Pfizer Inc. (PFE), Zoetis Inc (ZTS): Underpriced IPOs May Have Big Upside

For Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) and its investors, this is a major growth opportunity. It has been using debt rather aggressively with a debt to equity ratio of 1.48. This isn’t necessarily a negative indicator, but it is something to be careful of. As this debt begins to mature, management will have to grow the top line even more to compensate. The debt is funding the new ships. So, as I see it, this is a positive investment.

The stock has a major upside. As more people are selecting cruises as their vacation option, Norwegian has a great opportunity to capture more of the market share through new ships, better port-of-call options and on-board activities. This stock was also underpriced at $19 when it was initially offered. There is a strong upside this year with a potential stock price of $34 per share.

Final thoughts

Investors and investment bankers have been cautious this year. There has been a strong boom but IPOs bring on a level of risk. These two companies were underpriced when initially offered. Investors caught on and saw the potential. Zoetis has delivered most of the growth it will see this year, but Norwegian still has a lot to give investors in return. Hop on board and cruise on towards profits!

The article Underpriced IPOs May Have Big Upside originally appeared on Fool.com and is written by Austin Higgins.