This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Complete Genomics Could Soar

By David Sterman

NEW YORK (TheStreet) -- The IPO market continues to heat up with deals coming this week for GM, Booz Allen, Caesars Entertainment and a half dozen other firms. The flurry of deals puts us on track for the most robust quarter for initial public offerings in more than two years. Looking at the pipeline of new deal registrations, the first quarter of 2011 may be even hotter.

I recently looked at a strategy that uses analyst research to find stocks about to pop (Read The Secret Way to Play IPOs ).

Yet that's not the only way to look for upside among recent new deals. You can also scan lists for "broken IPOs," which are firms that have been public for a short while and are drifting lower while investors focus on more established companies.

Last month, I took a look at top-performing IPOs. As I wrote back then, "many new IPOs take time to find their sea legs and only take off well after their debuts. In fact, every single stock [mentioned in that piece] came out of the gate with a whimper and only started rising many weeks or months after their debut."

The stocks in the table below are all broken IPOs, each is trading off at least -15% from its IPO offering price. I've pored through the list and found the best rebound candidate.

Complete Genomics (GNOM)

Any company that struggles to fetch a desired IPO price is a conundrum for investors. On the one hand, a lower-than-expected price is a sign that investor demand just isn't there. On the other hand, you've got a chance to buy a stock at a cheaper price than investment bankers have recently assessed.

Case in point, Complete Genomics, which hoped to sell shares for $12 to $14, had to settle for a $9 offering price last Friday, and the stock is now down to $7. That's just half the high end of the expected range of pricing. The weak demand may be due to the fact that rival Pacific Biosciences (PACB) had just pulled off an IPO weeks earlier, snatching the attention of any fund managers that buy these kinds of companies.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,979.13 +59.54 0.35%
S&P 500 1,986.51 +4.91 0.25%
NASDAQ 4,526.4820 -1.0320 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs