July 2015 IPO Track Record Recap

The summer swell of IPOs hitting the market continued in July as 19 deals priced this past month. As many pundits like to make headlines of the number of new issues coming to market in 2015, there actually continues to be fewer deals debuting as compared to this time last year. In July 2014 a total of 28 IPOs debuted. Thus far in 2015, a total of 110 IPOs have priced as compared to 164 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 July 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 July 2015, we dished out a total of seven, ‘four-ratings’. Among the seven that debuted, four delivered double-digit premiums upon opening–Teladoc (NYSE: TDOC), Rapid7 (Nasdaq: RPD), ProNAi Therapeutics (Nasdaq: DNAI) & NantKwest (Nasdaq: NK). Other four rated deals this past month were Natera (Nasdaq: NTRA), Blue Buffalo Pet Products (Nasdaq: BUFF) and Ollie’s Bargain Outlet Holdings (Nasdaq: OLLI) with all producing at least $4.00 of premium or higher. In July 2015, the average return of ‘four-rated’ deals at first trade was $9.02 above the IPO price. To this point in 2015 we have rated a total of 27 deals with a ‘four-rating’ and the average opening above the offering price is $8.66. 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. Additionally, this month marks the 25th consecutive month of ‘four-rated’ deals hitting its designated mark of, at minimum, a one-point premium above the offering price.

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 6 deals debuted that we rated as a ‘three’…with an average rate of return of $1.95 above the offering price at first trade. The best of the bunch was Chiasma (Nasdaq: CHMA) which opened $4.50 above the $16.00 offering price. ConforMIS (Nasdaq: CFMS) and Neos Therapeutics (Nasdaq: NEOS) had gains of $3.00 and $3.22, respectively. Five of our six ‘3’ rated deals hit their designated target of at least a $0.50 premium above the offering price. There have now been 46 IPOs that IPOBoutique has rated as a ‘3’ this year with the average return above the offering price at first trade being $2.36. 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 three of the six deals either opened flat or below the offering price. The average first trade came $0.50 above the offering price. So far in 2015, IPO Boutique has rated a total of 44 deals with a ‘two’ rating and those deals have returned an average of $0.04 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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July 2015 IPO Track Record Recap