Gogo Inc (GOGO), Tremor Video Inc (TRMR): A Few Recent IPO Misses May Offer Value, or Not

BrightRoll, an advertising company, recently provided the results of its agency survey. BrightRoll found that 75% of advertising agencies found video advertising more effective than traditional advertising. As a result, the online video advertising market is expected to grow 41% in 2013 to $4.1 billion. Tremor Video Inc (NYSE:TRMR) stands in a great position to capture these additional dollars as the company’s proprietary products allow advertisers to better plan their video advertising campaigns. I would consider taking a speculative position here as it seems the recent sell off may be overblown.

Pay attention

Lastly, Ply Gem Holdings Inc (NYSE:PGEM), a leading manufacturer of building products in North America. Within the holding company, there are two major operating segments: Siding, Fencing, and Stone, Windows, Doors, which comprised 59% and 41% of sales, respectively. Since the initial public offering in late May, shares have traded lower by 14% from the pricing set at $21.

Shares actually priced above the expected level amid strong demand for anything related to the housing sector. It makes sense, as the housing recovery continues, revenue should benefit from both new home construction and foreclosure repair. I would stay away for a little while as the company still hasn’t proved it can generate profits, even through acquisitions. Two recent acquisitions have exasperated this problem during the short-term as the net earnings from the acquisitions is negative at $3 million. Moreover, if interest rates continue to rise as many are expecting, secondary housing plays may see weakness as exuberance for the sector fades due to lower demand.

I would avoid Gogo Inc (NASDAQ:GOGO) and Ply Gem Holdings as the future of both these companies remains clouded with a number of unpredictable variables. Investors should consider Tremor Video Inc (NYSE:TRMR) as the company provides targeted exposure to the in-demand video advertising industry.

The article A Few Recent IPO Misses May Offer Value, or Not originally appeared on Fool.com and is written by Nathaniel Matherson.

Nathaniel Matherson has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Nathaniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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