![\"Timing](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/06\/190613_PC_clark.jpg\" "\\"Timing")
<\/a>When the stock market is going up, there are always initial public offerings (IPOs<\/a>). Timing, as they say, is everything.<\/p>\nBut with a meaningful trend (like the stock market breakout experienced this year), you can make good money speculating in IPOs, even if you can\u2019t get an allocation on the hottest deals.<\/p>\n
One small, but fast-growing company that\u2019s been a hot performer is SolarCity Corporation (SCTY) out of San Mateo, California. It\u2019s been one of the best-performing IPOs since listing. The company\u2019s timing could not have been more perfect.<\/p>\n
This business is more than just a solar panel company. It is a full service installer and repair service company<\/a> that guarantees electricity production to customers.<\/p>\n With net proceeds of approximately $95.0 million from the sale of approximately 13.2 million shares at $8.00 per share, this growing company is in full expansion mode.<\/p>\n It has also had fantastic stock market success so far, and it\u2019s worth keeping an eye on (especially since Elon Musk from Tesla Motors, Inc. [TSLA] is the company\u2019s chairman).<\/p>\n Before listing, the company raised over $100 million in private equity to fund its growth. The company has a burgeoning customer base among large corporations and the U.S. Armed Forces.<\/p>\n By May, $8.00 a share quickly became $50.00 a share, which isn\u2019t bad for six months\u2019 work. Extreme overvaluation is part of the game with IPOs, especially the ones that become immediately successful right after listing. (See \u201cHow Peter Lynch Got It Right 20 Years Ago<\/a>.\u201d)<\/p>\n Extreme price momentum with IPOs is very much a stock market reality when the key stock indices are ticking higher. The market bids the shares to astronomical levels in anticipation of the company delivering on growth. In a rising market, it definitely pays to research new IPOs.<\/p>\n SolarCity\u2019s stock chart is featured below:<\/p>\n Chart courtesy of www.StockCharts.com<\/i><\/p>\n In terms of its business model, SolarCity generates a considerable portion of its revenues through the leasing of its solar energy systems with power purchase agreements. What\u2019s great about leasing is that it requires long-term contracts (typically 20 years according to the company\u2019s form 10-Q) and provides a recurring revenue stream.<\/p>\n Before listing on the stock market, the company used to just sell its solar energy systems on an outright purchase basis. The company began offering leasing and power purchase agreements in mid-2008; this boosted the company\u2019s business considerably.<\/p>\n The majority of residential energy customers enter into leasing arrangements, while commercial and government customers enter into power purchase agreements. The company\u2019s total customer base grew 14% to 57,416 as of March 31, 2013, up from 50,532 on December 31, 2012.<\/p>\n In the three months ended March 31, 2013, SolarCity\u2019s total revenues were about $30.0 million, of which $15.1 million was due to operating leases. This compares to total revenues of $24.8 million, of which $8.14 million was operating leases, on December 31, 2012.<\/p>\n Without question, SolarCity\u2019s stock market valuation is off the charts and the company isn\u2019t even profitable. IPOs like this are as much about the concept as they are the business.<\/p>\n SolarCity is just the kind of company that can help revitalize the U.S. economy. The company is hiring, it\u2019s expanding across the U.S. market, and Wall Street loves the idea of it.<\/p>\n Stock market IPOs are typically overpriced, but that doesn\u2019t mean they can\u2019t make money. And SolarCity just might be the perfect example of this.<\/p>\n![\"SolarCity](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/06\/SolarCity-Corporation-Chart.jpg\" "\\"SolarCity")
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