The time period between the start of 2008 to the end of the first quarter in 2009 stands as a fresh reminder to investors of how bad things can get when underlying confidence gave way to market chaos. Yet despite the harsh economic environment, many large companies managed to launch their initial public offerings in an effort to raise additional capital. The following is a list of several companies that raised over $100 million in capital between Jan. 2008 to Mar. 2009 and where they stand today. The last price and market cap are effective as of 1/10/12.
|Name||$ Raised||Offer Price||Last Price||Mkt. Cap.|
|Visa (V)||$17.8 B||$44.00||$99.80||$68.6 B|
|Safe Bulkers (SB)||$190 M||$19.00||$6.62||$469 M|
|American Capital Agency Corp (AGNC)||$200 M||$20.00||$28.18||$6.3 B|
|American Water Works Co (AWK)||$1.2 B||$21.50||$31.39||$5.5 B|
|Colfax Corp (CFX)||$338 M||$18.00||$32.25||$1.4 B|
|Intrepid Potash (IPI)||$960 M||$32.00||$24.50||$1.8 B|
|Starwood Property Trust (STWD)||$675 M||$20.00||$18.92||$1.8 B|
|PennyMac Mortgage Investment Trust (PMT)||$320 M||$20.00||$17.29||$482 M|
|Mead Johnson Nutrition Co (MJN)||$720 M||$24.00||$71.83||$14.6 B|
|A123 Systems (AONE)||$380 M||$13.50||$2.13||$269 M|
One of the more distinct trends seen here appears to be the general flight to safety by the investing public. Visa, American Water Works, Colfax, and Mead Johnson Nutrition have all faired well since their Great Recession offerings. Visa is a leader in electronic payments technology foundational for credit and debit payments. American Water Works is a water utility and wastewater service provider. Colfax specializes in fluid handling products used in commercial marine and oil and gas infrastructure. Mead Johnson specializes in the manufacturing and distribution of infant formula and children's nutritional products. All four companies reside in stable industries, and retain market leading positions that remain difficult to tumble.
On the other hand, several of the IPO losers can be found in names such as Safe Bulkers, PennyMac, and A123 Systems. Safe Bulkers has suffered the decline of the drybulk shipping industry. PennyMac's main operations lie in residential mortgage creditworthiness. A123 Systems is trying to become profitable in the relatively nascent battery industry. These companies have continued to express risk and uncertainty, and consequently find themselves at a loss when measured in today's prices.
Yet despite their lowered performance, many of these losing companies continue to offer a relatively high dividend yield. Safe Bulkers, Starwood, and PennyMac offer yields of 9%, 9.4%, and 11.9% respectively. Though trading above its original IPO price, AGNC also can be seen to offer a whopping 19.9% dividend yield. Such high yields often suggest confidence on the part of management for the company to continue to pay out to patient shareholders.
Perhaps in part to advantageous capital raising as the macroeconomic picture collapsed around them, the IPO class of 2008-2009 can be seen as fairing quite well overall. As cash remains king, especially in rough economic times, many of these IPO's appear to have thrived in the midst of the Great Recession. In general, those that continue to lag their original offering prices often still appear to provide increasing value to shareholders through high distributions. Investors looking to supplement their portfolios with the aforementioned names might do well to perform additional due diligence in determining their suitability on an individual basis.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.