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Published: August 2, 2010
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. (NYSE: 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 (NYSE: 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 (NYSE: S) and
AT&T (NYSE: T) that pay TeleNav a fee for each subscriber
on their massive networks.
-- Ryan Fuhrmann
Contributor
StreetAuthority |
