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  • The beginning of a new bull market means big opportunities among small companies, according to Julian Emanuel of BTIG. 
  • He’s looking for the most dramatic of those opportunities, examining companies that went public in the last 11 years, are trading below their IPO prices, and have dropped 50% from a recent high.
  • He says the companies are also potential buyout targets based on their histories with private equity or venture capital backers. 
  • Visit Business Insider’s homepage for more stories.

The worst-case scenario for a company that’s going public might look something like this: Setbacks, disappointments, losses, and then a global economic catastrophe.

But there’s always hope their luck will change. Julian Emanuel — the chief equity and derivatives strategist at BTIG — is looking for some of the most appealing turnaround stories, and he thinks those serial underperformers are a good place to start.

Small companies like these get hit hard when the market tumbles, but they tend to outperform as a new bull market begins. And Emanuel is looking at some of the worst-performing small-company stocks that have gone public since 2009.  

But that’s not the only thing working in their favor. He’s zeroing in on companies that have a history with private equity or venture capital backers who could look to take advantage by acquiring the company. That would turn around some of that historic poor performance in a hurry.

In a note to clients, Emanuel points out that those private equity firms might be more willing to make a deal with these companies because they’re still run by their founders, or by the same CEO who was in charge at the time of the company’s IPO.

To narrow his targets further, he’s looking for companies that still have positive shareholder equity, or enough assets to cover their debts. 

Bringing together all of those factors, Emanuel says he’s found a group of struggling stocks present real opportunities as the market heals or as potential buyers swoop in. He’s come up with 25 founder- or veteran-CEO-run companies all valued at $2 billion or less that have fallen since their IPOs and are down 50% from their latest highs.

The companies are ranked from lowest to highest based on how much their stock prices have fallen from those highs. All of those values are calculated based on their closing prices on May 9.

25. MeiraGTx Holdings

Markets Insider

Ticker: MGTX

Sector: Healthcare

Since IPO: -4.5%

Since all-time high: -52.6%

Source: BTIG

24. Athenex

Markets Insider

Ticker: ATNX

Sector: Healthcare

Since IPO: -9.9%

Since all-time high: -52.6%

Source: BTIG

23. The RealReal

Markets Insider

Ticker: REAL

Sector: Consumer discretionary

Since IPO: -30.4%

Since all-time high: -53.7%

Source: BTIG

22. Sonos

Markets Insider

Ticker: SONO

Sector: Consumer discretionary

Since IPO: -30.1%

Since all-time high: -55.6%

Source: BTIG

21. Warrior Met Coal

Markets Insider

Ticker: HCC

Sector: Materials

Since IPO: -23.2%

Since all-time high: -56.7%

Source: BTIG

20. Kala Pharmaceuticals

Markets Insider

Ticker: KALA

Sector: Healthcare

Since IPO: -24.7%

Since all-time high: -57.8%

Source: BTIG

19. QuinStreet

Markets Insider

Ticker: QNST

Sector: Communication services

Since IPO: -29.9%

Since all-time high: -57.8%

Source: BTIG

18. Elf Beauty

Markets Insider

Ticker: ELF

Sector: Consumer staples

Since IPO: -20.7%

Since all-time high: -58.6%

Source: BTIG

17. Mersana Therapeutics

Markets Insider

Ticker: MRSN

Sector: Healthcare

Since IPO: -34.6%

Since all-time high: -59.1%

Source: BTIG

16. Homology Medicines

Markets Insider

Ticker: FIXX

Sector: Healthcare

Since IPO: -20.7%

Since all-time high: -60.1%

Source: BTIG

15. AC Immune

Markets Insider

Ticker: ACIU

Sector: Healthcare

Since IPO: -29.6%

Since all-time high: -61.2%

Source: BTIG

14. Akebia Therapeutics

Markets Insider

Ticker: AKBA

Sector: Healthcare

Since IPO: -29.5%

Since all-time high: -61.4%

Source: BTIG

13. Kadmon Holdings

Markets Insider

Ticker: KDMN

Sector: Healthcare

Since IPO: -63.5%

Since all-time high: -62.7%

Source: BTIG

12. Zuora

Markets Insider

Ticker: ZUO

Sector: Information technology

Since IPO: -19.6%

Since all-time high: -70.2%

Source: BTIG

11. Revolve Group

Markets Insider

Ticker: RVLV

Sector: Consumer discretionary

Since IPO: -27.6%

Since all-time high: -73.1%

Source: BTIG

10. Avrobio

Markets Insider

Ticker: AVRO

Sector: Healthcare

Since IPO: -24.4%

Since all-time high: -73.2%

Source: BTIG

9. Evolent Health

Markets Insider

Ticker: EVH

Sector: Healthcare

Since IPO: -58.4%

Since all-time high: -73.6%

Source: BTIG

8. Eventbrite

Markets Insider

Ticker: EB

Sector: Communication services

Since IPO: -55.3%

Since all-time high: -74.5%

Source: BTIG

7. Ardelyx

Markets Insider

Ticker: ARDX

Sector: Healthcare

Since IPO: -47.3%

Since all-time high: -79.2%

Source: BTIG

6. G1 Therapeutics

Markets Insider

Ticker: GTHX

Sector: Healthcare

Since IPO: -4.2%

Since all-time high: -79.3%

Source: BTIG

5. Liberty Oilfield Services

Markets Insider

Ticker: LBRT

Sector: Energy

Since IPO: -72.3%

Since all-time high: -80.3%

Source: BTIG

4. Rubius Therapeutics

Markets Insider

Ticker: RUBY

Sector: Healthcare

Since IPO: -73.0%

Since all-time high: -81.2%

Source: BTIG

3. Quotient Technology

Markets Insider

Ticker: QUOT

Sector: Consumer discretionary

Since IPO: -61.9%

Since all-time high: -81.5%

Source: BTIG

2. Fitbit

Markets Insider

Ticker: FIT

Sector: Information technology

Since IPO: -66.6%

Since all-time high: -87.1%

Source: BTIG

1. GoPro

Markets Insider

Ticker: GPRO

Sector: Consumer discretionary

Since IPO: -85.6%

Since all-time high: -96.5%

Source: BTIG

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