I’m always a big fan of tracking the top IPO’s because it’s from this group every year that the next big winners will arise. When I ran SelfInvestors I built a database of IPO’s and ranked everyone by fundamentals and technicals to keep close tabs on the best opportunities. It was a lot of work but well worth it. Since I’m not actively running an advisory service anymore, I don’t keep it up to date, but I do keep an eye on what’s coming to market. It’s always interesting to see which companies and industries will lead the market in the coming years. Unfortunately, the free data that’s available quite frankly.. sucks! The best I have found after searching high and low is the IPO data from Edgar Online.
I took a look at the nearly 150 IPO’s that came to market in 2012 and by my count there were 22 that increased 50% since the offer date. I thought I’d take a look at the top 20 by performance, provide a brief description, then discuss a few that are setting up into a good trade along with a chart for those. Hope you find it valuable!
1. Guidewire Software (GWRE): this is the top performer so far in 2012, up 135% from the offer date. The company offers insurance software which provides operations in underwriting, policy administration, claims and billing. Its customers include GEICO, Genworth Insurance and many smaller insurance companies. The company is profitable and continues to grow, but that profits have been under pressure a bit this year. The stock is currently in a big basing pattering after a meteoric rise immediately after going public. Get a free daily analysis of GWRE here!
2. HomeStreet (HMST): a close 2nd is HomeStreet which is up 134% so far this year, but let’s keep in mind it’s a bank. While bank stocks can do well, I prefer technology stocks when looking for that next home run. The company is now showing profits in 2012 after steep losses while it emerged from the financial melt down of 2008. Get a free daily analysis of HMST here!
3. Proto Labs (PRLB): next up is Proto Labs which is up 128% this year. The company uses CNC machines and injection molding to manufacture custom parts for customers. While manufacturing doesn’t typically get me excited as an investment, this is a company that is growing quickly and has streamlined the short run manufacturing process leveraging the power of the internet of uber smart software. Customers can upload their CAD rendering of a product and Proto Labs will not only provide a quote to produce it, but provide suggestions on how to make it better. This is a company that has been increasing revenues 50% over the past few years and became profitable last year. This is a solid, growing company that should be on your radar.
Get a free daily analysis of PRLB here!
4. NationStar Mortgage Holdings (NSM): as I mentioned above, I’m not real interested in financial stocks as IPO’s but this is one that had a tremendous run after breaking out last May as mortgage rates continued to drop. The company hit profitability last year and has seen a huge surge in revenues over the past few years since 2009. The chart looks mighty toppy to me and the stock should be avoided in my opinion. Get a free daily analysis of NSM here!
5. Five Below (FIVE): if technology is my favorite sector for playing IPO’s, specialty retail might be 2nd. I still remember the high flying Crox days 🙂 Five Below is a specialty retailer that sells everything from candy, to stuffed animals to DVD’s to t-shirts aimed at the pre-teen and teen market. As you may have guessed everything is below $5. The company is growing quickly and turned its first profit last year. There are nearly 250 locations mostly on the East Coast. There is lots of room for West Coast growth which is probably why the stock has done so well. It’s actually setting up for a nice entry point here. I’m a big fan of high volume gap ups followed by orderly consolidation. That’s what we have here. A breakout from this consolidation here offers the entry point. Get a free daily analysis of FIVE here!
6. WageWorks (WAGE): with a surge of 109% since the offer date, WageWorks is up next. WageWorks administers and operates a broad array of CDBs, including spending account management programs such as health and dependent care Flexible Spending Accounts, or FSAs, Health Savings Accounts, or HSAs, Health Reimbursement Arrangements, or HRAs, and commuter benefits, such as transit and parking programs. This is a company that is steady, but isn’t providing the kind of big growth I like to see in a homerun IPO. I’d pass on this one for now. Get a free daily analysis of WAGE here!
7. Intercept Pharma (ICPT): in at the 7 spot is Intercept with a 102% surge since its offer date. The company isn’t profitable and is working on treatments for liver and metabolic diseases. I have to say I’m not a fan of early stage pharmaceutical/biotech stocks unless it’s for a very short term trade. The risk is too great in my opinion. I typically avoid them, but if you look at the chart it provided a picture perfect entry from a flat base on Nov 29th and is up 50% in just a few trading days since. If I were in, I’d take the money and run. Get a free daily analysis of ICPT here!
8. Annie’s (BNNY): at number 8 is organic, specialty food producer Annie’s with a 93% increase since the IPO date. The stock has the biggest opening since the LinkedIn IPO. Impressive stuff for a food company! The company sells its natural and organic pastas, pizzas, snacks and dressings in all major grocery stores. Growth has been steady and solid with the company ready to post its first profitable year. I like companies capitalizing on the trend towards healthier, organic meals at home and Annie’s is a solid one. No, the company won’t likely provide an explosive move in the coming years, but hey it’s up 100% so far and there may be room to run. The stock has been in a basing pattern since the big gap up on the first trading day and is currently looking to carve out a bottom after falling into a new base in recent months. Definitely a stock to keep an eye on.
Get a free daily analysis of BNNY here!
9. VIP Shop Holdings (VIPS): next up is VIP Shop with a 92% increase in the price of the stock since the offer date. The company is the largest discount retailer in China and uses a flash sale model to sell discounted items in a short period of time. There should be some caution with China ADR’s as there have been many in the past several years that have been crushed due to accounting issues and downright fraud. It should also be noted that this is a company seeing explosive revenue growth ($3 mill in ’09, $33 mill in ’10, $227 mill last year and will get close to a whopping $600 million this year. Despite the huge revenues, the company still isn’t profitable, but came close last quarter and could turn its first profit in Q4. That’s probably why the stock broke out from a long double bottom base on Sept 19th and hasn’t looked back. The stock has more than doubled since that breakout and is too extended at this time to get in. It needs a consolidation period. Get a free daily analysis of VIPS here!
10. Workday (WDAY): at 10 is Work Day with an 85% increase. Workday is an enterprise, web based software company offering solutions for a variety of industries including payroll, time tracking and employee expense management. While I really like fast growing software companies as IPO’s, I prefer that they be profitable for longer term holds. Since Workday isn’t profitable it may just offer a nice swing trade. Take a look at the setup here: Get a free daily analysis of WDAY here!
