Scouting the Latest IPOs

Just like opening day at the ballpark, investing in new IPOs holds the potential for shining promise and crushing disappointment. If you simply can't bear to just cheer on your favorites from the sidelines, at least be careful about investing in this league. Many new issues swing for the fences during their first trading days, only to slump once marketing hype has given way to mundane earnings reports.

Don't commit an error by stocking your entire portfolio with rookies. Allocate just a small percentage of your risk capital to IPOs. Scout your potential phenoms carefully, and be choosy about composing your own rotisserie league. Investing with an eye for a season extending long beyond opening day will reward you with quality players capable of staying in the game. With that in mind, we offer our Foolish scouting report of the latest IPOs.

Last week's games

• Winner: MetroPCS Communications
• Ticker: NYSE: PCS
• Industry: Cellular phone service provider
• Deal terms: 50 million shares, $23 per share
• Lead manager: Bear Stearns
• Filed: Jan. 4
• Opening day: April 19, opened at $25.10, closed at $27.40, 19.1% gain
• Bleacher banter: Priced above its proposed range of $19-$21 per share; first IPO of the year to raise more than $1 billion
  
  
• Superior Offshore International
• Ticker: Nasdaq: DEEP
• Industry: Oil and gas services provider
• Deal terms: 8.7 million shares, $15 per share
• Lead manager: Merrill Lynch
• Filed: Aug. 11
• Opening day: April 20, Opening day: April 20, opened strong and closed at $17.54 for a 16.9% gain
• Bleacher banter: Priced at midpoint of its proposed range and increased size of offering by 1.5 million shares
  
  
• Simcere Pharmaceutical
• Ticker: NYSE: SCR
• Industry: Chinese pharmaceutical
• Deal terms: 15.6 million American depositary shares, $14.50 per share
• Lead manager: Goldman Sachs
• Filed: March 23
• Opening day: April 20, opened at $15, closed at $15.30, 5.5% gain
• Bleacher banter: Priced at high end of its proposed range

On deck

• CardioMems
• Proposed ticker: Nasdaq: SENS
• Industry: Biotech
• Proposed deal terms: 6 million shares, $12-$14 per share
• Lead manager: Banc of America
• Filed: Jan. 19
  
  
• Cinemark Holdings
• Proposed ticker: NYSE: CNK
• Industry: Movie theater operator
• Proposed deal terms: 28 million shares, $17-$19 per share
• Lead managers: Lehman, Credit Suisse, and Merrill Lynch
• Filed: Feb. 1
  
  
• Edenor
• Proposed ticker: NYSE: EDN
• Industry: Argentine electricity distributor
• Proposed deal terms: 15.2 million shares, $16-$18 per share
• Lead managers: Citigroup and JP Morgan
• Filed: April 5
  
  
• Ocean Power Technologies
• Proposed ticker: Nasdaq: OPTT
• Industry: Alternative energy company
• Proposed deal terms: 5 million shares, $20-$22 per share
• Lead managers: UBS, Banc of America, and Bear Stearns
• Filed: Nov. 13
  
  
• OceanFreight
• Proposed ticker: Nasdaq: OCNF
• Industry: Greek development-stage fleet operator
• Proposed deal terms: 10.8 million American depositary shares, $19-$21 per share
• Lead managers: Banc of America and Cantor Fitzgerald
• Filed: April 9
  
  
• Orexigen
• Proposed ticker: Nasdaq: OREX
• Industry: Biotech
• Proposed deal terms: 6 million shares, $11-$13 per share
• Lead managers: Merrill Lynch and JP Morgan
• Filed: Dec. 19
  
  
• Pharmasset
• Proposed ticker: Nasdaq: VRUS
• Industry: Pharmaceutical
• Proposed deal terms: 6 million shares, $12-$14 per share
• Lead managers: Banc of America and UBS
• Filed: May 8

Game of the week

Cinemark Holdings may provide some entertainment in the IPO market this week.

The Texas-based company maintains the third-largest motion-picture circuit in the U.S., and the most geographically diverse in Latin America. Collectively, the company owns 396 theaters and 4,488 screens in the U.S. and Latin America. Cinemark claims that its appeal to customers resides in its portfolio of modern theaters and that its desirability to movie studios is its distribution channels, particularly as Hollywood aims to gain market share in Latin America.

Last October, the company acquired Century Theatres, a California-based theater chain with 77 theaters and 1,017 screens in 12 states for $681 million and the assumption of $360 million of debt. The company recorded $1.2 billion of revenues in 2006 and $841 million of net income in 2006. On a pro forma basis taking into account the Century acquisition for the same period, revenues were $1.6 billion with a net loss of $3.5 million.

Competitive strengths include the company's strategic locations and significant operational cash flow. Cinemark intends to establish and maintain leading market positions while selectively expanding in Latin America and controlling operating costs overall. Bear in mind that while the motion picture exhibition industry has experienced long-term growth, box office revenues can vary greatly in the short run, spiking up in late spring and summer.

