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Quick Take: Industrial IPOs to Avoid

NEW YORK ( TheStreet) -- Initial public offerings have been hot and cold this year, but Francis Gaskins, research director for Equities.com, told TheStreet's Debra Borchardt what he expects from two upcoming public debuts.

The first company is Athlon Energy, in the drillling and exploration sector. The planned IPO is for an offering size of $300 million, with shares priced between $18 and $20 and is expected to trade under the ticker symbol "ATHL."

Gaskins said that he wants to avoid this one, with overvaluation his main concern. A similar company that recently went public was Jones Energy (JONE), which priced at the low end of its range and proceeded to trade lower once it was open to the public.

However, the problem is that Athlon is double the price of Jones, making Gaskins very leery going into the IPO. Adding to it is the 1.9 times net present value at which the company is valued, which is quite high.

Ardmore Shipping, which plans to trade under the ticker symbol "ASC," currently has shares priced between $15 to $17, with an expected offering size of $160 million. The company plans to use the proceeds for expansion.

Gaskins' problem is that Ardmore Shipping isn't profitable with eight ships, so how is expanding to 24 going to help? He added that while this international oil shipping play might pan out, there are plenty of other companies that are more mature, have better contracts, and more money. He is avoiding both IPOs.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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