The Three Most Popular IPOs of 2010

By Ryan Fuhrmann,

Shutterstock photo

After starting the year on a high note, economic worries and uncertainty over the current earnings season have caused volatility to return to the stock market. As a result, the market for initial public offerings (IPOs) remains tepid. And recent performance statistics place overall IPO returns in negative territory so far in 2010.

Despite the tough IPO market, there are still a number of stocks that have done quite well. Below is an overview of the most popular and best performing IPOs during the past year. Better yet, they still have plenty of room to run as the business cycle heats up and each firm has the ability to expand its market reach significantly after raising funds from their recent offerings.

Tesla Motors Inc (Nasdaq: TSLA)
Business: Auto Manufacturing
Trailing 12-month Revenue: $111.9 Million

Tesla's IPO was one of the more widely covered and popular IPOs of the year. The firm is still tiny by many measures, including revenue just over $100 million during the past year and a market capitalization of less than $2 billion, which places it in small-cap territory. The stock has done very well, returning more than +20% to investors that got in at the $17 offering price on June 28th, though it did dip below the IPO price in early July.

The company's electric vehicle, the Tesla Roadster, is the first capable of being driven on a highway. The Roadster's commercial appeal is somewhat unproven, given it is a sports car and was first introduced in 2008. A four-door sedan will be released in 2012, which should help the company stem the $55 million loss it posted during 2009. Despite the more murky financial outlook, the shares will continue to have appeal, especially to car enthusiasts and if gasoline prices return to the record highs of a couple of years ago.

Primerica, Inc. ( PRI )
Business: Financial Services
Trailing 12-month Revenue: $2.3 Billion

Primerica shares are among the best performing IPOs of the year and are ahead in excess of +50% from the offering price of $15 a share on March 31st. This is somewhat surprising given the company's financial services focus exposes it to sweeping regulatory reform. In fact, financial-related IPOs have been among the worst performers so far this year.

Primerica has appeal from a number of angles. Its debt consolidation services are countercyclical and the insurance and investment advice it provides to individuals are also steady performers in any economic climate. Also, despite the stock's run, the forward P/E multiple remains quite reasonable at less than 13.

Primerica also qualifies as a spinoff -- it was freed from Citigroup ( C ) in 2009 and was first acquired by billionaire financier Sanford Weill's Commercial Credit in 1988 as part of his strategy to build a global financial empire. Spinoffs have a solid performance track record as management teams refocus operations without distraction from a parent owner. As such, Primerica remains one of the most appealing bets of recently public companies.

TeleNav (Nasdaq: TNAV)
Business: GPS Software
Trailing 12- month Revenue: $155.9 Million

TeleNav shares are up about +14% from the $8 a share offering price on May 13th. The shares could have further room to run, as the forward P/E ratio is very reasonable at just over 10. The firm is growing rapidly as wireless firms are interested in offering their subscribers TeleNav's location based services, or LBS.

LBS helps mobile phone users find restaurants, movie theaters and just about any store close to their current location. TeleNav can also help with driving and walking directions and currently boasts more than 14 million subscribers, stemming primarily from lucrative deals with Sprint ( S ) and AT&T ( T ) that pay TeleNav a fee for each subscriber on their massive networks.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Taxes
Referenced Stocks: C , PRI , S , T

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