On a regular basis I run a scan of recent initial public offerings, attempting to see which freshly debuted names may be near technical buy points, as well as which are showing fundamental promise. In the current market, new buys are risky. Still, in maintaining an up-to-date watch list, I've found it's worthwhile to continue running my scans.
At the moment, much of the new-issue anticipation is aimed at online game company Zynga, which is expected to sell about 14% of the company next week. That translates to expectations of 100 million shares, priced between $8.50 and $10, in the initial offer.
When it comes to companies that began trading this year, LinkedIn (LNKD), Groupon (GRPN), Pandora Media (P) and Fusion-io (FIO) have been attention-grabbers, but some lesser-known stocks are showing better price action going into the final weeks of 2011.
Tesoro Logistics (TLLP), a master limited partnership spun off from Tesoro (TSO) in April, rallied to a new high Thursday despite the market selloff. The stock, which specializes in transportation and storage of oil-and-gas assets, has risen 43% since its April 20 debut at $21. Wall Street is eyeing earnings of $1.80 per share in 2012, up 82% from this year, so the fundamentals make this a stock to watch, as well.
Another price leader is Spirit Airlines (SAVE), which went public in May at $12. As of Friday, the stock was trading at around $15.76, a gain of 31% since the IPO. The stock has a relatively high beta, 1.2, and has shown some volatile intraweek trade throughout its history.
After pulling back from its all-time high of $17.48 last month, Spirit is currently hovering just at its 50-day line, a sign of institutional support. Analysts see the company coming in for a 2011 landing with earnings of $1.30 per share, up 145% vs. 2010. Spirit is expected to report its fourth quarter in late January.
Meanwhile, Golar LNG Partners (GMLP) rallied to a new high Friday, reaching $29.93 intraday. The limited partnership was spun off from natural-gas transporter Golar (GLNG) in April, going public at $23. Golar LNG Partners operates a small marine fleet that refuels tankers at sea.
Earnings declined this year, to $1.74 per share from 2010's income of $2.32. However, analysts see a rebound next year, with full-year EPS pegged at $1.99. Many investors have lauded the company's growing cash flow, as well. That's a metric growth investors often eye and, at the moment, it appears bullish.
Finally, another oil-and-gas-related name, SandRidge Mississippian Trust (SDT), has shown better-than-average price gains since going public earlier this year. This is a trust that owns interests in wells in Oklahoma. As with many other new companies in the energy sector, it was spun off from a parent company -- in this case, SandRidge Energy (SD).
Stock in the trust went public at $21 in April, and corrected sharply with the general market in the late summer and early autumn. It bottomed Oct. 4, along with the major indices, but ended that month with a 21% gain. Shares pulled back in November, finding support above their 10-week average, and have showed gains again this month. Friday, they were trading around $28.58 -- a gain of 36% since its IPO.
The fundamental expectations are high. Analysts see Texas-based SandRidge earning $2.58 per share in 2011, and $3.32 per share next year. Those would be year-over-year increases of 219% and 25%, respectively.
All four of these 2011 IPOs are small and thinly traded, which means investors may want to use extra caution. Sparse institutional ownership could result in a sharp selloff if one big investor exits a position.
However, this scan has been a good reminder that the widely held media darlings aren't the only stocks that can offer solid returns. As always, recent IPOs are worth some research. They can be some of the market's best price performers.