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

• Winner: Aruba Networks
• Ticker: Nasdaq: ARUN
• Industry: Security-software provider
• Deal terms: 8 million shares, $11 per share
• Lead manager: Goldman Sachs
• Filed: Dec. 15
• Opening day: March 27, opened at $14, closed at $14.15, 28.6% gain
• Bleacher banter: Priced above its proposed range of $8 to $10 per share
  
• Capital Product Partners
• Ticker: Nasdaq: CPLP
• Industry: Greek shipping-vessel charterer
• Deal terms: 11.8 million American depositary shares, $21.50 per share
• Lead manager: Merrill Lynch
• Filed: March 19
• Opening day: March 30, opened at $26, closed at $26.75, 24.4% gain
• Bleacher banter: Priced above its proposed range of $19 to $21 per share

• Super Micro Computer
• Ticker: Nasdaq: SMCI
• Industry: Computer-component manufacturer
• Deal terms: 8 million shares, $8 per share
• Lead manager: Merrill Lynch
• Filed: Nov. 2
• Opening day: March 29, opened at $8.85, closed at $8.76, 9.5% gain
• Bleacher banter: Priced below its proposed range of $9.50 to $11.50 per share
  
• eTelecare Global Solutions
• Ticker: Nasdaq: ETEL
• Industry: Outsourcing provider
• Deal terms: 5.5 million shares, $13.50 per share
• Lead managers: Morgan Stanley and Deutsche Bank
• Filed: March 13
• Opening day: March 28, opened at $13.75, closed at $14.55, 7.8% gain
• Bleacher banter: Priced at midpoint of its proposed range
  
• Seno Rx
• Ticker: Nasdaq: SENO
• Industry: Medical-device maker
• Deal terms: 5.5 million shares, $8 per share
• Lead manager: Banc of America
• Filed: May 26
• Opening day: March 29, opened at $8.17, closed at $8.18, 2.3% gain
• Bleacher banter: Priced below revised lowered range of $9 to $10 per share.

• Flagstone Reinsurance
• Ticker: NYSE: FSR
• Industry: Bermuda-based reinsurer
• Deal terms: 13 million American depositary shares, $13.50 per share
• Lead managers: Lehman and Citigroup
• Filed: Oct. 24
• Opening day: March 30, opened at $13.50, closed at $13.48,  0.1% loss
• Bleacher banter: Priced at midpoint of its proposed range

• GSI Technology
• Ticker: Nasdaq: GSIT
• Industry: Circuit maker
• Deal terms: 6.1 million shares, $5.50 per share
• Lead managers: Needham and W.R. Hambrecht
• Filed: Jan. 10
• Opening day: March 29, opened flat, closed at $5.29, 3.8% loss
• Bleacher banter: Priced below its proposed range of $6.50 to $8 per share and did not include 1.87 million shares originally planned to be offered from selling by shareholders

On deck

• Veraz Networks
• Proposed ticker: Nasdaq: VRAZ
• Industry: Softswitch provider
• Proposed deal terms: 9 million shares, $10-$12 per share
• Lead managers: Credit Suisse and Lehman
• Filed: Oct. 20

Game of the week
You might be better off spending your time this week hunting for Easter eggs than looking for a new treat for your portfolio.

Only one company, Veraz Networks, a California-based tech formed in 2001, is slated to come to market. The tech company provides softswitches, media gateways, and digital-compression products to wireline, wireless, and broadband service providers, and it has yet to turn a profit. Veraz reported $99.6 million in revenues for last year, compared with $76.2 million in revenues for 2005, and net losses of $13.9 million in 2006 compared with $14.3 million in 2005. As of Dec. 31, the company's accumulated deficit was $59.9 million.

Shares are expected to begin trading Thursday. As always, make sure you do your own warm-ups and read through a company's offering documents, including the risk factors, before getting in on the game!

Warming up in the bullpen

• Comverge, a provider of clean-energy solutions, announced deal terms of 4.7 million shares at $15-$17 per share. The lead manager is Citigroup.
  
  
• EndoCeutics, a Canadian pharmaceutical, announced deal terms of 5.75 million American depositary shares at $11-$13 per share. The lead manager is First Albany.

Sent down to the minors
No planned offerings scheduled for last week were postponed.

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

• Amicus Pharmaceuticals
• Proposed ticker: Nasdaq: FOLD
• Industry: Biopharmaceutical
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley and Merrill Lynch
• Filed: March 30

• Care Investment Trust
• Proposed ticker: NYSE: CRE
• Industry: Real estate investment trust
• Proposed deal terms: Not yet determined
• Lead managers: Credit Suisse and Merrill Lynch
• Filed: March 29

• Data Domain
• Proposed ticker: Nasdaq: DDUP
• Industry: Tech-storage appliance provider
• Proposed deal terms: Not yet determined
• Lead managers: Goldman Sachs and Morgan Stanley
• Filed: March 30

• Geovera
• Proposed ticker: Nasdaq: GEOV
• Industry: Specialty insurer
• Proposed deal terms: Not yet determined
• Lead managers: JPMorgan and Merrill Lynch
• Filed: March 26
  
• Merrion Pharmaceuticals
• Proposed ticker: Nasdaq: MERR
• Industry: Irish pharmaceutical
• Proposed deal terms: Not yet determined
• Lead manager: Punk, Ziegel
• Filed: March 30

• NovaCardia
• Proposed ticker: Nasdaq: NCAR
• Industry: Pharmaceutical
• Proposed deal terms: Not yet determined
• Lead managers: JPMorgan and Credit Suisse
• Filed: March 29

• Quark Biotech
• Proposed ticker: Nasdaq: QURK
• Industry: Biotech
• Proposed deal terms: Not yet determined
• Lead managers: JPMorgan and Banc of America
• Filed: March 30

• Spectra Energy Partners
• Proposed ticker: NYSE: SEP
• Industry: Natural-gas transporter
• Proposed deal terms: Not yet determined
• Lead managers: Citigroup and Lehman
• Filed: March 30

Disabled list
No planned offerings were withdrawn last week.

Champions
Meet our current champs. Among companies that have gone public during the past 12 months, these firms' percentage returns from their offer prices to their most recent closing prices rank them as the top five players.

Benchwarmers
Now meet our current benchwarmers -- that's nicer to say than "losers," isn't it? Among companies that have gone public during the past 12 months, these firms' percentage returns from their offer prices to their most recent closing prices 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.

Equities fell last week, but the IPO-focused players held up better than the general market. The First Trust IPOX 100 (AMEX:FPX), an ETF, slipped 0.6%, and the IPO Plus Aftermarket (FUND:IPOSX), a mutual fund, declined 0.8%, while the Russell fell 1.1% and the Nasdaq lost 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

Omrix Biopharmaceuticals is a  Rule Breakers recommendation. MasterCard is an Inside Value selection. New Oriental Education is a Global Gains pick, while Omniture has been recommended to Stock Advisor subscribers. Try out any of these Foolish services with a free, 30-day, no-risk trial subscription.

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.