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 just cheering 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
Several games were played last week to kick off the first busy week of this half of the IPO season. The players are ranked below, according to their returns from their offering price to the close of their first trading day.

Champion: Riverbed Technology

• Ticker: Nasdaq: RVBD
• Industry: Tech
• Deal terms: 8.8 million shares, $9.75 per share
• Lead managers: Goldman Sachs, Citigroup, and Deutsche Bank
• Filed: April 20
• Opening day: Sept. 21, opened at $14.60, closed at $15.30; 56.9% gain
• Bleacher banter: Priced above its expected $7-$8.50 per share, and high demand led to an increase in size by 400,000 shares; one of the strongest debuts yet this year.

Winner: CommVault

• Ticker: Nasdaq: CVLT
• Industry: Software provider
• Deal terms: 11.1 million shares, $14.50 per share
• Lead managers: Credit Suisse and Goldman Sachs
• Filed: March 17
• Opening day: Sept. 22, opened at $16, closed at $17; 17.2% gain
• Bleacher banter: Priced at high end of range; one of three strong tech debuts this week.

Winner: DivX

• Ticker: Nasdaq: DIVX
• Industry: Software provider
• Deal terms: 9.1 million shares, $16 per share
• Lead managers: JP Morgan, Banc of America, and Cowen
• Filed: May 5
• Opening day: Sept. 22, opened at $19.50, closed at $18.70; 16.9% gain
• Bleacher banter: Priced above its proposed $12-$14 range; one of three strong tech debuts this week.

Winner: Hiland Holdings

• Ticker: Nasdaq: HPGP
• Industry: Natural gas processor
• Deal terms: 7 million units, $18.50 per share, at mid-point of range
• Lead manager: Lehman Brothers
• Filed: May 26
• Opening day: Sept. 21, opened at $19.26, closed at $19.53; 5.6% gain
• Bleacher banter: Priced at the midpoint of its proposed range.

Winner: Home Diagnostics

• Ticker: Nasdaq: HDIX
• Industry: Diabetic product manufacturer
• Deal terms: 6.6 million shares, $12 per share
• Lead managers: JP Morgan and Piper Jaffray
• Filed: May 1
• Opening day: Sept. 21, opened flat, closed at $12.61; 5.1% gain
• Bleacher banter: Priced below its expected range of $14-$16 per share.

Loser: Porter Bancorp

• Ticker: Nasdaq: PBIB
• Industry: Regional banking (Kentucky)
• Deal terms: 1.6 million shares, $24 per share
• Lead managers: Sandler O'Neill and Keefe, Bruyette, & Woods
• Filed: April 11
• Opening day: Sept. 22, opened at $24.25, closed at $23; 4.2% loss
• Bleacher banter: Priced within its proposed $23-$26 range.

Loser: Warner Chilcott

• Ticker: Nasdaq: WCRX
• Industry: Pharmaceutical
• Deal terms: 70.6 million shares, $15 per share
• Lead managers: Goldman Sachs, Credit Suisse, JP Morgan, and Morgan Stanley
• Filed: June 9
• Opening day: Sept. 21, opened at $14.75 per share, closed at $14.95; 0.3% loss
• Bleacher banter: Priced below its expected $17-$19 per share, and the size of the offering and the company's debt burden likely impacted performance.

On deck
Several major IPOs are slated for the coming week, including the following:

Bare Escentuals

• Proposed ticker: Nasdaq: BARE
• Industry: Cosmetics manufacturer
• Proposed deal terms: 16 million shares, $15-$17 per share
• Lead managers: Goldman Sachs and CIBC World Markets
• Filed: June 30

CBRE Realty Finance

• Proposed ticker: NYSE: CBF
• Industry: Commercial REIT
• Proposed deal terms: 10 million shares, $15-$17 per share
• Lead managers: Credit Suisse, Deutsche Bank, Citigroup, Wachovia, and JMP Securities
• Filed: March 3

EV Energy Partners

• Proposed ticker: Nasdaq: EVEP
• Industry: Oil and gas developer
• Proposed deal terms: 3.9 million units, $19-$21 per unit
• Lead managers: A.G. Edwards, Raymond James, Wachovia, and Oppenheimer
• Filed: May 15

ICF International

• Proposed ticker: Nasdaq: ICFI
• Industry: Government consultant
• Proposed deal terms: 4.67 million shares, $14-$16 per share
• Lead managers: UBS, Stifel Nicolaus, William Blair, and Jefferies
• Filed: May 11

ImaRX Therapeutics

• Proposed ticker: Nasdaq: IMRX
• Industry: Biopharmaceutical
• Proposed deal terms: 5 million shares, $10-$12 per share
• Lead managers: CIBC World Markets, Jefferies, and First Albany Capital
• Filed: May 19

InterMetro Communications

• Proposed ticker: AMEX: ITR
• Industry: Telecommunications
• Proposed deal terms: 2.225 million shares, $8-$10 per share
• Lead managers: Ladenburg Thalmann and Wunderlich Securities
• Filed: May 12

Mindray Medical International

• Proposed ticker: NYSE: MR
• Industry: Chinese medical device maker
• Proposed deal terms: 20 million ADSes, $10-$12 per share
• Lead managers: Goldman Sachs and UBS
• Filed: Sept. 6

Omni Financial Services

• Proposed ticker: Nasdaq: OFSI
• Industry: Bank holding company
• Proposed deal terms: 3 million shares, $10-$12 per share
• Lead managers: Sandler O'Neill and Keefe, Bruyette & Woods
• Filed: June 14

Shutterfly

• Proposed ticker: Nasdaq: SFLY
• Industry: Online photo service provider
• Proposed deal terms: 5.8 million shares, $13-$15 per share
• Lead managers: JP Morgan, Piper Jaffray, and Jefferies
• Filed: June 29

Games of the week
Among the games scheduled for this busy week, take a closer look at Bare Escentuals and Mindray Medical.

