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 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: Greenlight Capital Re

• Ticker: Nasdaq: GLRE
• Industry: Cayman Islands-based reinsurance provider
• Deal terms: 10.3 million shares, $19 per share
• Lead managers: Lehman and UBS
• Filed: Jan. 16
• Opening day: May 24, opened at $23, closed at $24.03, 26.5% gain
• Bleacher banter: Priced above its proposed range of $16-$18 per share

Sirtris Pharmaceuticals

• Ticker: Nasdaq: SIRT
• Industry: Biopharmaceutical
• Deal terms: 6 million shares, $10 per share
• Lead managers: JP Morgan and CIBC World Markets
• Filed: March 1
• Opening day: May 23, opened at $11, closed at $10.76, 7.6% gain
• Bleacher banter: Priced at midpoint of its proposed range and increased size of offering by 1 million shares

B&G Foods

• Ticker: NYSE: BGS
• Industry: Food manufacturer
• Deal terms: 13.9 million shares, $13 per share
• Lead managers: Credit Suisse and Lehman
• Filed: May 9
• Opening day: May 23, opened at $13.50, closed at $13.26, 2% gain
• Bleacher banter: Priced at midpoint of its proposed range

Clean Energy Fuels Corp.

• Ticker: Nasdaq: CLNE
• Industry: Alternative energy provider
• Deal terms: 10 million shares, $12 per share
• Lead manager: WR Hambrecht
• Filed: Sept. 6
• Opening day: May 25, opened flat, closed at $12.04, 0.3% gain
• Bleacher banter: Priced below proposed range of $13-$17 per share and existing shareholders did not sell their 10 million shares as originally planned

STARLIMS

• Ticker: Nasdaq: LIMS
• Industry: Israeli laboratory software provider
• Deal terms: 2.1 million shares, $13.50 per share
• Lead managers: Oppenheimer and JMP Securities
• Filed: May 4
• Opening day: May 24, opened flat, closed at $13.53, 0.2% gain
• Bleacher banter: Priced at low end of its proposed range

Helicos BioSciences

• Ticker: Nasdaq: HLCS
• Industry: Life sciences company
• Proposed deal terms: 5.4 million shares, $9 per share
• Lead manager: UBS
• Filed: Feb. 28
• Opening day: May 24, opened flat, closed at $8.47, 5.9% loss
• Bleacher banter: Priced below downward revised range of $10-$11 per share

RSC Equipment Rental

• Ticker: NYSE: RRR
• Industry: Equipment rental provider
• Deal terms: 20.8 million shares, $22 per share
• Lead managers: Deutsche Bank, Morgan Stanley, and Lehman
• Filed: Feb. 13
• Opening day: May 23, opened at $21.70, closed at $19, 13.6% loss
• Bleacher banter: Priced below its proposed range of $23-$25 per share

On deck

Amicus Therapeutics

• Proposed ticker: Nasdaq: FOLD
• Industry: Pharmaceutical
• Proposed deal terms: 5 million shares, $14-$16 per share
• Lead managers: Morgan Stanley and Merrill Lynch
• Filed: March 30

Jazz Pharmaceuticals

• Proposed ticker: Nasdaq: JAZZ
• Industry: Pharmaceutical
• Proposed deal terms: 6 million shares, $24-$26 per share
• Lead managers: Morgan Stanley and Lehman
• Filed: March 9

LDK Solar

• Proposed ticker: Nasdaq: LDK
• Industry: Chinese solar wafer manufacturer
• Proposed deal terms: 17.4 million American depositary shares, $25-$27 per share
• Lead managers: Morgan Stanley and UBS
• Filed: May 11

Response Genetics

• Proposed ticker: Nasdaq: RGDX
• Industry: Biotech
• Proposed deal terms: 3 million shares, $7-$8 per share
• Lead managers: Maxim Group
• Filed: Dec. 21

Game of the week
Let's take a look at LDK Solar, which looks to shine brighter than the biopharmaceuticals with which it is sharing the field this week.

The Chinese solar wafer manufacturer, founded in 2005, employs roughly 3,145 employees. The company produces multicrystalline solar wafers which are the principal raw material used to make solar cells that convert sunlight into electricity. The majority of the company's sales so far have been in China. 

