January 2017 IPO Track Record Recap

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The IPO market came to  life after the MLK day holiday as seven deals priced raising a total of $2.1bn. Two deals priced above range and 1 priced below range. The average gain at first trade was 6.3% above the offering price. The first technology deal of 2017 was cancelled as AppDynamics was purchased at a premium two-days prior to its debut by Cisco. One deal that was scheduled to price in January, Visterra Therapeutics, has not priced and is currently in day-to-day status.

Compared to 2016, the IPO market is well-ahead of pace. The first IPOs of 2016 did not come until February.

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 2017, 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.  In January 2017, we did not give a ‘four’ rating.

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 six deals debuted that we rated as a ‘three’ with an average return $1.85 above the offering price at first trade — or, in terms of percentage, 9.3%. The best deal of the month was REV Group (NYSE: REVG) which priced $1.00 above the range and opened with a $3.75 premium at first trade. The largest deal in January, JELD-WEN Holding (NYSE: JELD), who raised $575m, faired well as the high-end priced deal netted a premium of $2.25 at first trade. Other deals we rated as a ‘three’ were Keane Group (NYSE: FRAC), Jounce Therapeutics (Nasdaq: JNCE), AnaptysBio (Nasdaq: ANAB) and Jagged Peak Energy (NYSE: JAG).

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 one deal a ‘two-rating’, ObsEva (Nasdaq: OBSV), and that deal opened $1.71 below a mid-range pricing of $15.00.

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, we did not give a ‘one’ rating.

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