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 the 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
The final IPO games of the calendar year played to mixed results. The players are ranked below, according to their returns from their offering price to the close of their first trading day.

Winner: Fuwei Films

• Ticker: Nasdaq: FFHL
• Industry: Chinese plastics manufacturer
• Deal terms: 3.75 million American depositary shares, $8.28 per share
• Lead manager: Maxim Group
• Filed: Nov. 24
• Opening day: Dec. 19, opened at $8.51, closed at $11.08, 33.8% gain
• Bleacher banter: Priced at low end of its expected range

Winner: Artes Medical

• Ticker: Nasdaq: ARTE
• Industry: Biotech
• Deal terms: 4.6 million shares, $6 per share
• Lead managers: Cowen and Lazard
• Filed: May 12
• Opening day: Dec. 20, opened at $6.70, closed at $7.67, 27.8% gain
• Bleacher banter: Priced substantially below its originally proposed range of $12-$14 per share

Winner: Melco PBL Entertainment

• Ticker: Nasdaq: MPEL
• Industry: Macau casino operator
• Deal terms: 60.25 million American depositary shares, $19 per share
• Lead managers: Credit Suisse, Citigroup, and UBS
• Filed: Dec. 1
• Opening day: Dec. 19, opened at $22, closed at $21.55, 13.4% gain
• Bleacher banter: Priced above its expected range of $16-$18 per share and increased offering size by 7.25 million shares

Winner: Trina Solar

• Ticker: NYSE: TSL
• Industry: Chinese solar-module manufacturer
• Deal terms: 5.3 American depositary shares, $18.50 per share
• Lead manager: Merrill Lynch
• Filed: Dec. 6
• Opening day: Dec. 19, opened at $26, closed at $20.28, 9.6% gain
• Bleacher banter: Priced above its expected range of $13.50-$14.50 per share

Winner: Claymont Steel Holdings

• Ticker: Nasdaq: PLTE
• Industry: Steel manufacturer
• Deal terms: 8.7 million shares, $17 per share
• Lead manager: Jefferies
• Filed: Aug. 7
• Opening day: Dec. 19, opened at $18, closed at $18.44, 8.5% gain
• Bleacher banter: Priced at high end of its expected range and increased offering size by 2.45 million shares

Winner: Dayton Superior

• Ticker: Nasdaq: DSUP
• Industry: Concrete-products manufacturer
• Deal terms: 7.9 million shares, $12 per share
• Lead manager: Robert Baird
• Filed: Oct. 4
• Opening day: Dec. 20, opened at $12, closed at $11.50, 4.2% loss
• Bleacher banter: Priced below its proposed range of $13-$15 per share

Loser: Solarfun Power Holdings

• Ticker: Nasdaq: SOLF
• Industry: Chinese solar-power manufacturer
• Deal terms: 12 million American depositary shares, $12.50 per share
• Lead manager: Goldman Sachs
• Filed: Dec. 11
• Opening day: Dec. 21, opened at $12.50, closed at $9.96, 20.3% loss
• Bleacher banter: Priced at midpoint of its proposed range

On deck
No offerings are scheduled until January.

Games of the week
When 2007 rolls in, you'll likely be busy delving into the research for more than 100 companies expected to go public in the coming year. Among them, the tech and energy sectors will look to capitalize on this year's strong performance, as well as additional Chinese offerings and private-equity players looking to reap the financial rewards of the IPO market. Much-hyped debuts include the $750 million offering from Fortress Investment, the first hedge fund to tap the public-equity market, and a $500 million offering from Interactive Brokers Group.

In the meantime, let your family enjoy seeing you without your nose buried in a prospectus!

Warming up in the bullpen
No company announced additional deal terms last week.

Sent down 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:

Cheniere Energy Partners

• Proposed ticker: Nasdaq: CHEN
• Industry: Liquefied-natural-gas terminal operator
• Proposed deal terms: Not yet determined
• Lead managers: Citigroup, Merrill Lynch, and Credit Suisse
• Filed: Dec. 21

Clearwire

• Proposed ticker: Nasdaq: CLWR
• Industry: Broadband operator
• Proposed deal terms: Not yet determined
• Lead managers: Merrill Lynch, Morgan Stanley, and JPMorgan
• Filed: Dec. 19 (originally filed in May and withdrawn in July)

FGX International

• Proposed ticker: Nasdaq: FGXI
• Industry: Glasses manufacturer
• Proposed deal terms: Not yet determined
• Lead manager: Deutsche Bank
• Filed: Dec. 20

Glu Mobile

• Proposed ticker: Nasdaq: GLUU
• Industry: Mobile-phone-game provider
• Proposed deal terms: Not yet determined
• Lead manager: Goldman Sachs
• Filed: Dec. 19

Orexigen

• Proposed ticker: Nasdaq: OREX
• Industry: Biotech
• Proposed deal terms: Not yet determined
• Lead manager: Merrill Lynch
• Filed: Dec. 19

Pinnacle Gas Resources

• Proposed ticker: Nasdaq: PINN
• Industry: Natural-gas explorer
• Proposed deal terms: Not yet determined
• Lead manager: Friedman Billings
• Filed: Dec. 21

Disabled list
EduTrades, a financial-education firm, and Telesat Holding, a Canadian satellite-service provider, each withdrew their planned offerings.

Champions
Meet our 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.

Benchwarmers
Now meet our 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.

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-focused funds performed better than the general market, with both the First Trust IPOX 100 (AMEX:FPX), an ETF, and the IPO Plus Aftermarket (FUND:IPOSX), a mutual fund, tying with a 0.5% loss, better than the 1.5% decline of the Russell 2000 and Nasdaq's 2.3% loss.

Keep reading the Fool to see how your favorite players perform as they mature, and watch for more scouting reports in 2007!

We're publicly offering further Foolishness:

• The IPO Lock-Up Period

Sources: Renaissance Capital's IPOhome.com, SEC filings, Reuters.

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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.