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How these new IPO* movers performed last week once again proves how volatile shares can be after a stock debut - which means an unpredictable and unreliable source of profits.
ADOMANI Inc. (Nasdaq: ADOM) has been the quietest stock to move so much. While it tops the gainers last week, we were puzzled the week before when it fell 34.1% on no significant news. This is still a new stock that investors are struggling to value. It held its IPO in June. In spite of last week's surge, ADOM remains about $6 shy of its July high of $17.15. Named after the Italian phrase meaning "see you tomorrow," ADOMANI converts school buses and other transportation fleets into zero-emission electric and hybrid vehicles. Shares closed the week at $10.55.
Gridsum Holding Inc. (Nasdaq ADR: GSUM) was also quiet on the news front, but climbed steadily to close the week up 22.4%. The Chinese company, which provides data analysis software, has an earnings call coming up this week. Last week's excitement may be in anticipation of a strong report. However, Gridsum has yet to turn a profit and is not expected to have done so last quarter. GSUM closed the week at $8.61, well below its $13 IPO price from last September.
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Forterra Inc.'s (Nasdaq: FRTA) 46.5% drop came from an ugly earnings report. Earnings per share (EPS) were -$0.02, compared to an expected $0.08. It's the third straight quarter of negative EPS for Forterra. The Texas-based company manufactures pipe and precast products for infrastructure projects. In spite of the company's bad fortunes, Barclays Plc. restated its "Buy" rating on FRTA this week, with a $15 price target. Shares currently trade at $4.55.
Airgain Inc. (Nasdaq: AIRG) fell 27.1% despite beating EPS estimates by $0.04 in its Aug. 7 report. The San Diego-based communications company posted EPS of $0.10, still down 33% from a year earlier. The stock climbed as high as $26.95 late last year after an $8 IPO in August. It crashed in the following month though, and after another steep drop, it closed last week at just $9.50.
*Stocks are listed on a U.S. exchange with an initial public offering in the last year. Data and analytics provided by FactSet.
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About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.