Forget gold: Tech IPOs on the Move

If you're not a technology investor, you're missing out on some of the biggest gains - ever. And today, that trend continues. Technology stocks are leading the broad market. They're also leading the IPO market.

Of the companies that went public over the summer tech issues are among the big gainers, and last week alone the top three performing IPO stocks were tech companies.

QLIK Technologies QLIK, which makes business efficiency software, rallied 35 percent last week. The company was recently ranked first in customer loyalty in the world's largest survey of business intelligence users.

The stock not only outperformed the rest of the market recently but soared 112 percent since its IPO. To put this in perspective, the next best performing stock since going public this summer is MakeMyTrip Limited MMYT, which returned just under 76 percent.

Check out the two charts below which show the best-performing stocks since their IPO date as well as the top gainers last week (these include companies that went public since late June).

Smart Technologies SMT, the maker of the interactive whiteboard, posted the second largest gain last week, rallying 25 percent. In late August, Deutsche Bank DB initiated a "buy" rating for the company and RBC Capital Markets initiated an "outperform" rating.

Mike Abramsky of RBC called the company the "Apple AAPL of the Wall", given the company's potential to expand into international markets. Currently, SMART Technologies' interactive whiteboard reaches only seven percent of the global education market.

The stock is still down 22 percent since going public, but I expect this company's sales to edge higher as the economic recovery in the U.S. picks up and emerging markets put more emphasis on education.

MediaMind Technologies Inc. (Nasdaq: MDMD) was the third strongest company last week, climbing just over 21 percent. Stifel Nicolaus started coverage on the stock and initiated a "buy" rating. The company also announced that it will present at the 2010 Deutsche Bank Technology Conference where it could attract more attention from potential investors.

IntraLinks Holdings Inc. IL was also among the strong performers last week as the stock jump 20 percent. The company specializes in online document management security and serves over 4,300 customers. Its stock is up around 19 percent since going public in early August.

RealPage Inc. RP also posted a nice return of just under 16 percent. Yesterday, William Blair and RBC Capital Markets started coverage on the company and both initiated an "outperform" rating.

These companies have vastly outperformed the rest of the market - an indication that technology could emerge as a market leader entering the fall and winter of 2011. The 6 month chart below shows the performance of the Technology Select Sector SPDR Trust XLK over the last 6 months. Since August 31, the ETF is up 10.7 percent.

A recent survey of 130 CEOs from advisory firm KPMG indicates that the technology sector will lead the economic recovery. "The results are in line with recent earnings reports in the technology sector which suggests business conditions are starting to improve" said Gary Matuszak, a partner at KPMG.

What's more, eight out of ten executives see business within the technology sector improving in the remaining months of 2010, with 78 percent of executives seeing stronger than expected revenue.

***Three companies are scheduled to go public this week. Legacy Healthcare Properties Trust (LRP) delayed its IPO last month as one of the underwriters blamed a "difficult market". The real estate investment trust still has not gone public.

CoreSite Realty Corp (COR), another real estate investment trust, has 11 different facilities that serve over 600 customers. The company expects to raise $270 million by offering 16.9 million shares between $15 and $17 a share. The Denver-based company reported $29 million in sales last year.

SciQuest (SQI), which provides procurement software and services, will offer 6 million shares at a price range of $9.50 to $11.50 a share. The company will use just over 60 percent of the proceeds to redeem all preferred stock. It has customers in 16 countries and sees a potential market of $1 billion. With 79 percent margins, we will continue to follow this stock closely when it goes public.

As always, do your own homework before investing in any stock. If you have any questions about IPOs, please shoot me an email. My address is: editorial@smallcapinvestor.com.