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Web Tools Help You Sift Out The Most Promising New Issues
 BY KEN SHREVE

INVESTOR'S BUSINESS DAILY

Posted 11/15/2006

What's not to like about the current market?

Breakouts have been sprouting up just about every day as the major
stock indexes continue to flash strong technicals. Even small-cap
stocks, declared dead around the same time the Dow started setting
all-time highs, have shown renewed strength. The small-cap S&P 600
staged a technical breakout on Tuesday in heavy volume.

Another positive sign for the market is the performance of recent new
issues, or IPOs.

It's an area of the market where investors can find firms with
innovative products and services and, in many cases, outstanding
earnings and sales growth.

A few tools at investors.com can help you keep tabs on the burgeoning
IPO market.

The subscriber-only Screen Of The Day (investors.com/screen), published
every afternoon at IBD's Web site, has a screen called Young Guns,
which lists recent new issues with a strong blend of fundamentals of
technicals. It's next scheduled to run Wednesday.

Boldfaced, italicized stocks in IBD's stock tables alert you to stocks
that went public within eight years with Earnings Per Share and
Relative Price Strength Ratings of 80 or higher.

You can use IBD eTables (investors.com/etables) to find these stocks in
one place. Use the Filter By: drop-down menu to access this preset
screen in eTables. Through Tuesday, 83 stocks made the cut.

Screen's Results

The accompanying table shows selected new issues that popped up in a
screen generated by the Daily Graphs Custom Screen Wizard
(investors.com/products).

Stocks were screened for an EPS and RS Rating of 70 or higher and grew
profit by at least 50% in their latest reported quarter. All firms went
public in 2005 or 2006.

Gmarket, (GMKT) a South Korea-based online marketplace, appeared in
Stocks On The Move last week when it cleared its first base since its
late-June IPO. Fundamentals are solid. Annual earnings are seen rising
290% in 2006 and 85% in 2007. In its latest quarter, profit soared
1,100% while sales jumped 149% to $43.7 million.

China-based Mindray Medical, (MR) a maker of medical devices, went
public in September. Earnings growth has accelerated for two straight
quarters, from 40% to 100% to 150%. Annual return on equity was a solid
67% in 2005. Return on equity is a measure that helps separate
well-managed companies from poorly managed ones. It means that Mindray
is generating 67 cents of profit for each $1 of shareholder equity.

Retailers have provided strong leadership during the recent rally. J.
Crew Group (JCG) went public in June at $20 and has been a steady
performer. The stock cleared a base in mid-September and shot higher
the past three days after finding support Nov. 2 at its 10-week moving
average. Sales growth accelerated for three straight quarters and
profit soared 257% in its latest quarter.

Profitless Wonders

Some strong-performing IPOs aren't profitable yet, but sales growth has
been in the triple digits in recent quarters. Riverbed Technology
(RVBD) is a good example. The emerging leader in the
Computer-Networking group has a market capitalization of nearly $2
billion.

It's among top price performers in a strong industry group, but lack of
earnings has held its Composite Rating to 56 and its Earnings Per Share
Rating to 20.

Here are a couple of things to keep in mind when it comes to IBD stock
ratings and IPOs. Don't automatically dismiss an IPO because of a
seemingly low EPS Rating. An IPO can have a few quarters of strong
quarterly earnings growth, but its EPS Rating might be weak because its
three-year EPS growth rate is nil.

Also keep in mind that buying rules for IPOs are a bit different when
it comes to base breakouts. Google (GOOG) cleared a three-week
consolidation in mid-September 2004 soon after its IPO. Mindray Medical
also cleared a three-week consolidation in late October.

Exchange operators have been hot, including IntercontinentalExchange,
(ICE) NYSE Group, (NYX) International Securities Exchange (ISE) and
Chicago Board of Trade. (BOT)

Another exchange operator, the New York Mercantile Exchange, will price
Thursday night and start trading Friday. It recently raised its
offering range to $54 to $57 a share from $48 to $52. It'll trade under
the symbol NMX.