Uplisting Beats IPO Game

Although Hyatt Hotels(H Quote) traded up by over 10% following its IPO, Dole Foods(DOLE Quote), Rail America(RA Quote) and Shanda Games(GAME Quote) are all recent IPOs that are trading well below their IPO prices.

By contrast, recently uplisted stocks such as Puda Coal(PUDA Quote), China Agritech(CAGC Quote) and Rino International(RINO Quote) are still holding onto double-digit gains following their first-day listing pop. One stock that is providing all of the positive clues of an impending uplisting is Orient Paper(ORPN Quote).

Based on its current attractive valuations and uplist potential, ORPN could provide an IPO-like pop, with even more upside remaining for long-term holders. With a single-digit P/E ratio and plenty of cash, ORPN offers a lot of upside potential with minimal downside risk. (Note that due to its recent reverse split, many financial data sources will have an incorrect share count and thus an incorrect P/E ratio for ORPN. The current P/E is approximately seven).

A recent article on Bloomberg titled "IPOs Unravel as Aviv Shelves Share Sale Amid Record Low Returns" noted that:

"The U.S. company IPOs in the past two months have beaten the benchmark index for American equities by 0.5 percentage points in their first month of trading, the worst performance in Bloomberg data going back to 1995. Thirteen of 18 companies are trading below their initial sale price, Bloomberg data show."

Some IPO highlights are as follows:

Dole Foods(DOLE Quote) recently raised $446 million in its IPO and fell nearly 2% on its first day of trading. It is now trading at $11.63 vs. its IPO price of $12.50.

Shanda Games raised over $1 billion from its ADR IPO and is now down 15% from the offer price. Likewise, RailAmerica(RA Quote) is down by 20%. A summary of recent IPO underperformers is as follows:

Company (Symbol) Offer Date Offer Price Recent Close % Gain/ Omeros Corp (OMER) 10/7/09 $10.00 $6.51 -34.9 Cumberland Pharmaceuticals Inc (CPIX) 8/10/09 $17.00 $12.48 -26.59 ZST Digital Networks Inc (ZSTN) 10/20/09 $8.00 $5.97 -25.38 RailAmerica Inc (RA) 10/12/09 $15.00 $12.02 -19.87 Addus Homecare Corp (ADUS) 10/27/09 $10.00 $8.47 -15.3 Shanda Games Ltd (GAME) 9/24/09 $12.50 $10.69 -14.48 Vitacost.com Inc (VITC) 9/23/09 $12.00 $10.56 -12 Apollo Coml RE Fin Inc (ARI) 9/23/09 $20.00 $18.05 -9.75 Banco Santander Brasil (SABSBR) 10/6/09 $13.40 $12.24 -8.68 Artio Global Investors Inc (ART) 9/23/09 $26.00 $23.80 -8.46 AGA Medical Holdings Inc (AGAM) 10/20/09 $14.50 $13.35 -7.93