January 2015 IPO Track Record Recap

It was a lighter month in terms of quantity of IPOs that came to market in January. Just 13 deals came to market this month as compared to 17 deals that came to market in January 2014. But with what the new issues market lacked in number, it made up for it in quality with a pair of very, strong deals coming in the final week of the month.

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.

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 January 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 January 2015, we rated two IPOs with a ‘four’: Shake Shack (NYSE: SHAK) and Spark Therapeutics (Nasdaq: ONCE). Shake Shack opened $26.00 above the offering price and Spark Therapeutics opened $22.10 higher. That makes January’s average return above the IPO price for ‘four’ rated deals a staggering $24.05. In 2014, we rated 42 of 276 IPOs who debuted with a ‘four’ rating and these IPOs produced an average of $8.73

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 five deals debuted that we rated as a ‘three’ with an average rate of return of $3.81 above the offering price. All of our three-rated deals hit their respective targets. The best of the bunch was Box (NYSE: BOX) and InfraREIT (NYSE: HIFR) who produced returns of $6.20 and $4.10 above their offering prices at first trade, respectively. Other ‘three’-rated deals from January included Entellus Medical (Nasdaq: ENTL), Flex Pharma (Nasdaq: FLKS) and Ascendis Pharma A/S (Nasdaq: ASND). 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’. Six of the 13 deals from the month of January we gave two ratings with the average first trade above the offering price coming in at a paltry $0.11.  Two of the deals, Patriot National (NYSE: PN) and Presbia plc (Nasdaq: LENS), opened below their respective offering prices while Tracon Pharmaceuticals (Nasdaq: TCON) opened flat in comparison to its pricing. Other two rated deals from this month include Zosano Pharma (Nasdaq: ZSAN), County Bancorp (Nasdaq: ICBK) and Avinger (Nasdaq: AVGR). In 2014, we gave a ‘two’ rating to 124 deals this year. A total of 62 of the 124 (50%) deals we rated as a ‘two’ either opened at or below its respective offering price. 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 January or in all of 2014, we did not give a ‘one’ rating.

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