April 2015 IPO Track Record Recap

It was the busiest month in terms of quantity of IPOs that came to market as 15 deals priced. The 2015 IPO numbers continue to fall behind 2014 as in comparison to last year—in April 2014 a total of 27 IPOs priced. There have been a total of 45 deals that have priced thus far in 2015 as compared to 88 at this 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:

• January 2015
• February 2015
• March 2015

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 April 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 or higher in the first week of trading. premium above the offering price at first trade. In April 2015, we dished out a total of four, ‘four-ratings’. Both Etsy (Nasdaq: ETSY) and Aduro Biotech (Nasdaq: ADRO) opened with $15.00 premiums above their respective offering prices.  BluePrint Medicines Corporation (Nasdaq: BPMC) fared well upon opening with a $5.40 premium and Apigee Corporation (Nasdaq: APIC) opened $3.00 higher that its offering price. While four-rated deals have opened well, the overwhelming theme with all of these in-demand new issues is that they have sold off significantly since their debuts. In April 2015, the average return of our four-rated IPOs were $9.60. So far through 2015, we have given seven deals a ‘four’ rating and the average return above the IPO price at first trade for ‘four’ rated deals is a staggering $13.23. In 2014, we rated 42 of 276 IPOs who debuted with a ‘four’ rating and these IPOs 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 seven deals debuted that we rated as a ‘three’ with an average rate of return of $2.47 above the offering price at first trade. The best of the bunch was GoDaddy (NYSE: GDDY) who opened for trading $6.15 higher than the $20.00 offering price–good for more than a 30% return upon opening. Other three rated deals this month were: Kornit Digital (Nasdaq: KRNT), PartyCity HoldCo (NYSE: PRTY), Virtu Financial (Nasdaq: VIRT), Enviva Partners (NYSE: EVA), Carbylan Therapeutics (Nasdaq: CBYL) & Cidara Therapeutics (Nasdaq: CDTX). While not all of the IPOs did not open within our 3-rated ‘target’, all of the deals traded within the target in trading. There have now been 24 IPOs that IPOBoutique has rated as a ‘3’ this year with the average return above the offering price at first trade being $2.83. In 2014, we rated 95 of the 276 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 four deals a ‘two-rating’ and one of the four opened flat. The average first trade came $1.31 above the offering price. The numbers were dramatically effected by XBiotech (Nasdaq: XBIT), a WR Hambrecht deal, who’s deal opened $4.00 above the $19.00 offering price. While ‘XBIT’ hit an April high of $32.50 (71% above the offering price), this deal is now trading at or around the original offering price of $19.00. So far in 2015, IPO Boutique has rated a total of 18 deals with a ‘two’ rating and those deals have returned an average of $0.13 above the offering price at first trade. In 2014, we rated a total of 62 of the 124 (50%) deals a ‘two’ and those either opened at or below their respective offering price. The average gain above the IPO price at first trade for the 124 deals in 2014 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 April, we did not give a ‘one’ rating.

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