Oil And High-tech Offerings Are Still Hot

Last year's issues in these categories gained as much as 200%.

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High-tech and oil exploration have been the hot lines of business as new issue activity continues its march toward a new yearly dollar record. Investors are flocking to new offerings because their profit record in the aftermarket -- the price at which shares trade on their own after the selling group has successfully marketed the full allotment and is not providing bidside support -- has been enviable. (INC. is now including the initial public bid in its tables of new issues.) Just how enviable it is, especially considering the sheer speculativeness of the area, makes for dramatic reading.

Interpolating data compiled by the corporate finance specialists of Going Public: The IPO Reporter, who are tracking some of the major offerings of 1980, reveals that the 20 start-up ($400,000 or less in sales) oil and gas offerings on its list had averaged a gain of 200% through the end of May 1981. Interestingly, the highest-priced offering, Deca Energy at $7, advanced the least. The leading gainer was Centennial Petroleum, whose 650% increase resulted from a rise from 10? last November to 75? half a year later. There were no losses on the start-up oil and gas list.

Of the 16 high-tech start-ups chosen at random by Going Public for monitoring, three show an aftermarket loss. But the group in aggregate averages a profit from various dates in 1980 through May 1981 of 147% -- a gain boosted considerably by Enzo Biochem's 12-month leap of 1,150%.

While the aftermarket profits of start-ups are crackling, the 23 entries making up the more mature senior high-tech group (companies with net income of $1 million or more) pale in comparison. This glittering gathering managed an average gain of "only" 94%, topped by ISC Systems' 394%.

For what it's worth, price-earnings ratios of selected senior 1981 high-techs averaged a lofty 24.5, led by the 66.7 multiple of Tandon -- a February launch that has since soared in the aftermarket.

Surprisingly, the 22 stocks from miscellaneous industries mounted a 120% rise -- an outstanding performance considering the distinctly nonglamorous activities (the best gainer was Game-A-Tron at 524%) of many of the companies.

The conclusion for investors seems clear enough: Without question, no market sector has performed better in this period -- and probably for many months before -- than the common stocks of newly public corporations.

INITIAL PUBLIC OFFERINGS: MAY 1981

Note: This table may be divided, and additional information on a particular entry may appear on more than one screen.

Offering

Company Business/product Size Price

($000)

Dotronix Mfg. cathode ray tubes 2,000 2.00

Viratek Pharmaceuticals 3,990 7.00

Norpac Exploration Geological data 20,976 23.00

Data I/O Mfg. semicond'r instrs. 18,269 22.00

Wometco Cable TV TV systems 17,600 16.00

Heldor Industries Mfg. swimming pools 9,210 (a) 1,535.00

Inedco Educ'l movies 5,600 5.00

Muse Air Airline 38,500 (b) 17.50

Wilderness Mfg. camping equip. 1,500 (c) 3.00

Experience

Nelson Research Pharmaceuticals 8,512 8.00

Astro Drilling Oil and gas 5,375 10.75

Thoratech Dev. medical devices 5,938 9.50

Laboratories

Cable TV Industries Mfg. cable equip. 7,000 10.00

Input Business Mfg. optical computers 4,500 5.00

Machines

Mountain Medical Oxygen concentrators 9,000 9.00

Equipment

Novar Electronics Crime deterrents 4,400 12.50

Personal Diagnostics Mkt. medical devices 2,625 3.50

Advanced Mfg. integrated circuits 13,500 15.00

Semiconductor

IPL Systems Mfg. mid-range computers 20,020 13.00

Interferon Sciences Tests genetic eng. 10,000 10.00

Interpharm Labs Prod. interferon 7,188 6.25

Reading Aviation Airline 1,800 6.00

American States Equip. rental 2,000 (d) 2.00

Leasing

American Mfg. diagnostic kits 3,438 6.25

Diagnostics

Gibraltar Exploration Oil & gas 12,000 3.00(B)

Interaction Systems Mfg. computers 2,000 4.00

Balco Energy Oil & gas 9,500 9.50

Flight Dynamics Airline display systems 4,125 2.75

Skipper's Restaurants 4,541 10.25

Oil Mop Spill recovery supply 3,500 (e) 2.50

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