It was a pretty good year for those investing in IPOs. Of more than 200 IPOs from this year that I looked at (excluding any OTC or Pink Sheets offerings), the average return to date is around 23%, with just less than 65% of the IPOs trading above the offering price. While there are definitely some dogs in the bunch, there are also a number of serious standouts, with some stocks already doubling, tripling, or, in one case, even hitting six-bagger status.
But as bankers try to strike that balance between bringing in underwriting revenue and bringing good companies to market, some are bound to fall short. This year I'm singling out CIBC World Markets, the division of Canadian Imperial Bank Commerce that houses its investment banking division, as having fallen short of delivering top-quality offerings to investors. Of firms that have done 10 or more IPOs this year, CIBC has the lowest percentage of offerings trading above the offering price, and the lowest median return on all deals. Though CIBC's average IPO return of about 27% was very respectable (overall returns are based on author analysis using data from CapitalIQ), it drops to a paltry 4% if you exclude the Omrix Biopharmaceuticals
Below are a few of CIBC's misses this year.
Allot of red
That tricky Troxatyl
Early-stage biopharma company SGX Pharmaceuticals
It's nice to hit a home run once in a while, and a few too many strikeouts puts CIBC on my naughty list.
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Many companies that go through the IPO process do so because they need capital to fund their tremendous growth opportunities. Those are exactly the kinds of companies that Motley Fool Rule Breakers is looking for. You can take a 30-day free trial if you're interested, too. Omrix is a Rule Breakers pick.
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