 1.11 million shares, while Avalara’s top executive owns 697,488 shares directly.

Avalara Inc (NYSE:AVLR) has nearly doubled from its $24 IPO price since June 15, sitting just under $48 per share. The provider of tax compliance software enjoyed a positive catalyst early in its publicly-traded life, as the Supreme Court ruled on June 21 that states will be allowed to continue to collect sales tax on online purchases, regardless of where the physical location of the online retailer in question. That means a lot more transactions that Avalara’s cloud service could be called upon by online sellers to determine the proper amount of tax to be charged, which is a complex process. Avalara’s revenue rose by 27% last year to $213.2 million as it processed 6 billion transactions. CEO McFarlane has the ambitious goal of one day having a hand in every digital transaction.

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