IPO Boutique 2017 Track Record Recap

The IPO market is different than the quants, algorithms and high-frequency-trading that is prevalent in everyday trading. It’s much more old-school. Who is playing the IPO is just as important as the revenue growth the company states in its prospectus.It is certainly a niche type of investing, that if “played” well can be extremely rewarding.

IPO Boutique uses its over four decades of experience and contacts in the syndicate field to help even the playing field for every type of investor. Our client base consists of institutions, financial advisors and high wealth retail traders. Each of these investors have one goal in mind — finding winning IPOs and Secondary offerings to invest in.

Our rating system can act as a guide to how large of an indication you may elect to place for IPOs. Our research lays out the risk/reward for the short and long term and gives you the knowledge as to if you want to sell the IPO at the open or buy more as the IPO initially opens for trading. IPO Boutique is the tool to level the playing field. At the very least, our sources at all major underwriters will keep you in the know on the entire syndicate market.

After a final quarter of 2017 finished strong, it sets up for what we forecast to be a strong 2018 in terms of quantity of IPOs to come to market. In 2017, a total of 162 companies went public according to our records and, among those, 148 had cash raises of $25m or greater.

We wanted to use this post to recap our performance for the year and emphasize the value IPO Boutique has with our ratings. As a reminder, we use the opening trade and first week performance to judge ourselves. The performance scale we use remains a 1-5 scale:

5 – Strongest Buy

IPO Boutique did not rate any offerings a ‘5’ in 2017

4 – Strong Buy

IPO Boutique rated 21 deals with a ‘4’ rating this year with an average gain of 31.9% at first trade. These same 21 deals are now currently trading 40.1% above the IPO price on average. The best ‘4’ rated deals of the year at first trade were Cargurus (CARG), Floor & Decor Holdings (FND) and Qudian (QD) which opened with gains of 81.3%, 44.0% and 43.1% at first trade, respectively. The best performing ‘4’ rated deals as of January 3rd’s close were Canada Goose Holdings (GOOS), Floor and Decor Holdings (FND) and Alteryx (AYX) with gains of 158%, 119% and 92% versus the offering prices, respectively.

It should be noted that all 21 ‘4’ rated deals hit our respective target of 1 point of premium or higher in the first week.

3 – Moderate Buy

IPO Boutique rated 70 deals with a ‘3’ rating this year with an average gain of 8.6% at first trade. These same 70 deals are now trading 34.1% above the IPO price on average. The best ‘3’ rated deals of the year at first trade were Orthopediatrics (KIDS), Zai Lab Limited (ZLAB) and PetIQ Inc (PETQ) which opened with gains of 38.5%, 34.7% and 31.3% at first trade, respectively. The best performing ‘3’ rated deals from 2017 as of January 3rd, 2018 close were AnaptysBio (ANAB), Roku Inc (ROKU) and UroGen (URGN) with gains of 568%, 268% and 234% versus the offering prices, respectively.

2 – Neutral

IPO Boutique rated 58 deals with a ‘2’ rating this year with an average gain of 4.4% at first trade. These same 58 deals are now trading 18.1% above the offering price on average. Additionally, 16 of the 58 deals that we rated a ‘2’ opened below the offering price. We hope that the client base takes advantage of the color we are hearing and can size down accordingly when we are hearing a deal is not as strong versus when we rate an offering a ‘3’ or a ‘4’. Some of the worst performing ‘2’ rated deals this year were Funko Inc (FNKO), Allena Pharmaceuticals (ALNA) and ObsEva Inc (OBSV) with losses of 33.3%, 14.3% and 11.3% at first trade, respectively.

1 – Avoid, possibly risky

IPO Boutique did not rate any offerings a ‘1’ in 2017.

If interested in hearing about our premium service or to inquire about a trial — Contact Us Today

To subscribe to IPO Boutique’s premium service: click here.