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A robust year for Canadian initial public offerings was, on balance, a mixed one for the Canadians who invested in them.

PricewaterhouseCoopers, in its annual survey of IPO activity, reports 38 Canadian IPOs, across all exchanges big and small, hit $5.1-billion in 2017, a five-year record. It's quite the contrast from 2016, where eight issues raised just $464-million.

"It was a breakout year," says Dean Braunsteiner, PwC national IPO leader. "We had an inkling of that as we wrapped up 2016, the worst year of the last 20. The equity markets had started to improve quite a bit in the fourth quarter after the U.S. election, and what we've seen in the past is the IPO market kind of lags. If there's a sustained recovery in the equity markets, not long after that you start to see some interest in the IPO market, and that's what we saw in 2017."

Investors who bought in to the biggest issues, however, were just as likely to miss than hit. To get a sense of how the IPO stocks performed, Globe Investor focused on the 17 big issues from the Toronto Stock Exchange and examined whether they outperformed the broader market, as measured by the performance of the S&P/TSX composite over the period from their debut to the end of 2017. Bloomberg provided the data to make the exercise possible.

The answer: Eight of the 17 beat the index from their offer price, the price the shares were first sold to the public. And nine beat the market from their closing price on the first day of trading.

These figures – roughly half beating the market, half underperforming – suggest a normal distribution of returns. It's worth noting, however, that some market observers suggest that IPO investing is a sucker's game, since the ordinary retail investor often can't get in on the offer price, and if an investor tries to buy an IPO stock after what is often a first-day bounce, there's little chance they can succeed. To have half the issues outperform the market from their first-day closing price is actually a victory for those who say there are winners to be found in the IPO market.

The champion for 2017, on the basis of the return from its first-day closing price, is MedReleaf Corp., a Markham, Ont., cannabis company that actually dropped on its first day of trading but has nearly tripled since. MedReleaf would have been the champion even had the analysis been conducted on Christmas Day, but a remarkable 30-per-cent gain in the final three trading days of 2017, riding a wave of pot stock enthusiasm, cemented its place as the top-performing IPO of the year. It's up 124 per cent from its offer price and 187 per cent from its first closing price, while the composite gained just 5.6 per cent since its June 7 debut.

Canada Goose, the second-best performer, illustrates that investors can still win when they chase a hot stock. The clothing company gained 26 per cent on its first day of trading, but is up anther 84 per cent since then, to nearly $40. (That gives Goose the best nominal return from its offer price, as the table accompanying this article shows.) It makes winners of not only the lucky folks who bought at the $17 offer price, but those who had no fear of paying more than $21 its first day. (Disclosure: I wrote a piece in March saying the stock was no bargain, so that column won't be in my 2017 highlight reel.)

Roots Corp., which stunned investors by falling 20 per cent in its first day of trading in October, has recovered nicely and has provided gains to those who bought in at the first closing price of $10. With the stock closing the year at $11.27, though, it's the big investors who are still underwater.

Two of the other flashier IPOs of the year, however, were unqualified losers, at least as 2017 came to a close. Restaurant company Freshii debuted at $11.50 and popped up to $12.22 on its first day, but ended the year at $7.34. (It could have been worse: When the company slashed its growth guidance in late September, the shares touched a low that was just half of its January IPO offer, making it seem pricii, retrospectivelii.)

Real Matters, the real estate tech company whose IPO was a matter of real anticipation, has struggled to regain its $13 offering price, and closed out the year down more than 20 per cent, while the composite gained 4.4 per cent over the period since Real Matters' May debut.

Canada's biggest IPO, by offering size, turned out to be one of its most neutral performers. Kinder Morgan Canada, which raised $1.75-billion in its May debut, finished the year at $17.01, versus its $17 offer price. Investors who bought in at $16.24, after its first-day dip, are up 4.7 per cent – but the composite is up 5.6 per cent over the same time period.

Canadian IPOs in 2017

Company Ticker2017 Return %
Canada Goose Holdings Inc.GOOS-T133.6
MedReleaf Corp.LEAF-T123.6
ERO Copper Corp.ERO-T59.6
Nexa Resources SANEXA-T53.2
Jamieson Wellness Inc.JWEL-T41.8
Fairfax Africa Holdings Corp.FAH.U-T41.6
Akumin Inc.AKU.U-T34.9
Stelco Holdings Inc.STLC-T34.6
STEP Energy Services Ltd.STEP-T2.6
Kinder Morgan Canada Ltd.KML-T0.1
Neo Performance Materials Inc.NEO-T-0.6
Roots Corp.ROOT-T-6.1
Titan Mining Corp.TI-T-12.9
Source Energy Services Ltd.SHLE-T-13.4
Real Matters Inc.REAL-T-22.5
Freshii Inc.FRII-T-36.2
Zymeworks Inc.ZYME-T-46.3

Source: Bloomberg

Returns are calculated from the initial offering price through Dec. 29, the final trading day of 2017.