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
Winner: Salary.com
- Ticker: Nasdaq: SLRY
- Industry: Compensation software provider
- Deal terms: 5.7 million shares, $10.50 per share
- Lead manager: Thomas Weisel
- Filed: Nov. 13
- Opening day: Feb. 15, opened at $13.50, closed at $12.52, 19.2% gain
- Bleacher banter: Priced above its proposed range of $8-$10 per share, and increased size of offering by 700,000 shares
Runner-up: Opnext
- Ticker: Nasdaq: OPXT
- Industry: Optical module manufacturer
- Deal terms: 16.9 million shares, $15 per share
- Lead manager: Goldman Sachs
- Filed: Oct. 27
- Opening day: Feb. 15, opened at $17, closed at $17.40, 16% gain
- Bleacher banter: Priced at high end of its proposed range
Quadra Realty Trust
- Ticker: NYSE: QRR
- Industry: Real estate investment trust
- Deal terms: 16.7 million shares, $15 per share
- Lead managers: Credit Suisse and Wachovia
- Filed: Nov. 9
- Opening day: Feb. 15, opened flat, closed at $15.16, 1.1% gain
- Bleacher banter: Priced at low end of its proposed range
On deck
There are no significant games scheduled for this week in one of the year's typically slow periods. Take a winter break, but bring your reading with you, because there are plenty of filings to review before things heat back up in two weeks.
Warming up in the bullpen
- Clearwire, a wireless broadband network operator, announced deal terms of 20 million shares at $23-$25 per share. The lead managers are Merrill Lynch and Morgan Stanley.
- Photowatt, a solar cell manufacturer, announced deal terms of 10.9 million shares at $15-$17 per share. The lead managers are BMO Capital Markets and UBS.
- Rosetta Genomics, a biotech, announced revised deal terms of 3.75 million shares at $7.50-$8.50 per share. The lead manager is C.E. Unterberg Towbin.
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 last week include:
BioHeart
- Proposed ticker: Nasdaq: BHRT
- Industry: Biotech
- Proposed deal terms: Not yet determined
- Lead manager: BMO Capital Markets
- Filed: Feb. 13
Cavium Networks
- Proposed ticker: Nasdaq: CAVM
- Industry: Semiconductor provider
- Proposed deal terms: Not yet determined
- Lead managers: Morgan Stanley and Lehman Brothers
- Filed: Feb. 13
EnerNoc
- Proposed ticker: Nasdaq: ENOC
- Industry: Intelligent power solutions provider
- Proposed deal terms: Not yet determined
- Lead managers: Credit Suisse and Morgan Stanley
- Filed: Feb. 12
Hireright
- Proposed ticker: Nasdaq: HIRE
- Industry: Employment screening provider
- Proposed deal terms: Not yet determined
- Lead manager: Credit Suisse
- Filed: Feb. 12
Insulet
- Proposed ticker: Nasdaq: PODD
- Industry: Medical device maker
- Proposed deal terms: Not yet determined
- Lead managers: JPMorgan and Merrill Lynch
- Filed: Feb. 14
JMP Group
- Proposed ticker: NYSE: JMP
- Industry: Investment bank
- Proposed deal terms: Not yet determined
- Lead managers: JMP Securities, Merrill Lynch, and Keefe, Bruyette & Woods
- Filed: Feb. 14
NovaBay
- Proposed ticker: NYSE: NBY
- Industry: Biopharmaceutical
- Proposed deal terms: Not yet determined
- Lead manager: Dundee Securities
- Filed: Feb. 14
Quicksilver Gas Services
- Proposed ticker: NYSE: KGS
- Industry: Natural gas processor
- Proposed deal terms: 3.375 million units, price range not yet determined
- Lead managers: UBS and Goldman Sachs
- Filed: Feb. 12
RSC Holdings
- Proposed ticker: Not yet determined
- Industry: Equipment rental provider
- Proposed deal terms: Not yet determined
- Lead managers: Deutsche Bank, Morgan Stanley, and Lehman Brothers
- Filed: Feb. 13
ShoreTel
- Proposed ticker: Nasdaq: SHOR
- Industry: Telecommunications provider
- Proposed deal terms: Not yet determined
- Lead managers: Lehman Brothers and JPMorgan
- Filed: Feb. 12
Solera Holdings
- Proposed ticker: NYSE: SLH
- Industry: Auto insurance software and services provider
- Proposed deal terms: Not yet determined
- Lead managers: Goldman Sachs and JPMorgan
- Filed: Feb. 12
TomoTherapy
- Proposed ticker: Nasdaq: TTPY
- Industry: Medical device developer
- Proposed deal terms: Not yet determined
- Lead managers: Merrill Lynch, Piper Jaffray, and Thomas Weisel
- Filed: Feb. 12
Disabled list
No withdrawals of any planned offerings were announced last week.
Champions
Meet our current champs. Among companies that went public during the last 12 months, these firms' percentage returns from their offer prices to their most recent closing prices rank them as the top five players:
|
Company |
Return |
Description |
IPO Date |
|---|---|---|---|
|
Omrix Biopharmaceuticals |
250.4% |
Biotech |
4/21/06 |
|
Riverbed Technology |
224.7% |
Tech |
9/20/06 |
|
Home Inns & Hotels |
222.2% |
Chinese hotel chain |
10/25/06 |
|
New Oriental Education |
178.7% |
Chinese educational services provider |
4/20/06 |
|
MasterCard |
177.7% |
Credit card services provider |
5/24/06 |
Benchwarmers
Now meet our current benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that went public during the last 12 months, these firms' percentage returns from their offer prices to their most recent closing prices rank them as the bottom five players:
|
Company |
Return |
Description |
IPO Date |
|---|---|---|---|
|
Vonage Holdings |
(68.1%) |
Telecom |
5/24/06 |
|
Aventine Renewable Energy |
(63.4%) |
Ethanol producer |
6/28/06 |
|
Alphatec Holdings |
(57.1%) |
Medical device maker |
6/1/06 |
|
Replidyne |
(49.6%) |
Biotech |
6/27/06 |
|
Visicu |
(46.6%) |
Health-care services provider |
4/4/06 |
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 players trailed the general market, with the IPO Plus Aftermarket
Keep reading the Fool to see how your favorite players perform as they mature!
We're publicly offering further Foolishness:
Sources: Renaissance Capital's IPOhome.com, SEC filings, Reuters.
Omrix Biopharmaceuticals is a Rule Breakers recommendation, while MasterCard is an Inside Value newsletter selection. Whatever your investing style, the Fool has a newsletter for you, and a free 30-day trial to match.
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.
