March 2015 IPO Track Record Recap

It was another lighter month in terms of quantity of IPOs that came to market as just 7 deals priced. To draw a comparison to last year, in March 2014 a total of 25 IPOs priced. There have been a total of 30 deals that have priced thus far in 2015 as compared to 61 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:

• January 2015
• February 2015

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 February 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. However, in March 2015, we did not give a ‘four’ rating. So far through 2015, we have given three deals a ‘four’ rating and the average return above the IPO price at first trade for ‘four’ rated deals is a staggering $18.09. In 2014, we rated 42 of 276 IPOs who debuted with a ‘four’ rating and these IPOs produced an average of $8.73 above the IPO price at first trade.

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 four deals debuted that we rated as a ‘three’ with an average rate of return of $1.30 above the offering price at first trade. The best of the bunch was Summit Materials (NYSE: SUM) which opened with a $2.16 premium above the IPO price ($18.00) and traded as high as $21.49. Other three rated deals this month were: National Commerce Corporation (Nasdaq: NCOM), Solaredge Technologies (Nasdaq: SEDG) & MaxPoint Interactive (NYSE: MXPT). For the first time this year, a three-rated deal missed our target as Max Point Interactive (NYSE: MXPT) opened below its IPO price and never traded above.  There have been 17 IPOs that IPOBoutique has rated as a ‘3’ this year with the average return above the offering price at first trade being $2.98. 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’. We gave three deals a ‘two-rating’ and two of the three opened below their respective offering prices. The average first trade came in $0.30 below the IPO price. SteadyMed (Nasdaq: STDY) and Goldman Sachs BDC (NYSE: GSBD) opened $0.44 and $0.50 below their IPO prices, respectively while Jernigan Capital (NYSE: JCAP) opened with just a $0.05 premium. So far in 2015, IPO Boutique has rated a total of 14 deals with a ‘two’ rating and those deals have returned an average of $0.21 below the offering price at first trade. In 2014, we rated a total of 62 of the 124 (50%) deals a ‘two’ and those either opened at or below their respective offering price. The average gain above the IPO price at first trade for the 124 deals in 2014 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 March, we did not give a ‘one’ rating.

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