The IPO class of 2011 has had more than its fair share of flops, plenty of hype, and even some big success stories. But hidden in this year's eclectic roster of newly public companies are a few diamonds in the rough that many investors have overlooked. Take a look at this list and you might find a few great gifts for your portfolio that will keep giving in 2012 and beyond.
A difficult choice
Winnowing down this list to just five companies was a challenge, and I'm sure that there are some I may have overlooked. However, these companies have all earned the support of our Foolish analysts, and each one has its own valuable take on an important market.
Change From First-Day Closing Price
What's the Big Idea?
|Solazyme (Nasdaq: SZYM )||$720 million||$12.08||(41.7%)||Microalgae can create sustainable fuel, nutritional supplements, and skin-care products.|
|Zipcar (Nasdaq: ZIP )||$661 million||$16.92||(39.6%)||A new kind of car-rental service that could supplant car ownership in major cities.|
|Jiayuan.com International (Nasdaq: DATE )||$229 million||$7.34||(32.2%)||There are over a billion people in China, millions come online every year, and a lot of them want a relationship.|
|Boingo Wireless (Nasdaq: WIFI )||$269 million||$8.10||(33.1%)||Tablets, laptops, and cellphones all need to get online, and Wi-Fi connectivity is often the best option.|
|Arcos Dorados (NYSE: ARCO )||$4.10 billion||$19.55||(7.8%)||Latin America doesn't have enough McDonald's locations...yet.|
Sources: IPO Scoop, Google Finance, and Yahoo! Finance. As of Nov. 25.
Our analysts are keen on Solazyme's varied uses for its patented algae-based processes, but the biggest opportunity seems to be in biofuels. Fool contributor Tim Beyers changed his mind on Solazyme after hearing about a biofuel test flight powered by the company's algae-based refined fuel blend. Alyce Lomax likes the stock so much she's picked up shares twice for her Rising Star portfolio.
Solazyme's other revenue streams include beauty products and food derivatives like algal flour, which is appreciated diversity away from the hotly contested biofuels arena. As a start-up with a still-tiny revenue stream, Solazyme is a risky play -- but success could bring huge gains.
Wheels when you want them
Zipcar has been one of David Meier's favorite stocks. He tabbed the company as a top pick at The Motley Fool's 2011 Investing Conference, and followed it up with a real-money commitment in his Trends and Trades Rising Star portfolio. Rick Munarriz agreed at the Investing Conference that car sharing will be the future, and Fool contributor Brian Stoffel chose Zipcar as one cornerstone of his retirement portfolio.
The pitch is compelling. Your car costs you money, especially if you live in a major city. Zipcar's bite-sized car rental service could save drivers thousands, and in the process create a legion of raving fans. Fool contributor John Maxfield sees a future in which a small investment in Zipcar could make you a millionaire. What do you think? Are we drinking too much Kool-Aid, or is Zipcar the next big thing?
Jiayuan.com is a fairly straightforward company, but one idea executed brilliantly can make billions -- just look at Google. The company's ticker should clue you in to its business model, and in case the uncertainty of Chinese dating sites freaks you out, take a look at analyst Sean Sun's pitch from the first purchase for his Dada Rising Star portfolio. Sean's an expert on China, and he liked the company enough to load up a second time. Both Sean and Rick Munarriz like Jiayuan's position as the largest dating site in China, because with social endeavors, a larger network frequently digs a deeper moat.
Modern mobile devices are built around data access, and not having that data can turn a slick new tablet into an expensive paperweight. Boingo fills the gap, with more than 400,000 Wi-Fi hotspots around the world. The clash between data-demanding mobile users and stressed wireless networks is a big opportunity for Boingo, as I pointed out earlier this year. Fool contributor Sean Williams, among the top stock pickers on Motley Fool CAPS, singled out Boingo as the must-buy IPO of 2011 for similar reasons. Until mobile carriers can figure out ways to give their users truly unlimited fast data connections, Wi-Fi will hold a vital place in the world's wireless infrastructure.
That's "Golden Arches" in Spanish
McDonald's (NYSE: MCD ) has been a dividend juggernaut for decades, so investors jumped at the chance to pick up shares of its Latin American franchisee. Motley Fool CAPS players are nearly unanimous in their support -- 97% have picked Arcos Dorados to outperform the S&P 500. The company was also analyst Matthew Argersinger's favorite IPO of 2011, thanks to its "ginormous" growth opportunities throughout Latin America.
If Arcos can emulate the success of McDonald's, it'll be a great portfolio addition -- the Golden Arches has seen its stock grow at a 16.3% annual rate annually for the past decade, handily trouncing the Dow's (INDEX: ^DJI ) weak 2% annual growth rate since 2001. With more room to grow, Arcos could be an even better option over the next decade.
Add these companies to your Watchlist for all the latest news and information, in 2012 and beyond. If you're looking for another great opportunity, take a look at the Motley Fool's top stock for this year. The market this company serves will be getting much bigger, so find out more before it takes off.