Don't look now but big paydays are here again in the tech-heavy Nasdaq.
From the depths of the 2009 bottom, the Nasdaq is up 139%, hitting levels it hasn't seen in more than 10 years.
In the last three months alone, the bellwether index is up nearly 19% — outpacing the 12% gain in the S&P 500.
But here's the thing: It's not all about Apple.
The high-tech IPO market is practically on fire. One of them is Jive Software (NASDAQ: JIVE).
Since Jive debuted last December, shares have jumped 25% from the offering price on the first day.
Since then, the stock has done nothing but power ahead. At the close of trading Thursday, Jive had nearly doubled in less than four months!
Hot High-Tech IPOs are a Major Market Trend
But that is just the beginning. Successful new issues like Jive reflect major trends reshaping markets.
Jive creates tools that help businesses run social networks, clearly an important way for many firms to reach new clients.
Jive is hardly alone. Several high-tech IPOs are showing excellent returns in the market's strong rally.
In fact, this actually is the best overall period for tech stocks since the "dotcom" crash 12 years ago.
Aside from Jive, several other IPOs have turned in double-digit gains in the last several months helping to lead the overall market higher – especially the Nasdaq.
Of course, the Nasdaq still needs another 40% surge to match pre-bubble values. But that's not the point.
Investors need to remember that every bull market contains leaders that have new products in new fields.
That is what always lands solid high-tech IPOs in the winner's circle.
The good news for investors is that they can expect to find more new issues in the weeks ahead.
PricewaterhouseCoopers LLP said in a recent report that 274 firms filed registrations in 2011, the largest number in several years. Of those, about 160 remain in the IPO pipeline.
Now don't get me wrong. I'm not suggesting you throw a dart at the IPO board. Far from it.
You still have to remain a disciplined, focused investor.
Just think if you'd tied up a lot of funds in BATS Global Markets. The tech-focused exchange had to withdraw its IPO last week because of a software glitch.
Of course, that kind of mistake isn't just stupid. It's inexcusable. But let's not focus on the negative.
There are just too many winners to look at.
5 Hot High-Tech IPOs
Take the case of GuidewireSoftware Inc. (NASDAQ: GWRE). So far it's at the head of the class for 2012 IPOs.
Guidewire has a very simple model. It sells software to the property and casualty insurance sector. Guideware boasts that its products can replace aging systems for some 80 clients who can tailor the software for their exact needs.
The firm priced more than 8.8 million shares at $13.00 in January. Since then, Guidewire has nearly doubled.
For its part, ExactTarget Inc. (NYSE: ET) hit the bull's eye too. Tech investors may recall that the interactive marketing firm with some 4,500 clients cancelled its IPO during 2009's market meltdown.
This time around, the stock caused a buying panic. Originally priced at $15 to $17, the stock had an offering price of $19 on March 22.
When it finally hit The Street, buyers pounced.
In the first half hour of trading, the stock hit $25, up 31%. After that, there was some back and forth, but the stock closed at $25.50.
On the other hand, Zynga Inc. (NASDAQ: ZNGA) reveals why I said you must remain a disciplined investor…
It is essential that you at least follow this basic rule: never put in an order to buy IPO shares at the market.
That can mean quick losses. Many shares will open strongly only to close below the offering price. That means you need to put in a sensible limit order.
And stick to it — even if that means letting the IPO slip away.
Instead, Zynga had a lousy debut. It opened on Dec. 16 at $11.00 a share. At the close of the first day's trading, Zynga had racked up losses of 13%.
Since then, however, shares have recovered. Zynga recently traded around $13, banking gains of 18%.
As recent IPOs go, that's hardly setting the world on fire. Compare Zynga to InvenSense (NASDAQ: INVN).
The maker of motion-sensing integrated circuits had its IPO last November with an offering price of $7.50. It opened that day at $8.60 and closed up about 7% for the day.
Since then, shares have gone on a tear, recently trading in the $21 range. That gives it an "official" gain of 200%. However, from the opening price, the stock has gained about 150%.
And then there's Ubiquiti Networks (NASDAQ: UBNT), which makes wireless networking products. It opened last October at $16.50 a share and closed up 6% for the day.
These are just a few of the stories helping to fuel the monster rally in the Nasdaq.
It's the beginning of a major trend that will reward patient investors for years to come.
The question today's investors face is how to find the next Guidewire of Ubiquiti so you can cash in on these big gains.
That's why I've created the Era of Radical Change, a unique advisory service that will show you how to profit from the most important trends reshaping the world around us.
I'm talking about:
- The sheet of flexible plastic that allows you to fold your e-reader screen like a newspaper.
- The small robot that can jump over walls to conduct surveillance for U.S. troops.
- The nanosatellite that can fly to the moon on a single drop of fuel.
- And much, much more…
So, if you want to find a way to profit from the next generation of tech breakthroughs, please join me at the Era of Radical Change.
It's free and it debuts soon. So stay tuned.
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top technology financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
Michael is 100% independent and receives absolutely no compensation from companies he writes about. His ideas are completely his own.
So, it probably goes without saying that you won't ever be left in the dark about breaking innovations, ahead-of-their-time technologies, and breakout companies on the cusp of changing the world once you join this world.