Profit Update: Hyatt IPO

Brian Hicks

Updated November 9, 2009

Despite the naysayers that advised against buying Hyatt (H) on the IPO, we bucked the trend and gave you three ways to profit on August 11.

And each paid off well… very well.

As we said:

First, you can buy Hyatt out of the gate. It should trade under “H” by fall.

And second, you can buy its competitors like Marriott (MAR), Intercontinental Hotels Group (IHG), and Starwood (HOT) . . . not for the long term, though. You simply want to buy these names as we get closer to a possible Hyatt IPO.

And third, you can buy the U.S. IPOX-100 index, which includes the 100 largest, typically best-performing, and most liquid IPOs in the United States. It measures the average performance of U.S. IPOs during the first 1,000 trading days. We’ve already seen it race from $18 to $26 on the heels of MasterCard (stock ran from $43 to $200) and First Solar (stock ran from $24 to more than $220). We saw it run on Visa’s IPO (from $21 to $26) and we could see it run up again on a successful Hyatt offering.

Those that bought the Hyatt (H) IPO watched the stock soar more than $3 on day one.

Those that bought Marriott (MAR), Intercontinental Hotels (IHG) and Starwood (HOT) on the Monday ahead of the IPO and held until today would have seen the following gains.

  • MAR ran from about $24 to more than $26.50.

  • IHG ran from about $12 to more than $14.

  • HOT ran from about $28 to more than $32.

And had you bought call options on each, you stood to rake in some fat, impressive gains in less than a week.

As for the U.S. IPO-100 Index (FPX), which we used when Visa (V) went public, it ran from $18.50 to $19.10.

Besides using our technical indicators and thematic trading opportunities in Options Trading Pit, profiting from IPOs is yet another way to find profit opportunities in any market.

Congratulations on the quick and easy gains if you took the advice.

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