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 who'll play in 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
Several games were played, with one rolling into the year's champion rankings and another also flying high. The players are ranked according to their returns from their offering price to the close of their first trading day.

Heelys

• Ticker: Nasdaq: HLYS
• Industry: Footwear maker
• Proposed deal terms: 6.3 million shares at $21 per share
• Lead manager: Bear Stearns
• Filed: Sept. 1
• Opening day: Dec. 8, opened at $30.30, closed at $32.60; 55.2% gain
• Bleacher banter: Priced above its proposed range of $16 to $18 per share for the seventh-best first-day performance of the year

Allegiant Travel

• Ticker: Nasdaq: ALGT
• Industry: Passenger airline
• Proposed deal terms: 5 million shares at $18 per share
• Lead managers: Merrill Lynch, Bear Stearns, and Raymond James
• Filed: May 15
• Opening day: Dec. 8, opened at $24, closed at $25.10; 39.4% gain
• Bleacher banter: Priced above its proposed range of $15 to $17 per share

Aegean Marine Petroleum Network

• Ticker: NYSE: ANW
• Industry: Ship refueler
• Proposed deal terms: 12.5 million shares at $14 per share
• Lead manager: Bear Stearns
• Filed: Nov. 17, 2005
• Opening day: Dec. 8, opened at $15, closed at $16.02; 14.4% gain
• Bleacher banter: Priced at the high end of its proposed range

Penn Virginia GP Holdings

• Ticker: NYSE: PVG
• Industry: Coal and natural gas processor
• Proposed deal terms: 6.3 million shares at $18.50 per share
• Lead managers: Lehman Brothers and UBS
• Filed: July 11
• Opening day: Dec. 6, opened at $18, closed at $18.10; 2.2% loss
• Bleacher banter: Priced within its proposed range

On deck

This week will be a busy one, including:

Affymax

• Proposed ticker: Nasdaq: AFFY
• Industry: Biotech
• Proposed deal terms: 3.5 million shares at $22 to $24 per share
• Lead manager: Morgan Stanley
• Filed: July 28

Altra Holdings

• Proposed ticker: Nasdaq: AIMC
• Industry: Machine manufacturer
• Proposed deal terms: 10 million shares at $14 to $16 per share
• Lead manager: Merrill Lynch
• Filed: Sept. 29

Artes Medical

• Proposed ticker: Nasdaq: ARTE
• Industry: Biotech
• Proposed deal terms: 4.6 million shares at $12 to $14 per share
• Lead managers: Cowen and Lazard
• Filed: May 12

Atlas Energy Resources

• Proposed ticker: NYSE: ATN
• Industry: Oil and gas producer
• Proposed deal terms: 6.3 million shares at $19 to $21 per share
• Lead manager: UBS
• Filed: July 28

Cal Dive International

• Proposed ticker: NYSE: DVR
• Industry: Marine contractor
• Proposed deal terms: 22.2 million shares at $14 to $16 per share
• Lead managers: Banc of America and JPMorgan
• Filed: June 1

Carrols Restaurant Group

• Proposed ticker: Nasdaq: TAST
• Industry: Restaurant operator
• Proposed deal terms: 15 million shares at $14 to $16 per share
• Lead managers: Wachovia and Banc of America
• Filed: Sept. 22

DCT Industrial

• Proposed ticker: NYSE: DCT
• Industry: Real estate developer
• Proposed deal terms: 15 million shares at $11.50 to $12.50 per share
• Lead managers: Merrill Lynch and Wachovia
• Filed: Oct. 19

Double-Take Software

• Proposed ticker: Nasdaq: DBTK
• Industry: Software developer
• Proposed deal terms: 7.5 million shares at $9 to $11 per share
• Lead managers: Cowen and Thomas Weisel
• Filed: Aug. 10

Genesis Lease

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

Guidance Software

• Proposed ticker: Nasdaq: GUID
• Industry: Software developer
• Proposed deal terms: 5 million shares at $12.50 to $14.50 per share
• Lead manager: Morgan Stanley
• Filed: Sept. 15

IPG Photonics

• Proposed ticker: Nasdaq: IPGP
• Industry: Fiber laser maker
• Proposed deal terms: 9 million shares at $13.50 to $15.50 per share
• Lead managers: Merrill Lynch and Lehman Brothers
• Filed: Aug. 11

