Companies that recently went public saw shares jump last week as
16 out of the 20 stocks we've been following since July all rose.
One company is now up 60 percent since mid-July and I've noticed
that one sector is a clear outperformer.
Our top performing stocks from last week continue to hold their
'top-5' designation, although there has been a changing of the
guard in the top slot. Last week
QLIK Technologies (Nasdaq: QLIK)
took over the best performer position, unseating
MakeMyTrip Limited (Nasdaq: MMYT)
as the online travel company saw its shares fall 5.5 percent. In
sharp contrast QLIK leapt ahead by 5.3 percent and is now up 60.1
percent since its first traded price on July 16
***According to Ipreo, a data and technology supplier,
technology companies have outperformed every other sector this
year. Tech IPOs have posted an average gain of 7.2 percent on their
first day of trading - compared to the 6 percent average gain from
all IPOs in the US.
With the tech sector outperforming thus far in 2010, I'm not
surprised to see QLIK Technologies return 60 percent over the last
two months. Tech comprised about half of all the newly public
companies that posted double-digit gains on their first day of
I don't expect that trend to end anytime soon. Mary Ann Deignan,
head of Equity Capital Markets for the Americas at
UBS AG (
agrees. She says,
"Market pundits believe tech will be one of the sectors that
will lead the market recovery because there's so much pent-up
demand for spending both on the personal and business side, and
when the economic spigot opens, tech companies will be the
dropped from the number one spot this past week, the company has
still returned 49.5 percent since going public.
Molycorp Inc. (
, a producer of rare earth oxides, has moved up the charts and is
now the third best returning IPO stock since July.
Molycorp was the top performer last week - its stock jumped 23.3
percent as its "quiet period" came to a close. During this quiet
period, usually 40 calendar days after a company goes public, the
underwriters and insiders are prohibited from issuing research
reports or earnings forecasts for the company.
Now that the quiet period has ended, I wouldn't be surprised if
analyst coverage picks up. I'll be looking for updated earnings
forecasts and revenue estimates, as well as an industry outlook to
help support this stock's momentum. The rare earth oxide industry
supplies materials for alternative energy producers, and with
interest in this segment picking up a domestic supplier such as
Molycorp garners quite a bit of investor attention.
Other winners from last week include
NXP Semiconductors (Nasdaq: NXPI)
Tesla Motors (Nasdaq: TSLA)
. Losers included
China Kanghui Holdings (
Smart Technologies (Nasdaq: SMT),
as well as the aforementioned
Smart Technologies Inc. (Nasdaq: SMT)
, which sells a popular interactive whiteboard, dropped 5.7 percent
last week - the third consecutive down week. The stock is now down
35 percent since its initial price offering.
But I wouldn't give up on this company just because its stock
has fallen since going public. For the three months ended June 30,
2010, revenues increased 38 percent. However, the company has
suffered (as have many) as fluctuations in foreign exchange rates
put a large dent in its net income. With a gross margin of 50.5
percent, I can see this stock bouncing back as currency
SouFun Holdings Limited
is the only company scheduled to go public in the next three weeks.
The company operates a real estate website in China and plans to
list on the NYSE under ticker symbol
SouFun Holdings expects to offer 2.9 million American Depository
Shares (ADSs) between $40.50 and $42.50 a share. American banks
issue ADSs, which are US-denominated, to allow investors to
purchase shares of foreign companies. At the mid-point of this
range, the company will raise just over $120 million dollars and
will have a market value of $893 million.
For the six months ended June 30, 2010, the company's revenue
increased 85 percent compared to the same time period in the
Telstra International, which has a 55 percent stake in SouFun,
plans to cash out in the IPO by selling 1.8 million ADSs to buyers.
Other shareholders are cashing out as well and plan to sell an
additional .86 million shares in the offering. I'm not going to say
this stock is certain to drop, but I'm always suspicious when
owners start cashing out.
As always, I encourage you to do your own homework on any IPO
you're considering. There are a ton of them out there and not every
single one is a good investment.
To help you learn more about the exciting arena of IPO
investing, I recently put together a free special report:
Do's and Don'ts of IPO Investing
for the PDF of this free special report.
If you've been active in IPO investing, let me know. My address