On the upcoming IPO calendar in May 2013 are three companies representing how a sector's recovery can create new profit winners.
Typically investors don't trust any company in a distressed sector, even if that company's fundamentals are strong. This makes it extremely difficult for companies in that sector to raise capital, recover, and grow.
For several years now this has been the case with industries and companies tied to the residential real estate market.
Housing prices have been in a virtual free fall since late 2007. Very few analysts feel comfortable declaring a market bottom.
This has made it almost impossible - until recently - for homebuilders to raise additional capital through IPOs.
The weak market also disrupted banks and financial institutions that fund homebuilding and buying.
But things are finally changing.
Large institutional investors are becoming more comfortable with the housing market and we see that the IPO calendar has two banks and a homebuilder coming to the marketplace in the next week.
This could be very good news for IPO investors as the first deals in the space tend to be among the best performing as a sector recovers and comes back into favor on Wall Street. Those who are coming to the market first could be market leaders as the rally gains momentum.
More good news for investors is that the recovery in the housing and banking markets is just starting to take hold. As faith continues to build in these industries, we will see more IPOs of related companies.
IPO Performance of 2013: Check Out Winners and Losers
2013 has been a strong year for IPO performance so far.
About 40 deals have been priced through the second week of April, and 33 of the deals have moved higher in the secondary market with an average gain of more than 20%.
If you missed these profits, don't worry. There is no sign of any slowing in the IPO market, as there are currently nine deals already scheduled for the next two weeks. In fact, IPO dollar volumes for the year so far are nearing the $9 billion mark, on par with the levels seen in 2012.
Let's take a look at the biggest and best IPO performances so far in 2013.
IPO Calendar 2013 Heats Up With These Five New Offerings
After a slow start to April with just one deal scheduled for pricing, the IPO calendar is getting crowded again in the second week of the month.
The equity markets remain fairly strong and recent IPOs have performed very well so there is strong institutional demand for equities in general, and new offerings specifically.
As long as the market is propped up by an aggressive U.S. Federal Reserve policy, stock prices should stay firm and that makes for favorable conditions for new equity offerings.
Here are five to keep on your radar.
IPO Calendar 2013: Don't Miss GARS, PF
Although some of the highly anticipated deals like Taylor Morrison Homes and Sea World now look like they may be off our IPO calendar until April, this year's offerings have generated huge interest so far.
It seems large institutional investors and hedge funds are hungry for a quality IPO product and Wall Street is rushing to meet the demand.
On Thursday we saw two pricings that immediately went to premiums in early trading. Enanta Pharmaceuticals Inc. (Nasdaq: ENTA) was priced at $14 and traded as high as $16.94 immediately after markets opened. Real Estate Investment Trust Aviv REIT (NYSE: AVIV) priced its shares at $20 and moved as high as $22.98 in early first-day trading.
This is on the heel of very strong performance from other deals priced in the last month.
As the housing markets continue to show signs of recovery, wood products company Boise Cascade Co. (NYSE: BCC) has risen 59% since its Feb. 5 pricing. The same housing trends have helped shares of Tri Pointe Homes Inc. (NYSE: TPH) rise by more than 20% since its debut in late January.
Revenue management software provider Model N Inc. (NYSE: MODN) rose 35% in first-day trading earlier this month.
The final week of March will include two deals that are expected to price their initial offerings. Let's take a look.
IPO Calendar 2013: Seven More Companies Coming to Market
Seven companies are on our IPO calendar next week.
Traders and investors who track the IPO marketplace will be watching carefully to see if there is enough demand to meet the wave of capacity anticipated. Most suspect that the demand is more than strong enough and companies making their trading debut will be healthy performers.
Let's take a look at the upcoming IPOs investors should watch.
IPO Calendar 2013: Don't Miss SSNI, MODN
The IPO calendar for 2013 is starting to get more crowded as spring approaches.
The aftermarket for initial offerings has been especially strong as investors are rewarded for investing in new ventures and private equity cash outs.
Analysts expect the pace of offerings to continue to increase as the demand has been very strong and the equity markets are at or approaching new all-time highs.
There will be two deals pricing in the next couple weeks and several larger deals are expected by the end of the month, including the widely anticipated Sea World offering.
In the last few days there have been two deals added to the upcoming IPO calendar with specific pricing dates coming in the next couple weeks.
IPO Calendar 2013: Who to Watch in March
After a very quiet end to February, several high-profile deals should make the initial public offering (IPO) calendar for March 2013.
The year has gotten off to a great start with strong market performance by newly public companies. Overall there have been 20 IPOs so far this year and 17 are currently trading higher than the offering price.