Isilon Systems

• Proposed ticker: Nasdaq: ISLN
• Industry: Computer systems maker
• Proposed deal terms: 8.35 million shares at $8.50 to $9.50 per share
• Lead managers: Morgan Stanley and Merrill Lynch
• Filed: Sept. 1

MEDecision

• Proposed ticker: Nasdaq: MEDE
• Industry: Software provider
• Proposed deal terms: 5.5 million shares at $11.50 to $13.50 per share
• Lead manager: Cowen
• Filed: Aug. 11

NewStar Financial

• Proposed ticker: Nasdaq: NEWS
• Industry: Commercial lender
• Proposed deal terms: 11 million shares at $15 to $17 per share
• Lead managers: Goldman Sachs and Morgan Stanley
• Filed: Sept. 21

Obagi Medical Products

• Proposed ticker: Nasdaq: OMPI
• Industry: Skin-care product maker
• Proposed deal terms: 5.35 million shares at $13 to $15 per share
• Lead manager: JPMorgan
• Filed: Sept. 13

Teekay Offshore Partners

• Proposed ticker: NYSE: TOO
• Industry: Shipping company (based in the Bahamas)
• Proposed deal terms: 7 million units at $19 to $21 per share
• Lead managers: Citigroup and Merrill Lynch
• Filed: Dec. 4

US BioEnergy

• Proposed ticker: Nasdaq: USBE
• Industry: Ethanol producer
• Proposed deal terms: 9.4 million shares at $15 to $17 per share
• Lead managers: UBS and Piper Jaffray
• Filed: Aug. 3

WSB Financial Group

• Proposed ticker: Nasdaq: WSFG
• Industry: Bank holding company
• Proposed deal terms: 2.3 million shares at $14 to $16 per share
• Lead manager: D.A. Davidson
• Filed: Aug. 31

Games of the week
Just in time for holiday shopping, the IPO calendar is crammed with offerings across various sectors, including the recently hot aviation sector. There's no clear breakout champ in the group, but don't be surprised if you see some solid performances during one of the last jam-packed weeks of the year.

For a change of pace, let's take a glance at an industrial company, Altra Holdings. The Massachusetts company designs motion control products, like industrial clutches, brakes, and gear drives.

For the nine-month period ended in September, the company reported $12 million net income and $347.5 million sales, up significantly from the same period a year ago, when it registered $1.2 million net income and $273.5 million net sales. Management believes that the mechanical power transmission industry in which Altra operates is fragmented, and that it can continue to leverage its strength as a leading manufacturer in certain key products that are distributed globally.

Shares of Altra are expected to begin trading on 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
No other companies disclosed additional deal terms.

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

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

CompBenefits

• Proposed ticker: Nasdaq: CBEN
• Industry: Insurance provider
• Proposed deal terms: Not yet determined
• Lead managers: Goldman Sachs and Banc of America
• Filed: Dec. 4

Employers Holdings

• Proposed ticker: NYSE: EIG
• Industry: Insurance provider
• Proposed deal terms: Not yet determined
• Lead manager: Morgan Stanley
• Filed: Dec. 4

Trina Solar

• Proposed ticker: NYSE: TSL
• Industry: Chinese solar module manufacturer
• Proposed deal terms: 5.3 American depositary shares at $13.50 to $15.50 per share
• Lead manager: Merrill Lynch
• Filed: Dec. 6

Disabled list
ImaRx, a biotech, withdrew its planned offering, citing unfavorable market conditions.

Logan's Roadhouse, a restaurant operator, withdrew its planned offering, citing an intended sale to private equity investors.

Champions
Meet our 2006 champs. Among companies that have gone 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 current 2006 benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that have gone 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. Do your scouting homework here, too, and make sure you read their prospectuses before buying season tickets.

Last week, the standout among our competitors was the IPO Plus Aftermarket (FUND:IPOSX). The mutual fund gained 3%, far above the 1.2% advance of the First Trust IPOX 100 (AMEX:FPX), an exchange-traded fund, as well as the general market returns of 1% for the Nasdaq and 1.5% for the Russell 2000.

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, and Reuters.

JPMorgan Chase is an Income Investor recommendation and MasterCard is an Inside Value 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 holds no financial position in any firms or funds mentioned here. The Fool has a disclosure policy.