So How Are Those Offline IPOs Doing? Part 2

Eric is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Following up on our previous post, we continue to take a look at recent IPOs in the offline space. After all, much of the investing world is familiar with recent market arrivals such as business networking site LinkedIn (NYSE: LNKD) and online radio purveyor Pandora (NYSE: P) both of which are essentially internet companies. But familiarity breeds, if not contempt, fewer opportunities to find an under-appreciated stock that could grow over time. LinkedIn’s shares, for example, are now more than double their IPO price even though the company hasn’t been consistently profitable. Meanwhile, the stock of the reliable loss-making Pandora has languished; it wobbles at around one-third below its IPO price of $16.

So do the offline classmates of these companies have better potential? Once in a while, yes. Spirit Airlines (NASDAQ: SAVE), for instance, has managed to be decently profitable over its latest quarters and fiscal years. This, despite the seemingly endless choppiness of the airline business, which is currently struggling with high fuel prices and is constantly under the threat of labor unrest. For investors, airlines are always a bumpy ride but this stock looks like it has some upside – forward P/E is barely above 10 and 73% EPS growth is anticipated over the next two years.

RPX Corporation (NASDAQ: RPXC) landed on the exchange in the midst of the white-hot market for patents. Tech companies are spending a lot on acquiring and suing over them these days; wags say it’s the only way to make predictable money in the industry. RPX allows its clients to be protected by its patent portfolio and offers advisory services. This is an interesting – and potentially high-margin – business, but numerous rivals big and small are crowding into the space. Still, RPXC’s margins are healthy and its bottom-line is anticipated to grow several times over the stock’s forward P/E of 20.8.

Tornier (NASDAQ: TRNX) is poised to take advantage of the graying of the world’s population. The biomedical supplier designs and makes products used in joint replacement and soft tissue repair. Because these types of surgeries are not uncommon for older patients, there’s a good market out there for the company. But despite this potential, at the moment Tornier seems to be a watch-and-see, as it hasn’t been profitable and isn’t anticipated to be until its next fiscal year at the earliest. Its growth potential might also be priced into the stock already – TRNX is up more than $5 from its IPO price of $19.

So that’ll do it for this exploration of recent offline IPOs. But we’ll continue to keep our eye on the market’s newbies, especially in light of the upcoming Facebook stock issuance. In the wake of that, it’s certain that we’ll see more companies come to market. Let’s hope they’re good ones.


Motley Fool newsletter services recommend LinkedIn. The Motley Fool owns shares of LinkedIn. Eric Volkman has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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