March 2017 IPO Boutique Track Record Recap

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The IPO market was active in March as all ten deals that launched came to market and raised a total of $5.2bn.  This included the $3.4bn cash raise from Snap Inc. (NYSE: SNAP) which was the largest cash raise since Alibaba (NYSE: BABA) raised $21.8bn in September 2014.

Three deals priced above range and two priced below range in March. The average gain at first trade was 17.4% above the offering price with the month’s best deals being MuleSoft and Snap with gains of 42.6% and 41.2%, respectively, at first trade.

Compared to 2016, the IPO market is well-ahead of last year’s pace. There have been 24 deals that have come to market in 2017 versus six that came to market in this same period in 2016.

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 March 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 March 2017, we gave four ‘4’ ratings and the group (Snap Inc, Canada Goose, MuleSoft & Alteryx) averaged a 37.0% return above the offering price at first trade. All four hit their respective targets It should be noted that these were our first ‘4’ rated deals since October 2016.

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 return of 5.8% above the offering price. The best ‘3’ rated deal this month was Ardagh Group which opened $2.95 above its $19.00 offering price for a 15.5% gain at first trade. We have given eight IPOs in 2017 a ‘3’ rating and those have produced, on average, a premium of $1.36 above the offering price at first trade.

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 two deals a ‘two-rating’ this past month and these deals had an average return of $0.25 above the offering price at first trade. So far in 2017 we have given a total of eight IPOs a ‘2’ rating and those six have produced, on average, just a $0.14 return above the offering price at first trade.

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.

IPOBoutique.Com provides comprehensive research, ratings and daily advisories on new issues hitting the IPO market. To subscribe to IPOBoutique’s service: click here.