NEW YORK ( Stockpickr) -- Simply taking a snapshot of 2011 doesn't tell you much. The S&P 500 began the year around 1250 and finished the year at 1250, yet it was actually wild year, with an early surge, a deep summer swoon and a fall rally.
For companies that chose to come public on such a roller-coaster year, timing is everything. Many 2011 IPOs firmly established themselves and are now trading well above their offering price. Yet many other companies were brought public at a time of high volatility, and they've never found their footing.
>>7 Hot Stocks on Traders' Radars
All of the stocks in the table below are trading at least 10% below their offering price, and a handful now look like solid bargains.
Here's a closer look at
several 2011 IPOs that look undervalued
Gevo, Solazyme and KiOR
These three companies --
(GEVO - Get Report)
-- are looking to accomplish the same goal: convert biomass, plants and other abundant natural materials into energy sources that can be used in placed of crude oil. These are always tricky IPOs because the companies are often several years away from scaling up production and will likely need to keep raising money until they become financially self-sustaining.
On the one hand, it's unwise to buy any company that will soon raise more funds from a secondary public offering, because your stake may be greatly diluted. On the other hand, these stocks, each of which is trading more than 25% below the 2011 IPO price, have built up a set of assets in terms of early and mid-stage production facilities, which may hold great appeal to other firms looking to buy their way into this space.
Perhaps the safest way to approach this group is to keep them on your watch list, and look to buy after another round of capital-raising has been completed. That may not be the last of the financing rounds, but at least you're getting involved in the stock a long time before that happens. On a cursory review, all three of these companies' technologies look quite appealing, performing well thus far in their development trials.