Speaking to InvestorDaily, Mr Batchelor compared the current 'hype' around cloud computing to the 'dot com' bubble of the early 2000s.
“There is often a lot of hype about IPOs which tends to over-inflate expectations,” he said. “You’ll get a situation like we had 12 years ago called the dot com bubble where the hype was causing stock valuations to go a lot higher than they really should have.
“Right now, you are seeing a little bit of resurgence in that trend but now the hype term is ‘the cloud’.
“Anything that has ‘cloud’ in the business plan, there is a risk there that it will be overhyped.”
The stock research application house has warned investors to remain cautious and stay focused on value when considering IPOs.
According to Skaffold, investors who believed the 2013 resurgence of IPOs would deliver them above-average returns for their portfolios have received a rude awakening.
“Although 2014 is shaping up to be another huge year for IPOs, investor appetite for them has been given an overdue reality check,” Mr Batchelor said.
“Our opinion is that most IPOs have been best left alone”, he said.
