Start the conversation
A lot of people think the Facebook Inc. (NASDAQ: FB) fiasco means the market for IPOs is dead. Story over, right?
Well, not so fast.
Sure, the IPO market has slowed in the last couple of months, after thousands lost money on Facebook's poorly managed debut in mid-May. But the market remains far from dead.
Even in this kind of weak, choppy climate we see right now, innovation always comes to the top.
America is still brimming with lots of entrepreneurs who want to change the world around them. And help line the pockets of some savvy investors.
Winning IPOs keep the tech sector moving forward. That, in turn builds the base for the next round of startups with big ideas looking to go public someday.
And when you look at the most successful tech IPOs of 2012, you can see, these ideas are big.
Imagine a new system that cuts air pollution at a coal-fired plant while the flame is still burning – providing cleaner output for any type of fuel.
Or consider a platform that gives viewers the ability to watch any TV show they want, anytime, anywhere, on any device, from a laptop to a smart phone, all with one simple login.
And if you can take a known drug and tweak a little bit so it fights depression, well, that will be a godsend for millions of Americans.
I mention these cutting-edge breakthroughs because they represent the tech behind stocks that have gone public this year with big gains for investors.
By the way, I'm calculating the "best" returns based on one simple stat – how much the price has risen since the stock began trading through the market close on Wednesday.
Let's take a look…
The Top Five Tech IPOs of 2012
Synacor targets the big global trend toward cloud computing. That's a fancy way of saying that end users don't store content on their PCs or smart phones. Instead, the data, voice, or video lives in the "cloud," which loosely means the Internet.
With the flood of new devices and Web-streaming services for TV and movies, this is a model tailor-made for the digital era.
Let's say a cable TV client wants to watch The Big Bang Theory on a laptop on Monday, on a smart phone on Tuesday, and on a tablet on Wed. No sweat. Synacor has a service that allows people to do just that – and all with an easy setup. It also supplies a user-friendly home page that's simple to navigate.
Here's the thing. The firm gets nearly 86% of its sales from these start pages and display ads. And talk about high traffic… Synacor had 21.3 million unique visitors in this year's first quarter – visitors who made 271 million search queries. On average, people click on the ads some 2.8 billion times a month.
This is a boutique drug firm looking to create and sell products that treat central nervous system (CNS) disorders. As such, it is at work on a number of drugs in the fields of neurology and psychiatry.
Armed with 20 years of research, Supernus seeks to address unmet needs for:
- Attention-deficit hyperactivity disorder (ADHD)
In a sector known for high research costs, Supernus is taking a unique approach that keeps expenses down. It targets known drug compounds that have proven methods of getting results and then tweaks those to treat CNS problems.
So far, it's working.
In late June, the firm said it had received a tentative approval from the FDA for its Trokendi XR™ epilepsy drug. Though the firm still needs to address some marketing issues before the FDA will allow the drug to hit the market, it doesn't need to test the drug on any more patients.
Taking the firm public in late May was a risky move for the leaders at WageWorks. After all, their IPO could have gotten lost in all the hoopla over Facebook, which began selling shares to the public just a week later.
Not only that, all eyes in the healthcare sector were on the U.S. Supreme Court as it got ready to issue a ruling on ObamaCare. The high court struck down some parts of the law but upheld the key part that forces people to have health coverage or pay a tax.
But the market has certainly liked the IPO timing. WageWorks helps its clients manage health and other accounts for their workers – hence the name.
The Silicon Valley firm provides a cloud-based platform to manage tax-advantaged health programs and other perks. These on-demand service makes it easy for workers to manage their accounts from a Web browser. No wonder WageWorks has 5,000 clients that cover some two million people – it sells to 42% of the firms on the Fortune 100 list of the largest U.S. firms.
Not every piece of high-tech has to dazzle the average person as being "cutting edge" to rake in the cash. Just look at Guidewire. It's a firm that sells software to insurance firms.
Fact is, making software that's as simple as this is very tough to do. Think of it as putting a big V8 race engine under the hood of a ho-hum Ford Taurus.
Guidewire sees a big market for its products. Property and casualty insurers are in the early stages of swapping out clunky software systems that, in many cases, are decades old. So Guidewire meets their needs with a robust software suite that integrates details about policies, billing, and claims.
That laser-like focus explains why firms like Nationwide Insurance, CAN, and SafeAuto have joined Guidewire's client list. Despite years of red ink, the firm worked hard to cement its status as best of breed. It's racked up solid profits in each of the last two years.
Clearsign launched in 2008 as a green-energy play that offers a low-cost, cutting-edge way to reduce air pollution while also getting higher energy output.
A big market awaits. Experts say the pollution-control market totals more than $40 billion with a yearly compound growth rate of 6%. The U.S. has 163,000 gas-fired boilers, and China has 500,000 that burn coal.
Now you know why burning fossil fuels accounts for nearly two-thirds of the global energy produced. At the same time, energy producers face constant pressure to lower the amount of harmful matter that goes into the air.
No doubt, the science behind Clearsign's approach is complex. Simply stated, the system relies on a computer-driven high-voltage process to suppress pollutants at the flame source. That means it can provide cleaner output for any type of fuel. We're talking both coal and natural gas, which account for the bulk U.S. energy for homes and industry.
Though Clearsign made the top five IPO list, its stock has come under extreme pressure of late. It reached a high of $9.39 on May 7. The stock has rallied three times since then, but has yet to find solid footing.
As you can see, there's just no shortage of great ideas in the Era of Radical Change.
Six stocks are currently lined up to make their debuts as early as this week. Of those, two are in high tech and a third is a biotech issue.
So stay tuned. I'm going to keep telling you about hot new startups I believe will change the world – and successful IPOs that will make tech investors rich at the same time.
Related Articles and News:
- Money Morning:
There's More to the IPO Market Than Facebook (Nasdaq: FB)
- Money Morning:
How "Shock Therapy" Could Make Us All Smarter
- Money Morning:
Experimental Brain Injury Treatments Could Be Worth Billions
- Money Morning:
Why Ford (NYSE: F) Wants to Put Robot in Your Driver's Seat
- Money Morning:
These Teen Geniuses are on a Path to Change the World
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech 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.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.