June 2015 IPO Track Record Recap

It was a second straight month with a strong number of IPOs that came to market as the month of June saw a total of 27 deals price–the most in a single month thus far in 2015. While that number is large and indeed caused angst among investors and media-talking-heads alike, it is not entirely strange to see a high quantity of deals debut in the month of June. In June 2014, 28 deals debuted and in June 2013, a total of 18 new public offerings hit the market.

The 2015 IPO numbers as a whole still pale in comparison to 2014. There have been a total of 91 deals that have priced thus far in 2015 as compared to 136 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:

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 June 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 June 2015, we dished out a total of eight, ‘four-ratings’. Three IPOs delivered double-digit premiums upon opening–Wingstop (Nasdaq: WING), FitBit (NYSE: FIT) & Glaukos Corporation (NYSE: GKOS). DAVIDsTea (Nasdaq: DTEA) and Fogo De Chao (Nasdaq: FOGO) debuted with first trades of $6.01 and $6.00 above the offering price, respectively. Other four rated deals this past month were TransUnion (NYSE: TRU), Evolent Health (NYSE: EVH) and Alarm.Com (Nasdaq: ALRM). In June 2015, the average return of our ‘four-rated’ deals was $6.27. To this point in 2015 we have rated a total of 20 deals with a ‘four-rating’ and the average opening above the offering price is $8.53. 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 24th 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 11 deals debuted that we rated as a ‘three’…with an average rate of return of $2.22 above the offering price at first trade. The best of the bunch was Seres Therapeutics (Nasdaq: MCRB) which opened $10.50 above the $18.00 offering price. Axovant Sciences (Nasdaq: AXON) also debuted nicely with a $5.93 premium above the $15.00 offering price. Nine of our eleven ‘3’ rated deals hit their designated target of at least a $0.50 premium above the offering price. Our rate of success in hitting our target for ‘3’ rated deals is at 88% for the 2015 calendar year. There have now been 40 IPOs that IPOBoutique has rated as a ‘3’ this year with the average return above the offering price at first trade being $2.42. 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 eight deals a ‘two-rating’ and four of the eight deals either opened flat or below the offering price. The average first trade came $0.06 above the offering price. So far in 2015, IPO Boutique has rated a total of 38 deals with a ‘two’ rating and those deals have returned an average of $0.03 below 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 June, we did not give a ‘one’ rating.

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June 2015 IPO Track Record Recap