Shares are expected to begin trading tomorrow. As always, make sure you do your own warm-ups and read through a company's offering documents, including the risk factors, before getting in on the game!

Warming up in the bullpen

• Acorn International, a Chinese marketing company, announced deal terms of 7.7 million American depositary shares at $12.50-$14.50 per share. The lead managers are Merrill Lynch and Deutsche Bank.
  
  
• Continental Resources, an oil and gas producer, announced deal terms of 29.5 million shares at $16-$18 per share. The lead managers are JP Morgan and Merrill Lynch.
  
  
• JMP Group, an investment banking and asset management firm, announced deal terms of 7.9 million shares at $10.50-$12.50 per share. The lead managers are JMP Securities, Merrill Lynch, and Keefe, Bruyette & Woods.
  
  
• NeurogesX, a biopharmaceutical, announced deal terms of 4 million shares at $13-$15 per share. The lead manager is Morgan Stanley.
  
  
• Sirtris Pharmaceutical, a biopharmaceutical, announced deal terms of 5 million shares at $9-$11 per share. The lead managers are JP Morgan and CIBC.
  
  
• TomoTherapy, a medical-device developer, announced deal terms of 10.9 million shares at $15-$17 per share. The lead managers are Merrill Lynch and Piper Jaffray.

Sent down to the minors
No planned offerings scheduled for last week were postponed.

Minor-league developments
Get ready, get set ... not yet! The latest filings announced during the last week include:

• Airvana
• Proposed ticker: Nasdaq: AIRV
• Industry: Network infrastructure provider
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley and Lehman
• Filed: April 19
  
  
• Cypress Sharpridge Investments
• Proposed ticker: NYSE: CYS
• Industry: REIT
• Proposed deal terms: Not yet determined
• Lead managers: Bear Stearns, Citigroup, Merrill Lynch, and UBS
• Filed: April 19
  
  
• HHGregg
• Proposed ticker: NYSE: HGG
• Industry: Appliance and electronics retailer
• Proposed deal terms: Not yet determined
• Lead managers: Credit Suisse and Lehman
• Filed: April 18
  
  
• Limco-Piedmont
• Proposed ticker: Nasdaq: LIMC
• Industry: Aerospace maintenance provider
• Proposed deal terms: Not yet determined
• Lead managers: Oppenheimer and Stifel Nicolaus
• Filed: April 17
  
  
• Masimo
• Proposed ticker: Nasdaq: MASI
• Industry: Medical-device maker
• Proposed deal terms: Not yet determined
• Lead managers: Piper Jaffray and Deutsche Bank
• Filed: April 18
  
  
• Stallion Oilfield Services
• Proposed ticker: Nasdaq: SOFS
• Industry: Wellsite services provider
• Proposed deal terms: Not yet determined
• Lead managers: Lehman, Credit Suisse, and UBS
• Filed: April 18 (refiling)
  
  
• Qiao Xing Mobile Communication
• Proposed ticker: NYSE: QXM
• Industry: Chinese mobile-handset manufacturer
• Proposed deal terms: 16.7 million American depositary shares, $11-$13 per share
• Lead manager: UBS
• Filed: April 17
  
  
• SoundBite
• Proposed ticker: Nasdaq: SDBT
• Industry: Voice-messaging provider
• Proposed deal terms: Not yet determined
• Lead managers: Cowen and Thomas Weisel
• Filed: April 16

Disabled list

• PTC Therapeutics, a biotech, withdrew its planned offering last week, citing market conditions.

Champions
Meet our current champs. Among companies that went public during the past 12 months, these firms' percentage returns from their offer prices to their most recent closing prices rank them as the top five players.

Benchwarmers
Now meet our current benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that went public during the past 12 months, these firms' percentage returns from their offer prices to their most recent closing prices rank them as the bottom five players.

Groupies and fan clubs
If you don't want to declare your loyalties for specific players but still want to enjoy the action, consider subscribing to an IPO-focused mutual fund or exchange-traded fund. Of course, do your scouting homework here, too, and make sure you read their prospectuses before buying season tickets.

Equities rallied last week, led by the blue chips. The Nasdaq rose 1.4%, while the Russell 2000 gained 1.2%. Our watched IPO players scored but lagged behind, with the First Trust IPOX 100 (AMEX:FPX), an ETF, adding 1%, and the IPO Plus Aftermarket (FUND:IPOSX) increasing 0.4%.

Keep reading the Fool to see how your favorite players perform as they mature!

We're publicly offering further Foolishness:

• The IPO Lock-Up Period

Sources: Renaissance Capital's IPOhome.com, SEC filings, Reuters.

Omniture is a Stock Advisor recommendation. New Oriental Education is a Global Gains selection.

Fool contributor S.J. Caplan roots for the Cleveland Indians when her husband is watching and for the Boston Red Sox when he leaves the room. She holds no financial position in any firms or funds mentioned here. The Fool has a disclosure policy.