Forget SuperGroup and Ocado. This recent flotation has fared much better.
As the old stock market saying goes: IPO stands for "It's Probably Overpriced". Although Facebook (NASDAQ: FB.US) is perhaps the current poster child for this remark, closer to home, the IPO class of 2010 contained quite a few pertinent examples.
SuperGroup (LSE: SGP) is perhaps the best known of the bunch. Floated at £5, it rose as high as £18 before plunging to as low as 250p. Now it's right back where it started, having licked its wounds and reflected on how it needs to adapt as a listed company.
Ocado (LSE: OCDO), the online grocer, is another company mentioned in the same breath. It joined the market at 180p, but currently trades at a third of that price as it continues to struggle towards profitability.
And then there was Betfair (LSE: BET). Starting off at £13, the company looked as if it would reinvent the world of gambling, but it soon went into reverse and is currently down around £7. However, the interactive whiteboard maker Promethean World (LSE: PRW) has had the toughest time. Cuts to education budgets have seen it slip all the way from £2 to just 25p.
Another company that joined the market in 2010 was the healthcare IT firm, EMIS (LSE: EMIS). It was founded in 1987 and sells software and related services to GP practices. It's reckoned that around half the surgeries in the UK uses its systems, where it looks after patient records for around 40m Brits.
The company slipped under the radar somewhat back in 2010, although I distinctly remember Maynard Paton remarking in the Fool office back then as to how it looked to be the best of the bunch. Not that, you could argue, it was up against particularly stiff competition.
Today's results showed another impressive performance. Sales are up 19% to £43m, with profits up by the same proportion to £12m. Like many software companies, this is a high margin business. It generates decent amounts of cash, too. £22m was produced in the last six months, giving the company a net cash position of £17m.
There's a 15% increase in the dividend payable as well. The shares are up 3% to 700p today, valuing the company at just over £400m. Based on full-year profit forecasts, that represents a somewhat heady price-to-earnings ratio of 22 times and a forward yield of 2%. But investors who hopped on board back in 2010, when the shares floated at 300p, probably won't be complaining.
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> Stuart does not own any of the shares listed above.