One of the biggest has been Norwegian Cruise Line Holdings Ltd. (Nasdaq: NCLH) with a blistering gain of more than 50% in just a few weeks.
March will see a slow but interesting start with just two deals coming to market in the first week of the month.
2013 IPO Calendar: Who to Watch
After Facebook Inc. (Nasdaq: FB) went public last year with disastrous results, the IPO calendar emptied for more than a month.
But thanks to a string of successes toward the end of 2012, the IPO market is heating up for 2013.
In fact, companies that went public after Facebook's May 18 IPO were up an average 31% through mid-December from their IPO price, with the S&P 500 only up 11% in that time.
As we start 2013, the overall pessimism that engulfed the IPO market since Facebook went public has disappeared.
"To me, it feels like a meaningful shift in the market," said Tom Murphy, a partner and head of the securities-capital and markets group at law firm McDermott Will & Emery. "With those companies [that had great IPOs], all in very different industries, getting out at the top of their ranges, and above, is a really strong signal."
The IPO Rebound
The IPO market started rebounding in October, specifically during the week of Oct. 8- Oct. 12, when nine companies went public, the most since the end of March.
"There was a big hiccup with Facebook, but in general, new issues in the market are doing well," Jonathan Crane, chairman of KeyBanc Capital Markets' equity-underwriting committee told The Wall Street Journal. "People are gravitating toward anything with growth, and in that respect, I think things have returned to normal."
The best performing of those October debuts was Workday Inc. (NYSE: WDAY), a provider of cloud-based applications used to organize human resources, accounting and other employee-related activities.
Workday went public Oct. 12 and opened at $48.05, 72% higher than its $28 offer price. It was the largest venture-backed IPO since Facebook went public in May, raising $637 million in cash. WDAY stock currently trades at $50.
Workday's IPO is part of a successful trend in cloud-based companies going public.
"For now, the megatrends in the IPO market include cloud-based computing - which includes companies such as Workday, Demandware Inc. (NYSE: DWRE), Splunk, ServiceNow Inc. (NYSE: NOW), Guidewire Software Inc. (NYSE: GWRE) and Palo Alto Networks - and high-end branded goods such as Michael Kors Holding Ltd. (NYSE: KORS) and Prada that appeal to consumers in emerging markets," says Sam Hamadeh, chief executive of Privco, a financial dataprovider.
Who to Put on Your 2013 IPO Calendar
Based on the performance of the above companies, there are plenty of reasons to be excited for next year's IPOs.
"The positive returns helped revive global IPO activity at the end of 2012 and should support stronger issuance in 2013 from the large $200 billion global IPO pipeline," according to Renaissance Capital's year-end IPO report.
Here are some IPOs in 2013 to keep an eye out for:
Chinese IPOs Making Waves in the Market, but Beware of Bubbles
Record fundraising activity in the market for initial public offerings (IPOs) is pushing valuations for Chinese companies to sky-high levels, raising concerns about a possible bubble.
IPOs are likely to raise more than $300 billion for issuers worldwide in 2010, exceeding the previous record of $295 billion in 2007, despite the sluggish economic recovery in Western markets.
In the first 11 months of 2010, IPOs worldwide already raised $255.3 billion in 1,199 deals, according to a "Year-end Global IPO Update" report from Ernst & Young.
And the red-hot Asian markets, led by China, continued to lead the recovery, raising the most capital ever. Asian issuers have raised $164.5 billion so far this year - already surpassing the $98.2 billion raised in the peak fundraising year of 2006 and accounting for 64% of total global IPO value so far in 2010.
That's more than four times the $40 billion in IPOs completed by the second-ranked North American market. Europe was third, raising $32.8 billion, far outdistancing the Middle East and Africa's $5 billion.
Asia's Surging Economic Growth Pushes Global IPO Market to Record High That Will Continue in 2011
Despite market volatility and a shaky economic recovery, the global initial public offering (IPO) market for 2010 is on track to hit a record high – and 2011 is poised to continue the hot streak.
A study by accounting group Ernst & Young yesterday (Wednesday) showed that funds raised through global IPOs are expected to surpass $300 billion in 2010, topping the 2007 record of $295 billion. IPOs in the first 11 months of the year collected $255.3 billion in 1,199 deals.
"New IPO filings continue to increase around the world and a large backlog has built up as companies await greater macroeconomic stability," said Gregory Ericksen, Ernst & Young's global vice chair for strategic growth markets. "We expect the current IPO momentum to continue its upward trend in 2011."