Oil And High-tech Offerings Are Still Hot
Last year's issues in these categories gained as much as 200%.
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
Business Exchange Barter listings 1,950 3.00
Ultrasystems Engineering services 10,116 12.00
Unitel Video Videotaped products 3,200 8.00
U.S. Oil Oil & gas 2,019 5.00(B)
Plains Resources Oil & gas 7,000 3.50(B)
Republic Resources Oil & gas 8,000 2.00(B)
Seven Oaks Intern'l Coupon processing 9,350 8.50
Andros Analyzers Infrared gas analysis 1,575 4.50
Heizer Business development 7,000 17.50
L & N Housing Multifamily rentals 50,000 25.00
Company Business/product First Underwriter
aftermarket bid
Dotronix Mfg. cathode ray tubes 2 3/4 Engler & Budd
Viratek Pharmaceuticals 10 D. H. Blair
Norpac Exploration Geological data 23 Kidder, Peabody
Data I/O Mfg. semicond'r instrs. 28 Blyth; Hambrecht
Wometco Cable TV TV systems 16 1/4 Drexel; E. F. Hutton
Heldor Industries Mfg. swimming pools 1,525 Janney Montgomery
Scott
Inedco Educ'l movies NA Not underwritten (B)
Muse Air Airline 16 1/2 E. F. Hutton
Wilderness Mfg. camping equip. 3 1/8 Investors Financial
Experience
Nelson Research Pharmaceuticals 8 1/2 Merrill Lynch
Astro Drilling Oil and gas 10 3/4 Ladenburg, Thalmann
Thoratech Dev. medical devices 10 1/2 First Albany
Laboratories
Cable TV Industries Mfg. cable equip. 12 Bateman Eichler
Input Business Mfg. optical computers 5 Paulson Investment
Machines
Mountain Medical Oxygen concentrators 9 Bear Stearns
Equipment
Novar Electronics Crime deterrents 13 McDonald
Personal Diagnostics Mkt. medical devices 3 3/8 D. H. Blair
Advanced Mfg. integrated circuits 17 5/8 E. F. Hutton; Dean
Witter
Semiconductor
IPL Systems Mfg. mid-range computers 12 3/4 Rothschild; Smith
Barney
Inteferon Sciences Tests genetic eng. 9 3/8 Gilford Securities
Interpharm Labs Prod. interferon 6 3/4 Rooney, Pace
Reading Aviation Airline 6 1/2 Butcher & Singer
American States Equip. rental 2 1/8 First Affiliated
Leasing
American Mfg. diagnostic kits 6 1/4 Laidlaw Adams & Peck
Diagnostics
Gibraltar Exploration Oil & gas 3 3/8 Fitzgerald, DeArman
Interaction Systems Mfg. computers 8 1/4 Schaenen, Fellerman,
Peck
Balco Energy Oil & gas 9 1/2 Underwood; J. C.
Bradford
Flight Dynamics Airline display systems 2 7/8 Paulson
Skipper's Restaurants 11 1/2 Foster & Marshall
Oil Mop Spill recovery supply 4 J. E. Sheehan
Business Exchange Barter listings 3 1/8 M. S. Wien
Ultrasystems Engineering services 12 3/8 Seidler, Arnett
Unitel Video Videotaped products 8 Butcher & Singer
U.S. Oil Oil & gas 4 3/4 Mahler & Emerson
Plains Resources Oil & gas 3 1/2 Fitzgerald, DeArman
Republic Resources Oil & gas 2 3/8 Park Ave.; Fitzgerald
Seven Oaks Intern'l Coupon processing 8 Robinson-Humphrey
Andros Analyzers Infrared gas analysis 5 Birr, Wilson
Heizer Business development 14 5/8 First Boston;
Shearson
L & N Housing Multifamily rentals 22 1/4 Merrill Lynch;
Goldman
Sachs
a units of $1,000 cv debenture + 100 shares
b units of 2 common + 1 warrant
c units of 3 common + 2 warrants
d issued as $1,000 unit: 250 common + $500 cv debenture + 100 warrants
e units of 1 common + 2 warrants Data sources: New Issues, The Institute for Econometric Research Inc., 3471 N. Federal Highway, Ft. Lauderdale FL 33306; Going Public, 158 Walnut St., Philadelphia PA 19102.
Initial Public Offerings sold at $1 or less not included. First aftermarket bid is approximate.
NA not available
B Best efforts
