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 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

Data Domain

  • Ticker: Nasdaq: DDUP
  • Industry: Digital marketing intelligence
  • Deal terms: 7.4 million shares, $15 per share
  • Lead managers: Goldman Sachs and Morgan Stanley
  • Filed: March 30
  • Opening day: June 27, opened at $20.01, closed at $24.95; 66.3% gain
  • Bleacher banter: Priced above its proposed range of $11.50 to $13.50 per share

ComScore

  • Ticker: Nasdaq: SCOR
  • Industry: Digital marketing intelligence
  • Deal terms: 5.3 million shares, $16.50 per share
  • Lead managers: Credit Suisse and Deutsche Bank
  • Filed: April 2
  • Opening day: June 27, opened at $22, closed at $23.47; 42.2% gain
  • Bleacher banter: Priced above its proposed range of $14 to $16 per share

Spectra Energy Partners

  • Ticker: NYSE: SEP
  • Industry: Energy
  • Deal terms: 10 million shares, $22 per share
  • Lead managers: Citigroup and Lehman
  • Filed: March 30
  • Opening day: June 27, opened at $26.50, closed at $28.50; 29.5% gain
  • Bleacher banter: Priced above its proposed range of $19 to $21 per share

PROS Holdings

  • Ticker: NYSE: PRO
  • Industry: Software
  • Deal terms: 6.8 million shares, $11 per share
  • Lead managers: JPMorgan and Deutsche Bank
  • Filed: April 4
  • Opening day: June 28, opened at $12.50, closed at $12.89;     17.2% gain
  • Bleacher banter: Priced at midpoint of its proposed range

Spreadtrum Communications

  • Ticker: Nasdaq: SPRD
  • Industry: Semiconductor production; based in China
  • Deal terms: 9 million American depositary shares at $14 per share
  • Lead managers: Morgan Stanley and Lehman
  • Filed: June 6
  • Opening day: June 27, opened at $14.30, closed at $15.95;     13.9% gain
  • Bleacher banter: Priced above its proposed range of $11 to $13 per share, and increased offering by 200,000 shares sold by selling holders

Polypore International

  • Ticker: NYSE: PPO
  • Industry: Battery membrane production
  • Deal terms: 15 million shares, $19 per share
  • Lead manager: JPMorgan
  • Filed: March 14
  • Opening day: June 28, opened at $18, closed at $18.03; 0.2% gain
  • Bleacher banter: Priced below its proposed range of $20 to $22 per share

Loser

AuthenTec

  • Ticker: Nasdaq: AUTH
  • Industry: Semiconductor production
  • Deal terms: 7.5 million shares, $11 per share
  • Lead manager: Lehman
  • Filed: March 16
  • Opening day: June 27, opened flat, closed at $10; 9.1% loss
  • Bleacher banter: Priced at high end of its proposed range

Fouled out

ShoreTel

  • Ticker: Nasdaq: SHOR
  • Industry: Telecom
  • Deal terms: 7.9 million shares, $10.50 per share
  • Lead managers: Lehman and JPMorgan
  • Filed: Feb. 12
  • Opening day: Delayed
  • Bleacher banter: Priced at high end of its proposed range on Wednesday, but trading has been delayed after Mitel Networks filed a lawsuit alleging patent infringement

On deck

Silver State Bancorp

  • Proposed ticker: Nasdaq: SSBX
  • Industry: Bank holding company based in Nevada
  • Proposed deal terms: 3.2 million shares, $22 to $24 per share
  • Lead managers: Sandler O'Neill and Howe Barnes
  • Filed: April 13

Game of the week

With only one uninspiring game on tap for this holiday week, take your mind off IPOs and go enjoy the summer.

Warming up in the bullpen
HHGregg, an electronics retailer, announced terms of 9.4 million shares at $15 to $17 per share. The lead managers are Credit Suisse and Lehman.

Netezza, which provides data warehouses, announced deal terms of 9 million shares at $9 to $11 per share. The lead managers are Credit Suisse and Morgan Stanley.

Sent down to the minors
Quark Pharmaceuticals postponed its offering, which was scheduled for last week.

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

Affinion Group Holdings

  • Proposed ticker: NYSE: AGH
  • Industry: Marketing
  • Proposed deal terms: Not determined yet
  • Lead manager: Not determined yet
  • Filed: June 27

CampusU

  • Proposed ticker: Nasdaq: CMPS
  • Industry: College-focused website operator
  • Proposed deal terms: Not determined yet
  • Lead manager: Maxim Group
  • Filed: June 26

Cosan Limited

  • Proposed ticker: NYSE: CZZ
  • Industry: Sugar and ethanol; based in Brazil
  • Proposed deal terms: Not determined yet; an offering of Brazilian depositary receipts on the Sao Paulo exchange will be sold concurrently with the U.S. offering
  • Lead managers: Credit Suisse, Goldman Sachs, and Morgan Stanley
  • Filed: June 25

OGE Enogex Partners

  • Proposed ticker: NYSE: OGP
  • Industry: Natural gas
  • Proposed deal terms: 7.5 million units; price not determined yet
  • Lead managers: UBS and Lehman
  • Filed: June 27

Symetra Financial

  • Proposed ticker: NYSE: SYA
  • Industry: Insurance
  • Proposed deal terms: Not determined yet
  • Lead managers: Merrill Lynch, Goldman Sachs, JPMorgan, and Lehman
  • Filed: June 29

Champions
Meet our 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:

Company

Return

Description

IPO Date

Riverbed Technology (Nasdaq: RVBD  )

349.4%

Tech

9/20/06

First Solar (Nasdaq: FSLR  )

346.5%

Solar module provider

11/16/06

New Oriental Education (NYSE: EDU  )

258.1%

Chinese educational services

9/6/06

Trina Solar (NYSE: TSL  )

178.1%

Chinese solar module provider

12/18/06

FCStone (Nasdaq: FCSX  )

138.7%

Commodity risk management

3/15/07

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:

Company

Return

Description

IPO Date

MEDecision (Nasdaq: MEDE  )

(50.2%)

Medical software provider

12/12/06

Netlist (Nasdaq: NLST  )

(50.0%)

Memory device maker

11/29/06

Achillion Pharmaceuticals (Nasdaq: ACHN  )

(48.0%)

Drug developer

10/25/06

Allot Communications (Nasdaq: ALLT  )

(43.3%)

Israeli technology

11/15/06

Globalstar (Nasdaq: GSAT  )

(39.1%)

Telecom

11/1/06

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

Last week there wasn't much clarity. Among our watched players, the Nasdaq rose 0.6%, followed by last week's first-place finisher, IPO Plus Aftermarket (FUND: IPOSX  ) , a mutual fund, which advanced 0.1%. The Russell 2000 slipped 0.1%, and First Trust IPOX 100 (AMEX: FPX  ) , an ETF, declined 0.3%.

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

We're publicly offering further Foolishness:

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

New Oriental Education is a Motley Fool Global Gains recommendation and JPMorgan Chase is an Income Investor recommendation.

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 owns shares of Goldman Sachs, but otherwise holds no financial position in any firms or funds mentioned here. The Fool has a disclosure policy.


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