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 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 the 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
There were only two last week, with both scoring solid gains. The players are ranked below, according to their returns from their offering price to the close of their first trading day.

Grupo Aeroportuario del Centro Norte

• Ticker: Nasdaq: OMAB
• Industry: Mexican airport operator
• Deal terms: 20.9 million shares at $18 per share
• Lead manager: Citigroup
• Filed: Nov. 15
• Opening day: Nov. 29, opened at $22, closed at $20.85; 15.8% gain
• Bleacher banter: Priced above its proposed range of $14.50 to $16.50 per share

Netlist

• Ticker: Nasdaq: NLST
• Industry: Memory-device maker
• Deal terms: 6.25 million shares at $7 per share
• Lead manager: Thomas Weisel
• Filed: Aug. 18
• Opening day: Nov. 30, opened at $7.50, closed at $8.10; 15.7% gain
• Bleacher banter: Priced at low end of its proposed range

On deck
Several games are planned for this week, including:

Aegean Marine Petroleum Network

• Proposed ticker: NYSE: ANW
• Industry: Ship refueler
• Proposed deal terms: 12.5 million shares at $12 to $14 per share
• Lead manager: Bear Stearns
• Filed: Nov. 17

Allegiant Travel

• Proposed ticker: Nasdaq: ALGT
• Industry: Passenger airline
• Proposed deal terms: 5 million shares at $15 to $17 per share
• Lead managers: Merrill Lynch, Bear Stearns, and Raymond James
• Filed: May 15

Heelys

• Proposed ticker: Nasdaq: HLYS
• Industry: Footwear maker
• Proposed deal terms: 6.3 million shares at $16 to $18 per share
• Lead manager: Bear Stearns and Wachovia Securities
• Filed: Sept. 1

Penn Virginia GP Holdings

• Proposed ticker: NYSE: PVG
• Industry: Coal and natural gas processor
• Proposed deal terms: 6.3 million shares at $18 to $20 per share
• Lead managers: Lehman Brothers and UBS
• Filed: July 11

Games of the week
Allegiant Travel, based in Las Vegas, continues the recent IPO focus on aviation-related stocks. The company provides low-cost travel to cities catering to tourism, such as Las Vegas, Orlando, and Tampa. For the nine-month period ended in September, the company reported $10.3 million in profits and total operating revenues of $180.2 million, compared with $7.7 million in profits and total operating revenues of $92.4 million a year ago.

If you favor land-based transportation, Heelys may be the way to move your portfolio forward. The Texas company designs and manufactures footwear with a removable wheel so that the wearer can shift between walking, running, and skating by shifting their weight. The shoes are distributed through specialty apparel and sporting good stores, and department stores. For the nine months ended in September, Heelys netted $17.7 million in profits and net sales of $117.1 million, compared with $2.9 million in profits and net sales of $29.1 million a year ago.

Shares of both companies are expected to begin trading Friday. As always, make sure you do your own warm-ups and read a company's offering documents before getting in on the game.

In the bullpen
Altra Holdings, a machine manufacturer, announced terms of 10 million shares at $14 to $16 each. The lead manager is Merrill Lynch.

Artes Medical, a biotech, announced terms of 4.6 million shares at $12 to $14 each. The lead managers are Cowen and Lazard.

Cal Dive International, a diving-services company, announced terms of 22.2 million shares at $14 to $16 each. The lead managers are Banc of America and JPMorgan.

Claymont Steel Holdings, a steel-plate manufacturer, announced terms of 6.25 million shares at $15 to $17 each. The lead manager is Jefferies.

Dayton Superior, which provides concrete products, announced terms of 7.85 million shares at $13 to $15 each. The lead manager is Robert Baird.

DCT Industrial, a real estate developer, announced terms of 15 million shares at $11.50 to $12.50 each. The lead managers are Merrill Lynch and Wachovia.

Guidance Software, a software developer, announced terms of 5 million shares at $12.50 to $14.50 each. The lead managers are Morgan Stanley, Lehman Brothers, Wachovia, and A.G. Edwards.

Obagi Medical Products, which makes skin-care products, announced terms of 5.35 million shares at $13 to $15 each. The lead managers are JPMorgan, CIBC, Thomas Weisel, and Robert Baird.

Oculus Innovative Sciences, which makes health products, announced terms of 3.1 million shares at $12 to $14 each. The lead manager is Roth Capital.

US BioEnergy, an ethanol producer, announced terms of 9.4 million shares at $15 to $17 each. The lead managers are UBS and Piper Jaffray.

Sent down to the minors
No company announced postponements of planned offerings last week.

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

Affymax

• Proposed ticker: Nasdaq: AFFY
• Industry: biotech
• Proposed deal terms: 3.5 million shares at $22 to $24 each
• Lead manager: Morgan Stanley
• Filed: Nov. 30

Genesis Lease

• Proposed ticker: NYSE: GLS
• Industry: Irish aircraft lessor
• Proposed deal terms: 27.9 million American depositary shares at $21 to $23 each
• Lead managers: Citigroup and JPMorgan
• Filed: Nov. 27

Melco PBL Entertainment

• Proposed ticker: Nasdaq: MPEL
• Industry: Hong Kong casino operator
• Proposed deal terms: 53 million American depositary shares at $16 to $18 each
• Lead managers: Credit Suisse, Citigroup, and UBS
• Filed: Dec. 1

Disabled list
Asthmatx, a medical device maker, withdrew its planned offering last week, citing market conditions.

Champions
Meet our 2006 champs. Among companies that went public this year, these firms' percentage returns from their offer prices to last week's closing price rank them as the top five players:

Benchwarmers
Now meet our 2006 benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that went public this year, these firms' percentage returns from their offer prices to last week's closing price 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.

Last week, the IPO market and general market fared similarly. The IPO Plus Aftermarket (FUND:IPOSX), a mutual fund, lost 1.3%; the First Trust IPOX 100 (FUND:FPX), an ETF, slipped 1.7%; the Nasdaq fell 1.9%, and the Russell 2000 declined 1.4%.

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.

MasterCard is a Motley Fool Inside Value recommendation and JPMorgan Chase is an Income Investor pick.Need new ideas for your money? Talk stocks with other investors and our analysts when you give our newsletters a try.

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.