August 2015 Track Record Recap

The IPO market slowed down considerably in the month of August as just eight deals debuted. In August 2014 a total of 14 IPOs debuted. Thus far in 2015, a total of 117 IPOs have priced as compared to 178 that priced at the same point a year ago.

This post will allow us to post our results and emphasize the value of IPOBoutique’s senior managing partner Scott Sweet’s ratings. You can check out our entire track record at this link.

Here is a recap of our past performances:

Five-Rating

We consider these IPOs to be the best of the best. In our nine years of keeping a track-record we have given just 14 ‘five-ratings’ and all 14 have hit their respective targets. However, in August 2015, we did not give a ‘five’ rating.

Four-Rating

We consider these IPOs to be very strong buys and we anticipate 1-to-2 points of premium above the offering price at first trade. In August 2015, we dished out one, ‘four-rating’– Amplify Snack Brands (NYSE: BETR). ‘BETR’ severely underperformed as it opened $1.00 below the offering price. In August 2015, the average return of ‘four-rated’ deals at first trade was $1.00 below the IPO price. To this point in 2015 we have rated a total of 28 deals with a ‘four-rating’ and the average opening above the offering price is $8.35. In 2014, we rated 42 IPOs with a ‘four’ rating and these deals produced an average of $8.73 above the IPO price at first trade.

Three-Rating

We consider these IPOs to be moderate buys and we anticipate 1/2 to 1 point premium or more likely in the cases of these new issues. This past month four deals debuted that we rated as a ‘three’…with an average rate of return of $4.66 above the offering price at first trade. The number was largely skewed by the positive performance of Global Blood Therapeutics (Nasdaq: GBT) which opened $14.65 higher than its $20.00 price–a 73% gain at first trade. The other two biotech deals, Zynerba Pharmaceutical (Nasdaq: ZYNE) and Aimmune Therapeutics (Nasdaq: AIMT) hit their respective ratings at their opening trades. While Planet Fitness (NYSE: PLNT) failed to break its offering price upon its debut, ‘PLNT’ did subsequently achieve its rating as it traded as high as 15% above the offering price in its first calendar week. There have now been 49 IPOs that IPOBoutique has rated as a ‘3’ this year with the average return above the offering price at first trade being $2.60. In 2014, we rated 95 IPOs that came to market with a ‘three’ rating and the average gain above the IPO price at first trade was $1.95.

Two-Rating

We consider these IPOs to be “neutral” and thus do not have a particular point threshold to hit in order for us to deem it as ‘hitting its target’. We gave six deals a ‘two-rating’ and two deals either opened flat or below the offering price. The average first trade came flat in respect to the offering price. So far in 2015, IPO Boutique has rated a total of 47 deals with a ‘two’ rating and those deals have returned an average of $0.037 above the offering price at first trade. In 2014, we rated a total of 124 deals a ‘two-rating’ and the average gain above the IPO price at first trade for the 124 deals was $0.36.

One-Rating

We advise our subscribers to avoid these IPOs as we consider them to be risky. In our nine years of keeping a track-record we have given just 49 ‘one’ ratings. In July, we did not give a ‘one’ rating.

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August 2015 Track Record Recap