We do not need to bother telling you that 2010 was a great year for stocks with a return of the economy for the 90% of you with jobs.  We probably don’t even need to bother need to tell you that it was a great year for initial public offerings.  What is interesting and what does need to be told about 2010 is how many IPOs saw legitimate exponential returns for investors even from real prices rather than just from the IPO prices that only went to a handful of favorite clients and institutions.  We have evaluated The IPO Class of 2010 and the theme has quite an Asian influence with it.

Molycorp Inc. (NYSE: MCP) took THE IPO OF 2010 award from us, but other hot post-IPO winners were BroadSoft Inc. (NASDAQ: BSFT), Camelot Information Systems Inc. (NYSE: CIS), Fabrinet (NYSE: FN), hiSoft Technology International Ltd. (NASDAQ: HSFT), JinkoSolar Holding Co., Ltd. (NYSE: JKS), MakeMyTrip Limited (NASDAQ: MMYT), Qlik Technologies, Inc. (NASDAQ: QLIK), Realpage Inc. (NASDAQ: RP), Vera Bradley, Inc. (NASDAQ: VRA), and Youku.com Inc. (NYSE: YOKU).

Molycorp Inc. (NYSE: MCP) wins THE IPO OF 2010 AWARD.  The U.S. rare earth elements speculative leader, has been on fire. Molycorp also deserves the “Being At The Right Place At The Right Time Award For 2010” if you ask us.  The company’s Mountain Pass operation is still not likely to generate any significant rare earth revenues until 2012 despite its partnerships and despite the woes of China’s rare earth quota situation.  The market cap is now over $4 billion and many feel there is a bubble forming here due to a lack of domestic product and the national security argument getting out of sight.  Still, math is math and it has performed better than all IPOs.  Molycorp traded as a busted IPO under its $14.00 IPO price before the market rally and the China issue came to pass.  The returns here… almost 300%!

The rest of the list is in alphabetical order…

BroadSoft Inc. (NASDAQ: BSFT), which software for telecom service providers to deliver voice and multimedia over IP-based networks, was a summer sleeper that exploded higher in November. BroadSoft sold 7.5 million shares at $9.00 per share in June and shares went as low as $7.34 when markets were soft in the summer. The closing bell price on December 30 was $24.08, giving the gains here close to 200% for 2010.

Camelot Information Systems Inc. (NYSE: CIS), which provides enterprise application services and financial industry IT services in China, is often considered an overlooked entrant in 2010.  It came public in the summer with a sale of about 13.3 million shares at $11.00 per share, at the low end of the expected range.  Its shares have traded in a range of $15.44 to $24.89 and the ADR closed at $23.88 on December 30.  With a market cap of $1.05 billion, it trades at just over 4-times expected 2011 revenues.

Fabrinet (NYSE: FN), an outsourced optical component manufacturer came public in the summer selling 8.5 million shares at a price of $10.00 per share.  It traded briefly as a busted deal with lows under $10.00 but it also traded as high as $22.74. The market cap is now $711 million.  Its $21.06 close of December 30 makes for legitimate gains here of more than 100%.  Valuations are still reasonable and it appears to trade for about 1-times (or so) our revenue expectations in the calendar year of 2011 despite a June fiscal year-end.

hiSoft Technology International Ltd. (NASDAQ: HSFT), the Chinese rather than Indian outsourced IT and R&D outfit, has been impressive.  Its IPO caught the end of the summer sell-off almost at the lowest point and sold 7.4 million shares at $10.00 per share.  Shares screamed higher in August and it has had a $25 to $30+ trading range for most of the last 3 months.  The market cap of $865 million implies about 4.7-times expected 2011 revenues.  The gains here represent right at 200% based on the $30.50 close on December 30.

JinkoSolar Holding Co., Ltd. (NYSE: JKS) has been a hot IPO that also saw an after-burner flame-out take hold of the Chinese solar player ADR.  It sold 5.8 million shares at $11.00 per share in May and it dipped under $10.00 on multiple occasions in the summer.  This went north of $40 briefly (300% gains) but has only been above $30 a few trading sessions. Shares closed at $20.43 on December 30, making the gains here still about 100% despite having pulled back by almost half.  Its market cap sits at $444 million.

MakeMyTrip Limited (NASDAQ: MMYT) is hard to tally as a top IPO currently despite what the math says from the IPO price.  It has almost been a bit forgotten about compared to its post-IPO hype.  The Indian travel destination provider has priced at $14.00 in August and its real lows were $20.75.  Shares went north of $40.00 and the December 30 close was $27.85.  That is a double from the IPO, but up “only 30% or so from the real post-IPO trading.”  The market cap is now $714 million and it remains one of the few new Indian investments for Americans.

Qlik Technologies, Inc. (NASDAQ: QLIK), with its software solutions for data analysis and reporting solutions, is one of the newcomers in business intelligence software. It sold some 11.2 million shares at $10.00 per share in the summer and its shares did trade as low as about $14.00 in August before peaking north of $29.00 this month.  The December 30 close of $25.91 gives this more than a double from the IPO price or about 85% if you had the insight to snag this after the IPO.  The market cap is now $2 billion, but it trades at close to 7.5-times expected 2011 revenues.

Realpage Inc. (NASDAQ: RP), with its multifamily property management software, came public in August and caught a major run-up in the market for an exponential gain.  RealPage sold 12.3 million shares at $11.00 per share in August before running to north of $30.00 in November and December.  Shares closed at $29.63 on December 30 and the run-up here has just been steady and consistent.  With near-200% gains, its market cap is $1.99 billion, which is just under 8-times expected revenues for 2011.

Vera Bradley, Inc. (NASDAQ: VRA), the ladies accessories brand, priced 11 million shares at $16.00 in October. Its post-IPO low is $22.00 and shares did rise steadily and they hit a high of $41.01 before settling down of late.  The December 30 close of $33.99 makes for gains of 50% from the opening day lows and makes for a double from the IPO price.  The market cap is now about $1.4 billion and it trades at close to 3.4-times next year’s projected revenues.

Youku.com Inc. (NYSE: YOKU) is often touted as “The Youtube of China” but its losses and a ‘reality check’ from the media brought this back to some sort of normalcy.  Its December 2010 IPO went off at $12.80 per share for 15.8 million shares.  The December 30 close of $35.03 made for close to 200% returns IF you got IPO shares and held.  Otherwise, the opening bell print on December 8 was $27.00 per share.  Be advised, shares hit $50.00 on just December 10 before that media ‘reality check.’  Being a “top IPO of 2010” has some caveats here, and it is hard to get excited about its $3.6 billion market cap before the quiet period is even up.

What we left off was the waves of reverse mergers which came out of China. That is a different story…

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JON C. OGG

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