Initial Public Offerings, or IPOs, were once the Holy Grail of prodigious profit potential for investors lucky enough to get in on the ground floor of the hottest new issues. Then the recession hit, and the IPO market dried up faster than a puddle of water in the Mojave Desert. All that has changed, however, as many high-profile new stock IPO plans are set for the next several months. Among the biggest IPO names are retailer Toys R Us, ratings agency Nielsen, options and commodities exchange CBOE, and perhaps the biggest IPO of all time, the Agriculture Bank of China.
Already this year, we’ve seen big success for many new IPOs. The biggest IPO success so far, based on share price appreciation, is insurance provider Primerica (PRI), which had an offer price of $15 when it began trading on March 31, but since has jumped to above $23.90 (as of June 2) for a gain of over 59.3%.
Then we had container company Graham Packaging (
GRM), which had an offer price of $10 on February 10, and has since climbed to $12.87 for a gain of 28.7%. Rounding out the top three IPOs of 2010 is financial services technology firm Financial Engines (FNGN), which had an offer price of $12 on March 15, and has since climbed to $15 for a nice gain of 25%.
It may seem counterintuitive that the IPO market is heating up while the equity market at large hasn’t had a very productive 2010. Yet after the dearth of IPOs in 2009, investors are ready and more than willing to soak up the best of these new issues.
Another reason IPOs are ready to breakout is that many firms are owned by private-equity firms, which largely sat on their hands from late 2008 until now just waiting to get some value out of their investments. These private-equity and buyout specialists are ready to unlock the value in the companies they own, and to pay down whatever debt they incurred in doing the initial deals.
The way things are shaping up, 2010 just might be the best year for IPOs in a very long time. That means that now is the time to cozy up to your broker and get yourself on the IPO allotment list of some of the biggest names.
The following is a list of some of the major companies that have filed IPOs, and that are likely to go public in 2010:
- Agriculture Bank of China
- Ameresco
- American Tire Distributors
- CBOE Holdings
- DriveTime Automotive
- General Motors
- HCA
- Kohlberg Kravis Roberts & Co
- MagnaChip Semiconductor
- Nielsen
- Oasis Petroleum
- Oxford Resource Partners
- Tesla Motors
- Toys “R” Us
- Zipcar
As of this writing, Jim Woods did not own a position in any of the stocks named here.