LDK Solar generated revenues of $105.5 million and net income of $25.9 million in 2006, compared to zilch in the revenue column and a net loss of $274,000 for the prior year. Through the end of the quarter ended in March, the company generated revenues of $73.4 million and net income of $21.6 million compared to no revenues and a $440,000 net loss for the same period a year ago.

LDK Solar believes that its rapid growth and strong market position are attributable to its status as a pure-play multicrystalline solar wafer manufacturer, cost-effective production, large-scale manufacturing capacity, strong relationships, and experienced management. The company seeks to strengthen its position by increasing production capacity and improving cost competitiveness. Proceeds from the offering will be used to expand its production capacity, secure polysilicon feedstock which is in short supply, boost research and development, and for general corporate purposes, including potential acquisitions.

Demand for solar cell manufacturers has been strong. Since December 2005, eight IPOs have been priced. First Solar (NASDAQ:FSLR), the only U.S. firm, leads the pack in terms of aftermarket performance, returning 233.6% as of last Friday. The other seven are Chinese companies, which have also performed well. Trina Solar (NYSE:TSL), which debuted in December, is now up 164.5%, and the most recently priced company, China Sunergy (NASDAQ:CSUN), which went public May 16, is now up 24.1%.

Shares are expected to begin trading Friday. 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
Aegerion, a therapeutics developer, announced deal terms of 5 million shares at $12-$14 per share. The lead managers are Lehman and CIBC World Markets.

Blackstone Group, a private equity firm, announced deal terms of 133 million units at $29-$31 per unit. The firm also announced it will sell $3 billion worth of nonvoting units to China at a 4.5% discount to the IPO price. The lead managers are Morgan Stanley and Citigroup.

Infinera, an optical systems company, announced deal terms of 14 million shares at $10-$12 per share. The lead managers are Goldman Sachs, Citigroup, and JP Morgan.

GeoVera Insurance Holdings, a specialty property insurance company, announced deal terms of 5.9 million shares at $16-$18 per share. The lead managers are JP Morgan and Merrill Lynch.

Limelight Networks, a content delivery service provider, announced deal terms of 14.4 million shares at $10-$12 per share. The lead managers are Goldman Sachs and Morgan Stanley.

McleodUSA, a communications services provider, announced deal terms of 10.7 million shares at $13-$15 per share. The lead managers are Deutsche Bank and Jefferies.

Yingli Green Energy, a Chinese photovoltaic manufacturer, announced deal terms of 29 million American depositary shares at $11-$13 per share. The lead managers are Goldman Sachs and UBS.

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

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

Amedica

• Proposed ticker: Nasdaq: AMCA
• Industry: Orthopedics implants company
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley, Jefferies, and CIBC
• Filed: May 22

DemandTec

• Proposed ticker: Nasdaq: DMAN
• Industry: Retail software provider
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley and Credit Suisse
• Filed: May 24

Duff & Phelps

• Proposed ticker: NYSE: DUF
• Industry: Investment bank
• Proposed deal terms: Not yet determined
• Lead managers: Goldman Sachs and UBS
• Filed: May 23

Imperium Renewables

• Proposed ticker: Nasdaq: IMPR
• Industry: Biodiesel producer
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley, Lehman, and UBS
• Filed: May 23

Vitamin Shoppe

• Proposed ticker: NYSE: VSI
• Industry: Vitamin and supplement retailer and direct marketer
• Proposed deal terms: Not yet determined
• Lead managers: Bear Stearns, Lehman, and Banc of America
• Filed: May 23

Wells REIT

• Proposed ticker: Nasdaq: WELL
• Industry: Commercial office REIT
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley and JP Morgan
• Filed: May 23

Disabled list
No planned offerings were withdrawn 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:

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:

Groupies & 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.

Our players turned in a mixed performance last week, with the First Trust IPOX 100 (AMEX:FPX), an ETF, and the Russell 2000 leading the field with each scoring an 0.8% gain, while the Nasdaq remained essentially flat and the IPO Plus Aftermarket (FUND:IPOSX), a mutual fund, slipped 0.1%.

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

New Oriental Education is a Global Gains recommendation. Omniture is a Stock Advisor selection. 

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 owns shares of Goldman Sachs, but otherwise holds no financial position in any firms or funds mentioned here. The Fool has a disclosure policy.