Quick spurts of 50%, 75% or more aren't uncommon.
HiSoft Technologies (Nasdaq: HSFT)
has surged 200% since it happened to their stock.
is already up more than 155%... in a matter of less than nine
The best news?
There are plenty of companies out there that could have the same
thing happen to them in 2011. Names like Skype, Zillow, Twitter,
Toys 'R' Us and Facebook could all see the same sort of reaction if
they decide to take part.
Of course, I'm talking about the gains following an
initial public offering (IPO)
I think 2011 is going to be a bumper crop in IPOs. That will mean
hundreds of potential new opportunities for investors. And if they
are even half as successful as the new stocks like HiSoft and
JinkoSolar that we've welcomed in recent months, hang on.
Needless to say, companies would much rather go public when
investors are in an optimistic buying mood. And as the economic
crisis has abated, many companies are finding the public to be much
more receptive these days. So more and more are testing theIPO
According to research firm Hoovers, the number of initial public
offerings doubled from 30 in 2008 to 60 in 2009. And research
outlet IIR Group says we finished 2010 with a 120% increase inIPO
And that's just in the United States. In China alone there were 172
IPOs during the first half of 2010 that raked in $31 billion in
proceeds. Globally, the number of new offerings is on track to
One caveat: Just because a company goes public doesn't mean
itsshares are a sure bet.
Over-hyped IPOs that skyrocket intoovervalued territory right out
of the gate usually don't have a happy ending for the investors
that were late to the party.
So what's the solution if you don't want to get burned by an
overheatedIPO ? I've found a fund that could be just the thing.
First Trust USIPO (
exchange-traded fund (
that invests at least 90% of its assets in common stocks that make
up the IPOX-100 U.S.Index . Theindex includes the 100 largest,
best-performing U.S.IPOs in the IPOX Global CompositeIndex .
Theindex includesIPOs on their seventh trading day aftergoing
public and automatically rolls them off the list after 1,000
trading days. Theindex hosts a broad mix of globalIPOs , including
large, more mature companies like
, all the way to much talked-about growth companies like
Tesla (Nasdaq: TSLA)
The fund is a bit top heavy -- the three largest holdings make up
28% of the assets. That means even though the fund holds 100
companies, returns will be most impacted by the performance of a
handful of holdings.]
Action to Take-->
FPX was up 18% last year. WithIPOs in the U.S. slowly getting back
to pre-recession numbers, I expect the fund to see more interest
(and another great year) in 2011.
-- Nathan Slaughter
P.S. -- Time is running out to receive my Top 10 Stocks for 2011
report. Last year's list tripled the S&P, and one of this
year's ideas is already up 51% since the report went public. For
more details, be sure to read this memo.
Disclosure: Neither Nathan Slaughter nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.
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