Five Stocks, One Year After Their IPOs

The Good
Williams Pipeline Partners owns 35% of the Northwest Pipeline GP, a natural gas pipeline running from New Mexico all the way up to Washington State, and stopping at the Canadian border. The remaining 65% is owned by the Williams Companies (NYSE:WMB), which also owns a 2% general partner interest and a 45.7% limited partner interest in Williams Pipeline. Since going public, it has made six quarterly distributions with each subsequent distribution increasing in value. To date, it has paid out $1.82 per unit in distributions, and is currently yielding 7%. Another plus - natural gas prices generally don't affect its revenue stream. (Learn more in our IPO Tutuorial.)

RiskMetrics Group provides financial companies with products and services that help deal with risk. It hasn't been an easy year for anyone involved in financial services, although it appears the worst is over and companies are starting to generate stronger profits. This should benefit the company later in the year. This stock is in the "good" section for two reasons: first, its second-quarter revenues increased 1.9%, to $75.5 million, and its adjusted EBITDA was up by 14.3% to $27.1 million. Second, CEO Ethan Berman owns almost 12% of its stock. (Keeping tabs on company executives can provide clues about where a stock is headed, for emore read Delving Into Insider Investments.)

The Bad
American Water Works has been around since 1886, providing water services to Americans both at work and in the home. Since its IPO, its stock has lost 6.5% of its value. According to its 2008 annual report, despite over $2 billion in revenues each year, it hasn't made any money in the last four years. To make matters worse, it has negative free cash flow because of its significant annual capital expenditures. Some experts suggest we're headed for an explosion in the price of water, creating a "peak water" situation, much as the "peak oil" scenario talked about in the last few years.

The Ugly
Intrepid Potash's profits are crumbling fast, as farmers are losing their shirts. According to the Department of Agriculture, farmers' net income in 2009 will drop 38% from 2008, or $9 billion from the average annual net income over the last 10 years. It's no wonder then why 2009 full-year estimates three months ago were $1.93 a share and now sit at $1. These numbers are tenuous at best, and if they drop further, you know where its stock is heading.

Last on this list is GT Solar International, a provider of equipment to the solar power industry. It's had a brutal time since going public in July 2008, down 69% from its $16.50 pricing. What's happened to cause the drop? Its fourth-quarter earnings per share (EPS) for the period ending March 30, 2009 dropped 60%, from 20 cents to 12 cents. Upon hearing the news May 13, investors took its stock down 25% in one day's trading. Despite good second quarter results, revenues increased 25.7%, from $57.1 million to $71.8 million, and EPS jumped 66.7%, from 3 cents to 5 cents while stocks lingered in the $5 range.

The Bottom Line
GT Solar is the most promising of the bunch, solely on its growth potential and nothing more. If you did miss the initial jump of an IPO, you might want to revisit it one year later to evaluate the stock after the excitement.

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