However, if you look over a list of IPOs submitted so far this year, chances are you’ll stare right in the face of a technology or health care stock. These two industries are the most likely candidates to produce new public companies this year, making up 19 of the 40 offering priced as of last month, according to the Wall Street Journal.

Tech and health care stocks aren’t just filling up the IPO lists, the share prices are also taking off in a big way. In fact, the average one-day return of the nine technology stocks to go public is approximately 14%, according to the Journal.

Now, don’t take this to mean that the tech glory days of the 1990s are back. We’ve argued before that the extreme valuations we experienced in the ’90s probably won’t return anytime soon. But this doesn’t mean tech stocks have no place in your portfolio.

Two companies that recently went public have been getting a little attention along with their tech & med brethren that have seen thrilling price climbs so far this year.

First up is GSI Technology (GSIT: NASDAQ):

After experiencing a small slump right after the intial offering, GSI has come back in a big way. The stock is now sitting about 12% higher than its IPO price — and this is only after a few weeks on the exchange.

California-based GSI develops SRAM (static random-access memory) devices used in telecom equipment. The military and medical markets also use GSI’s products.

While GSI may appear very speculative on the surface, it is actually a profitable company (pretty impressive this early in the game, holding on to a small $160 million market cap) with a reasonable multiple of 18.3 and a price/sales ratio of 3.7. GSI also has some big-name customers, such as Cisco and Nortel Networks Corp.

Next up is a medical device maker that’s lagging behind some of its IPO peers’ early gains this year: SenoRx (SENO: NASDAQ).

To go along with its tiny market cap of $140 million, SenoRx is not yet profitable. But it does have some promising products.

This company develops and manufactures devices to help diagnose and treat breast cancer. This includes devices for cancer biopsy, and tumor removal. And as I type, SenoRx is trading just slightly above its IPO price at about $8.20 a share.

Best,
Gunner
April 16, 2007

P.S.: If you’re looking for a good read this week, you might want to check out Kevin Kerr’s A Maniac Commodity Trader’s Guide to Making a Fortune. Get insider a true commodities expert’s head and learn how to pilot these confusing markets yourself. You’ll walk away with a lot of new info, and maybe wad of new cash as well.

Small-Cap IPOs was originally featured in the Penny Sleuth.