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
Several games took place last week, ranked below according to how the players performed.
Winner: Evercore Partners
- Industry: Investment banking
- Deal terms: $21 per share, above its projected range; 3.95 million shares
- Lead manager: Lehman Brothers
- Opening day: Aug. 11; opened at $25 and closed at $24.85; 18.3% gain
- Bleacher banter: The firm's focus on mergers and acquisitions helped distinguish it from other less well-received offerings from the industry this year.
Runner-up: Aircastle Limited
- Industry: Aircraft leasing
- Deal terms: $23 per share, at high end of range; 9.09 million shares
- Lead manager: JPMorgan Chase
- Opening day: Aug. 8; opened at $27.45 and closed at $26.60; 15.7% gain
- Bleacher banter: This aviation company proved itself to be a high flier, even in the face of a hostile environment for the industry last week, closing Friday at $27.05.
Loser: Qimonda AG
- Industry: Semiconductors
- Deal terms: $13 per American depositary share, below its projected range; 42 million shares
- Lead managers: Credit Suisse, Citigroup, and JPMorgan Chase
- Opening day: Aug. 9; opened at $13.50 and closed at $13.54; 4.2% gain
- Bleacher banter: Despite initial reports of strong U.S. interest, weak demand resulted in a 42% discount to the projected price range and 21 million fewer ADS priced.
On deck
Only one major IPO, other than a blank-check company, is slated for the coming week:
InnerWorkings
- Proposed ticker: Nasdaq: INWK
- Industry: Print solutions provider
- Proposed deal terms: $8-$9 per share; 10.6 million shares
- Lead managers: Morgan Stanley, Jefferies & Co., and Piper Jaffray
Game of the week
There's not much exciting action scheduled for this week. InnerWorkings is a printing company with rising revenues, as well as the usual pitfalls of a sector with low barriers to entry. Feel free to miss its debut and catch up with it later, if so inclined.
Warming up in the bullpen
No other companies announced further details of their offering plans.
Sent down to the minors
InterMetro Communications, a voice-over Internet service provider scheduled to make its debut last week, postponed its offering.
Minor-league developments
Get ready, get set . not yet! The latest filings announced last week include:
Claymont Steel Holdings
- Proposed ticker: Nasdaq: PLTE
- Industry: Steel manufacturer
- Proposed deal terms: Not yet determined
- Lead managers: Jefferies & Co.
- Filed: Aug. 7
Double-Take Software
- Proposed ticker: Nasdaq: DBTK
- Industry: Software developer
- Proposed deal terms: Not yet determined
- Lead managers: Cowen & Co., Thomas Weisel, CIBC World Markets, and Pacific Crest Securities
- Filed: Aug. 10
Global Geophysical Services
- Proposed ticker: Nasdaq: GGEO
- Industry: Seismic data collector
- Proposed deal terms: Not yet determined
- Lead managers: Jefferies & Co.
- Filed: Aug. 10
IPG Photonics
- Proposed ticker: Nasdaq: IPGP
- Industry: Fiber laser manufacturer
- Proposed deal terms: Not yet determined
- Lead managers: Merrill Lynch and Lehman Brothers
- Filed: Aug. 11
KBW
- Proposed ticker: NYSE: KBW
- Industry: Investment bank
- Proposed deal terms: Not yet determined
- Lead managers: KBW, Merrill Lynch, and Bank of America
- Filed: Aug. 11
ME Decision
- Proposed ticker: Nasdaq: MEDE
- Industry: Software provider
- Proposed deal terms: Not yet determined
- Lead managers: Cowen & Co., Wachovia Securities, CIBC World Markets, and Pacific Growth Equities
- Filed: Aug. 11
Superior Offshore International
- Proposed ticker: Nasdaq: SUPE
- Industry: Oil and gas services provider
- Proposed deal terms: Not yet determined
- Lead managers: Merrill Lynch and JPMorgan Chase
- Filed: Aug. 11
Thermage
- Proposed ticker: Nasdaq: THRM
- Industry: Medical device maker
- Proposed deal terms: Not yet determined
- Lead managers: Merrill Lynch, Thomas Weisel, Wachovia, CE Unterberg Towbin, and Maxim Group
- Filed: Aug. 10
Virtual Radiologic
- Proposed ticker: Nasdaq: VRAD
- Industry: Diagnostic image services provider
- Proposed deal terms: Not yet determined
- Lead managers: Goldman Sachs, Merrill Lynch, and William Blair
- Filed: Aug. 11
Willdan Group
- Proposed ticker: Nasdaq: XTNT
- Industry: Outsource services provider
- Proposed deal terms: Not yet determined
- Lead managers: Wedbush Morgan Securities
- Filed: Aug. 9
Xtent
- Proposed ticker: Nasdaq: XTNT
- Industry: Biotech
- Proposed deal terms: Not yet determined
- Lead managers: Piper Jaffray, Cowen & Co., Lazard Capital Markets, and RBC Capital Markets
- Filed: Aug. 7
Disabled list
Asset Capital, a Washington, D.C. real estate developer; The Go Daddy Group, an Internet domain name registrar; and GNC, a nutritional supplement retailer, each withdrew their planned offerings last week, citing unfavorable market conditions.
Current champions
Meet our current 2006 champs. Among companies that went public this calendar year, these firms' percentage returns -- from their offer prices to last week's closing price -- rank them as the top five players:
|
Company |
Ticker |
Return |
Description |
IPO Date |
|---|---|---|---|---|
|
Chipotle Mexican Grill |
|
124% |
Mexican restaurant operator |
1/25/06 |
|
CTC Media |
|
67.5% |
Russian television network operator |
6/1/06 |
|
Techwell |
|
53.3% |
Semiconductor designer |
6/21/06 |
|
H&E Equipment |
|
49.9% |
Industrial equipment service provider |
1/30/06 |
|
Western Refining |
|
44.6% |
Petroleum refiner |
1/19/06 |
Current benchwarmers
Now meet our current 2006 benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that went public this calendar year, these firms' percentage returns -- from their offer prices to last week's closing price -- rank them as the bottom five players:
|
Company |
Ticker |
Return |
Description |
IPO Date |
|---|---|---|---|---|
|
Vonage |
|
(61.8%) |
Broadband telephone services |
5/23/06 |
|
Traffic.com |
|
(58.3%) |
Traffic information provider |
1/24/06 |
|
Digital Music Group |
|
(50.2%) |
Digital music provider |
2/2/06 |
|
Iomai |
|
(50%) |
Biopharmaceutical company |
1/31/06 |
|
China GrenTech |
|
(47.2%) |
Chinese wireless services provider |
3/30/06 |
Groupies & 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.
Last week, the First Trust IPOX 100
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Sources for this article include Renaissance Capital's IPOhome.com, SEC filings, and Reuters news reports.
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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 .
