If consumers tightened their purse strings, Lego didn’t get the memo.
The Danish toy company reported first-half results on August 28, which were significantly higher than a year ago. On the top line, its revenues increased by 13%, while its operating profit increased by 26% to 8.1 billion Danish kroner ($1.20 billion).
“We delivered double-digit growth on the top- and bottom-line and made significant progress on increasing the amount of sustainable materials used in our products,” Stated CEO Niels B. Christiansen.
Lego’s investments in its business appear to have paid off. It is one company I would love to see it go public. Unfortunately, businesses are waiting far longer to do so, which makes the list of attractive IPOs that investors would gobble up a long one.
Here are three names I would consider buying if they were to offer shares to the public.
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- Mars generates significant revenue from its pet care business that goes largely unnoticed.
- H-E-B is a big Tex-Mex success story.
- In addition to having a large car rental business, Enterprise Mobility is a big sponsor of the NHL.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Mars
Mars is arguably the best-known of the three names on this list. Who hasn’t had a Mars bar or a Snickers bar in the past? Of course, it is so much more than just a chocolate business. Statista pegs its 2023 revenue at $47 billion. That’s a lot of chocolate bars.
On August 14, Mars announced it would acquire Kellanova (NYSE:K) for $83.50 a share, valuing the deal at nearly $38 billion. The privately held company is paying a 33% premium to Kellanova’s August 2 closing, the day news surfaced that it was in talks to buy the maker of Cheez-It, Pringles, and other popular snack brands.
Together, Mars’ share of the U.S. snack market jumps to 8.5%, well behind PepsiCo’s (NASDAQ:PEP) Frito-Lay brand. This puts Mars in a position to compete more with the snack foods leader.
The Kellanova acquisition would be the company’s largest ever, surpassing its 2008 purchase of Wrigley for $23 billion. It’s not expected to face many regulatory issues because its products generally don’t overlap too much.
While Mars Snacking is the company’s most prominent division, it has jumped heavily into the pet care business in the past decade or more. It owns pet food brands such as Eukanuba, Iams, Pedigree, Royal Canin, and Whiskas and a network of approximately 3,000 vet clinics and hospitals in the U.S., the UK, and several other countries.
As a big-time pet owner and candy lover, Mars is an investment I couldn’t refuse.
H-E-B Grocery
Next in line in terms of the 20 largest private companies by revenue in the U.S. is H-E-B Grocery, the Texas grocery store chain that always seems to be innovating. It generated an estimated $43.6 billion in sales in 2023.
H-E-B got its start in 1905 in Kerrville, Texas. It was started by Florence Thornton, who previously worked for A&P. She named it C.C. Butt Grocery Store after her husband, Clarence Butt. His son, Howard, took over in 1919, first changing the name to H.E. Butt Grocery Stores in 1926 and then H-E-B in 1946.
It has over 378 stores in Texas and another 57 in Mexico through a joint venture.
In 2023, H-E-B was named “America’s favorite grocery store.” Reasons include focusing on local, Texas-made products, wide aisles to improve shopping experience, top-notch store-brand products, affordable organics, and lots of tortillas.
The grocery store chain opened its 8th e-commerce fulfillment center in May. Located in Cibolo, Texas, the 55,000-square-foot facility is attached to its store there. It opened its first in 2018. The chain feels that adding this fulfillment capacity reduces store crowding.
I wish they existed here in Canada. It’s probably too much to ask, and it’s also unlikely to go public anytime soon.
Enterprise Mobility
Enterprise Mobility is two spots down from H-E-B in the seventh spot with $40 billion in 2023 revenue. If you’re unfamiliar with the company, it could be because it changed its name and rebranded in October 2023. It used to be called Enterprise Holdings, one of North America’s largest rental car companies.
“We were founded as a car leasing business and are best known today as the world’s largest car rental provider. Yet, the business has evolved immensely in terms of geography, offerings, and customer segments served,” said CEO Chrissy Taylor in its October 2023 press release. “Enterprise Mobility brings together the full portfolio we have to offer as we continue to invest heavily to meet customer mobility needs today and into the future.”
Chrissy Taylor is the granddaughter of founder Jack Taylor, who died in 2016. Based in St. Louis, Forbes estimates the Taylor family fortune at $19 billion, up considerably from $7.8 billion in 2020. Her grandfather named the company after the boat he served on during World War II, the USS Enterprise.
In my few experiences with Enterprise, few car rental companies are run that well.
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