So far, things have played out as we predicted in our report "When Will The IPO Market Return?" back in October: ongoing market volatility has led to a near-frozen IPO market, but the deals that get done tend to perform strongly thanks to solid fundamentals and discounted valuations. There are 29 companies that have filed up-to-date US prospectuses and we think there are many others intending to list in either the US or international markets waiting in the wings. While issuance will likely remain low in the near future, we believe that several of these prospective IPOs will be able to raise capital and generate significant returns for investors.

IPO issuance remained extremely low in the first quarter. In the US, it was the second consecutive quarter with only one IPO, and there was also only one non-US deal, down from five in the fourth quarter. The lone US IPO was pediatric nutrition company Mead Johnson (MJN), a large, highly profitable company with a leading brand in a defensive industry that was priced at a discount to its peer group on both earnings and cash flow. History has shown that slow IPO periods can lead to strong returns, thanks to higher-quality companies being priced at more attractive valuations, and we have seen Mead Johnson's stock trade up 15% since its February debut. (more)