5 Broken IPOs Worth Buying Now

Remember that company that you were hoping would go public? When it finally did file for its IPO, you called up some of the underwriters to see if you could grab a piece of the offering. No dice! The freshly minted shares were reserved for their top clients.

Well, the one that got away is now coming back for you.

Many of the companies that have gone public over the past year have now fallen below their original offering prices. Even some of initial highfliers have been coming down hard in what is quickly becoming the market's seventh consecutive losing week.

Their paper loss is your gain.

Bobbing for bouncers
Many of the busted IPOs deserve to be discarded.

FriendFinder Networks (Nasdaq: FFN) went public at $10 last month. The operator of several online dating and hookup sites including AdultFriendFrinder and BigChurch is now down to $4.15, and it may never find its way back into the double digits. Losses continue to mount, and FriendFinder's hefty debt is attractive only to those who fancy the Rubenesque.

China's Renren (NYSE: RENN) is another recent debutante that just went public at an unsustainable valuation. It may take years for the social networking site to justify its original $5.6 billion price tag at its $14 IPO price. It is getting more tantalizing with every downtick, and yesterday broke below $8.  

However, let's go over a few of these underwater offerings that have what it takes to get back above their IPO prices.

Source: Hoover's.

Demand Media excels at cranking out timely low-cost content and then getting it in front of people. Through eHow, Cracked, and several other sites, Demand has it down to a science in determining what articles are worth assigning, how much it can pay, and how it can optimize views. Being labeled -- and possibly mislabeled -- as a "content farm" has hurt. Recent search engine algorithm tweaks have hurt traffic on some of its marquee sites. However, this is the company that put the optimization in search engine optimization. It will find a way to get its traffic higher. Ditto the share price.

Country Style Cooking was an easy sell during last year's IPO. The fast-growing chain of quick-service restaurants in China had no problem drawing in the hungry. The typical eatery was turning its tables 16 times during the course of an average day. Unfortunately its first public impressions haven't been as tasty as its Sichuan-style comfort food. Margins were crushed in its latest quarter, leaving investors to wonder if more seasoned leadership is necessary to take the chain to the next level. The good news is that comps continue to grow despite the breakneck expansion. Operational maladies are easier to fix than a faltering concept.

General Motors is revving its way back after the mother of all bailouts. It's true that auto sales were sluggish last month, and that the industry outlook isn't a whole lot better for the balance of the year. However, the new GM is truly an improved GM with a healthier balance sheet to boot.

ChinaCache is one of the many recent tech IPOs out of China to fall flat on its face. It is now trading for a little more than half of last fall's IPO price. Set aside the rollercoaster stock chart, and there's plenty to like here. ChinaCache's online services continue to gain in popularity. Analysts see ChinaCache earning $0.29 a share this year and $0.43 a share come 2012, giving it a reasonable multiple of 17 times next year's projected profitability.

Green Dot is the leading provider of prepaid debit cards, with 4.3 million cards in circulation. Reloadable debit cards may not seem very sexy, but they're becoming quite popular with consumers that are getting fed up with rising bank fees and folks who can't get their hands on traditional credit card plastic. More than 2.2 million Green Dot cards were activated during the first three months of the year, with customers adding a whopping $4.6 billion to their cards.

Wear thick gloves when catching falling steak knives
Obviously not all of these stocks will climb out of their holes and make their IPO buyers whole. The market will need to heat up again before some of these companies begin to claw their way back.

However, these are also five companies that must've been doing something right if they were able to smoke out top underwriters and pop higher in their debuts. The quality is there, bruises and all.

Which of these five IPOs are you the most likely to buy at this point? Share your thoughts in the comment box below.