Three Steps To IPO Success In Any Market

Here’s my proven, three-step formula for sifting through the IPO hype to find sure-fire, long-term winners…

1. Profitability: Sounds obvious, but most companies that flop in the after-market lack earnings. Insist on at least two years of profitable operations.

2. Long-Term Growth Potential: The reason IPOs can be so darn profitable is because they represent the opportunity to invest in the infancy of a company’s growth cycle. Accordingly, stick to companies with a market potential that points to a decade or more of heady growth.

3. $50 Million Or More In Annual Revenues: Research out of the University of Florida confirms revenues are a good predictor of stock performance. The key threshold is $50 million for the 12 months prior to an IPO. Companies below that level underperformed the stock market by a margin of 15% for the next three years. Those above it outperformed.

One more thing: IPOs are just like any other investment. Ultimately, fundamentals win out in determining share prices. So after confirming the three characteristics above, take some time to dig into the underlying business. The stronger the fundamentals, the greater the profit potential.

road show ipo

Suggestion by 202.180.173.34 on 2009-06-25 10:30:46

road show ipo

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what is the criteria for an ipo? what does the company have to do to go...

Suggestion by 38.114.142.20 on 2008-11-09 01:48:56

what is the criteria for an ipo? what does the company have to do to go public?

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