It's been an excellent year for the initial public offerings (IPO) market, with the number of companies going public more than 47% ahead of last year's pace.
The surge in IPO activity has already assured that 2013 will be the best year for new issues since 2007, just before the financial crisis pummeled the markets. That year had 213 IPOs; so far in 2013 there have been 168 IPOs, according to Renaissance Capital.
The dramatic increase in IPOs has the thriving stock market to thank. The S&P 500 Index is up 20.4% year to date, while the Dow Jones Industrial Average is up nearly 17.1%.
"The increase in IPOs is entirely explained by the rising stock market," Jay Ritter, professor of finance at the University of Florida, told USA Today.
The 2013 IPO market has been more than prolific; it's been incredibly profitable.
According to IPOScoop.com, more than 70% of the IPOs of 2013 are trading above their offer price. The 10 best IPOs of 2013, in fact, are all up at least 140% over their offer price.
There were a lot of big first-day gains, too.
Sprouts Farmers Market Inc. (Nasdaq: SFM), which went public Aug. 1, popped 122.8%.
Fast-casual sandwich chain Potbelly Corp. (Nasdaq: PBPB), which had its IPO Oct. 4, shot up 119%. And Noodles & Co. (Nasdaq: NDLS) soared 102% on its first day of trading June 28.
And those gains are sticking. Both Sprouts and Noodles are well above even their first-day closing price, while Potbelly is still up about 80% over its offer price.
They join a growing list of several prominent IPOs from the past couple of years that have done extremely well. For instance, Michael Kors Holdings Ltd. (NYSE: KORS), which had its IPO in December 2011, is trading at over $73 - nearly quadruple its $20 offer price.
Given the unusually positive environment for IPOs this year, it's no surprise the 10 best IPOs of 2013 have done extremely well...
The 10 Best IPOs of 2013
To determine the 10 best IPOs of 2013, we simply looked at the year-to-date performance of each new offer of the year (rankings are based on Wednesday's closing prices). It's quite an impressive crop:
10. QIWI PLC (Nasdaq: QIWI): QIWI provides payment services to 65 million monthly customers in Russia as well as nations once part of the former Soviet Union. QIWI went public May 3 at an offer price of $17 and rose only 8 cents on its first day. Yet now QIWI trades at $40.95 - 140.88% higher than its IPO price.
9. Noodles & Co. (Nasdaq: NDLS): Noodles and Co. is part of the popular fast casual restaurant segment. It went public June 28 at $18 a share and soared 102% on its first day. NDLS currently trades at about $46.05, up 155.83% from its offer price.
8. Marketo Inc. (Nasdaq: MKTO): Marketo is a cloud-based marketing software platform, which puts it smack-dab in the heart of one of the hottest sectors in tech. MKTO went public May 17 with an offer price of $13 a share. It rose 64% on its first day, and currently trades at about $33.87, an increase of just over 160.54% from the offer price.
7. Sprouts Farmers Market (Nasdaq: SFM): This natural and organic food retailer is exploiting the growing obsession Americans have with healthy eating. SFM went public Aug. 1 with an offer price of $18 a share. As noted above, it popped 122.8% on its first day. Sprouts currently trades at about $47, up 161.11% from its IPO price.
6. Textura Corp. (NYSE: TXTR): Textura creates and sells business collaboration software to the commercial construction industry. TXTR went public June 7 at $15 a share and rose 39.6% its first day. The stock currently trades at $40.080, for an increase of 167.2%.
5. ChannelAdvisor Corp. (NYSE: ECOM): ChannelAdvisor provides web-based merchandise management software to businesses like retailers and manufacturers. ECOM (get it, e-commerce) went public May 23 at $14 a share and rose 31.7% on its first day. It currently trades at about $37.57, putting it up 168.36% over its offer price.
4. The ExOne Co. (Nasdaq: XONE): ExOne makes 3D printers and 3D printing products, and anyone who follows tech knows the enormous potential of 3D printing. The company went public February 7 at $18 a share and rose 47.3% on its first day. XONE currently trades at about $51.83, for a total gain of 187.94%.
3. Stemline Therapeutics Inc. (Nasdaq: STML): This biotech develops drugs that target cancer stem cells and tumors. Stemline went public January 29 at $10 a share and rose just 11.78% on its first day. But STML has climbed steadily since, and currently trades at $37.46, up 274.6% from its IPO price.
2. Insys Therapeutics Inc. (Nasdaq: INSY): Insys is a biotech seeking to capitalize on the growing interest in medical marijuana by using a generic form of THC to create drugs to treat cancer pain. INSY had its IPO May 2 with an offer price of $8 a share. The stock rose 19.75% on its first day of trading. But investors really warmed up to Insys later; it currently trades at about $37.54, a 369.25% increase over the offer price.
1. Aratana Therapeutics Inc. (Nasdaq: PETX): Aratana is a biotech that focuses on developing prescription medications for pets, a smart way to tap into the $20 billion annual worldwide animal health market. PETX went public June 27 at $6 a share and rose 37.6% on its first day. Aratana currently trades at $28.18 a share, for a list-topping increase of 369.67%.
While this group of stocks may be the best IPOs of 2013 in terms of returns, other new offers may be better additions to your portfolio. Don't miss this free report on the eight IPOs of 2013 that should be on every investor's radar...
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