Amidst all the excitement over the $2 billion Och-Ziff Capital Management IPO filing, the good folks over at Renaissance Capital’s IPOhome.com, who track initial public offerings while managing the IPO Plus Fund (Symbol:IPOSX), have posted their first half 2007 analysis. Not surprisingly, the news is good:
“Despite predictions that the burdens of Sarbanes-Oxley would drive new issuers to London, warnings that IPOs were increasingly unprofitable and risky, and concerns that rising long-term interest rates would make equities unattractive, the IPO market has experienced its busiest six months in six years with reasonable returns. With media attention focused on private equity and the sub prime mortgage morass, the IPO market has been a steady Eddie, chugging along and raising billions for new issuers.”
The dollar volume of new stock issues was the most in six years at $26 billion in 115 deals. Market performance was modest, with IPOs gaining an average of just 13%. And measured from after the first trade, deals gained just 2%. It didn’t help that monster IPOs like Blackstone (BX) and Interactive Brokers (IBKR) fell flat. Just two deals, FCStone Group (FCSX) and JA Solar Holdings (JASO), have doubled in price. With initial public offerings arriving from a wide array of industries and countries and posting modest performance on average, there are no signs of a bubble forming in this part of the equity market.
Among deals discussed on Investing Insights this year, MetroPCS Communications (PCS) has done best, gaining 44%. Fortress Investment Group (FIG) is up 29% and Greenlight Capital Re (GLRE) is up 19%. Deals we trashed appear to have got what they deserved. Clearwire (CLWR) is down 2% and Blackstone, is down 6%. Of course, today’s IPO dud can be tomorrow’s value stock star.
Among a lengthy list of upcoming deals worth watching in the second half of 2007, Renaissance flags online travel seller Orbitz Worldwide (ORBZ ticker not yet available), rating agency Duff & Phelps (DF), derivatives exchange MF Global (MF), Yoga apparel maker ululemon athletica (LULU) and natural gas pipeline play OGE Enogex Partners LP (OGP) among others.