Bare Escentuals specializes in mineral-based cosmetics and eschews department-store counters for home shopping channels, specialty retailers, and its own boutiques. The company boasts net sales up 66% the first half of this year and is growing quickly, but it does have a balance sheet lined with debt.

The company's debut will mark the first time in nine years that a cosmetics company has gone public. Whether investors take a shine to the stock may depend on how they view the fate of high-end cosmetics in a worsening economy.

Mindray Medical, a Chinese medical-device company that offers more than 40 products around the world, may benefit from the recent success of New Oriental Education (NYSE:EDU), one of the top IPO performers this year.

Unlike many other device manufacturers, the company is profitable and has been in business for 15 years. Expect Mindray Medical to set itself apart from the lagging medical equipment sector and make its own healthy mark on the market.

Warming up in the bullpen
Achillion Pharmaceuticals announced deal terms of 4.5 million shares, offered at $14-$16 per share. The lead managers are Cowen, CIBC World Markets, and JMP Securities.

Acme Packet, a telecommunications services provider, announced deal terms of 11.5 million shares, offered at $6.50-$7.50 per share. The lead managers are Goldman Sachs, Credit Suisse, JP Morgan, and ThinkEquity Partners.

BioVex, a biotech, announced deal terms of 3.4 million shares, offered at $11-$13 per share. The lead managers are Janney Montgomery and Stifel Nicolaus.

Southern National Bancorp of Virginia, a regional bank, announced deal terms of 1.8 million shares, offered at $13-$15 per share. The lead manager is FIG Partners.

Venoco, an oil and gas exploration company, announced the second increase in deal terms of its planned offering, to $402.5 million from $345 million, without providing further details regarding the number of shares. The lead managers are Credit Suisse, Lehman Brothers, JP Morgan, A.G. Edwards, and BMO Capital Markets.

Willdan Group, an outsource service provider, announced deal terms of 2 million shares, offered at $9-$10 per share. The lead manager is Wedbush Morgan.

Sent down to the minors
Hawkeye Holdings, an ethanol producer, delayed its public offering planned for last week, citing general market and energy sector conditions.

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

Carrols Holdings Corporation

• Proposed ticker: Nasdaq: CARR
• Industry: Restaurant operator
• Proposed deal terms: Not yet determined
• Lead managers: Wachovia and Bank of America
• Filed: Sept. 22

Danaos

• Proposed ticker: NYSE: DAC
• Industry: Greek shipping company
• Proposed deal terms: 10.25 million shares, $20-$22 per share; expected week of Oct. 2
• Lead managers: Merrill Lynch and Citigroup
• Filed: Sept. 19

Guidance Software

• Proposed ticker: Nasdaq: GUID
• Industry: Software developer
• Proposed deal terms: Not yet determined
• Lead managers: Morgan Stanley, Lehman Brothers, Wachovia, and A.G. Edwards
• Filed: Sept. 15

New Star Financial

• Proposed ticker: Nasdaq: NEWS
• Industry: Commercial lender
• Proposed deal terms: Not yet determined
• Lead managers: Goldman Sachs, Morgan Stanley, Citigroup, and Wachovia Securities
• Filed: Sept. 21

Paradigm Ltd.

• Proposed ticker: Nasdaq: PARA
• Industry: Software provider
• Proposed deal terms: Not yet determined
• Lead managers: Lehman Brothers, UBS, and Bank of America
• Filed: Sept. 20

St. Francis Medical Technologies

• Proposed ticker: Nasdaq: SFMT
• Industry: Medical device maker
• Proposed deal terms: Not yet determined
• Lead managers: Citigroup, JP Morgan, Piper Jaffray, and Thomas Weisel
• Filed: Sept. 21

Telesat Holding

• Proposed ticker: Nasdaq: TSAT
• Industry: Satellite services provider
• Proposed deal terms: Not yet determined
• Lead managers: Goldman Sachs, Citigroup, and RBC Capital Markets
• Filed: Sept. 18

Disabled list
No companies announced withdrawals of their offerings during the last week.

Current champions
Meet our current 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:

Current benchwarmers
Now meet our current 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 to 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 First Trust IPOX 100 (AMEX:FPX), an ETF, and the IPO Plus Aftermarket (FUND:IPOSX), a mutual fund, tied for first, each posting a mere 0.3% decline. The broader market fared worse, with the Nasdaq slipping 0.7% and the Russell 2000 losing 1.5%.

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, 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.