Investing in new companies is tricky - but that doesn't mean you
can't win. In the past week, two new companies have made remarkable
Molycorp Inc. (
, the producer of rare earth oxides, moved into the number one spot
on our IPO watch list after its stock jumped 19 percent last week.
Since August 20
, Molycorp is up 75 percent and the stock continues to
significantly outperform the S&P 500 and the other IPOs we are
Molycorp's "quiet period" came to an end two weeks ago meaning
that underwriters and analysts can now issue research reports,
earnings forecasts, and price targets for the company and its
They didn't waste much time getting to work. Last week Morgan
Stanley and JPMorgan initiated coverage on Molycorp with
ratings. Clearly analysts following the company expect the stock to
outperform the market - but I believe the entire industry is poised
There are few rare earth mining companies in the world outside
of China - yet demand for the minerals that go into products from
wind turbines to electric vehicles is soaring. Consider these
mining companies the clean energy equivalent of oil exploration and
drilling companies. If you think there's a future for clean energy,
by extension you think there is a future for rare earth mining
But outside of China, and a few operations in Canada, there
aren't very many of these operations out there. Molycorp, the sole
publicly traded U.S. based miner, is trying to make a go of it. So
far, the recently public company is garnering massive attention,
and the stock has been a high flyer since its debut.
Watch this company, and considering nibbling at shares on
pullbacks. But be careful, these high flyers can plummet back to
earth without warning - and many who got in on shares early may be
ready to lock in gains.
MakeMyTrip Limited (Nasdaq: MMYT)
was the other big winner last week as shares rallied 11.5 percent.
The stock is now up 67 percent since going public on August 12.
The travel industry continues to receive analyst attention as
Deutsche Bank AG (
initiated coverage on
Priceline.com (Nasdaq: PCLN)
with a buy rating and a price target to $350. The stock was trading
at $330.30 as of yesterday's close.
Deutsche Bank says the online travel industry will benefit from
convenience and customer experience, and will gain market share on
channels that they've already tapped into. Shares of MakeMyTrip
Limited hitched a ride and moved higher on the positive news.
***The chart below shows the returns of the best-performing IPOs
QLIK Technologies (Nasdaq: QLIK)
dropped from the number one spot last week, as its return since its
IPO date fell to 56 percent.
RealPage Inc. (Nasdaq: RP)
China Kanghui Holdings American (
held steady to round out the top 5.
Envestnet Inc. (
moved higher last week as Stifel Nicolaus, RBC Capital Markets,
UBS, and Barclays Capital initiated coverage on the firm. The
company received two buy ratings, an outperform rating, and an
equal weight rating, all of which helped move the stock 6.5 percent
RealD Inc. (
RealPage Inc. (Nasdaq: RP)
were two of the biggest losers last week, dropping 6.1 percent and
4.2 percent respectively. But I wouldn't take my eye off RealD for
too long - I think it's due for a turnaround in coming months.
RealD, a licensor of 3D technology, is teaming up with network
video processor RGB Networks in an effort to test 3D services over
RGB's current networks. This transition towards a 3D-viewing
experience, not only at the movies but at home as well, is at the
center of 3D technology in the future.
Steve Shannon, Executive Vice President of Consumer Electronics
at RealD, says,
"With 3D content moving to the television, our goal at RealD is
to provide technology to help deliver a premium 3D viewing
experience in the home similar to what viewers get in the
IMAX Corp. (Nasdaq: IMAX)
also announced its plans to have 67 screens operating in China by
2014. RealD should benefit, as the company taps into expanding
markets and offers its technology to other parts of the world.
***The only company scheduled to go public this week is
Legacy Healthcare Properties Trust
, which plans to list on the NYSE under ticker symbol
. The company was originally scheduled to raise $175 million by
offering 8.75 million shares at $20 per share back in August, but
the underwriter said a "difficult market" delayed the IPO.
Legacy is a real estate investment trust (REIT) and plans to own
six senior housing facilities. The company had $18 million in sales
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