Considering an IPO? Dig deeper into the firm's fundamentals first

— -- Q: Is there a way for investors to find out if a company that's selling shares in an IPO is profitable or has revenue?

A:The initial public offering market is often the last to know about a market recovery.

Even as the stock and bond markets have rallied from their 2009 lows, giving investors hope the bear market is over, IPOs are still slow. Just 21 IPOs have been offered to the public this year, down from the 39 through August of 2008 and 154 through August of 2007, says Renaissance Capital.

But eventually, IPOs will come back. In fact, there were a number of deals completed in mid-August, indicating to some experts signs of a very early recovery.

Even if IPOs come back, that doesn't mean you should assume they are an easy way to make money. IPOs often have limited research and may have limited operating histories. You're wise to wonder how to dig deeper into the fundamentals of newly public companies.

To answer your question, yes, there are ways to find out some details about IPOs. Every company that decides to have an IPO must provide an in-depth statement, called a prospectus, to investors and regulators. This document provides a full description of the business and the risks and opportunity it faces. The prospectus also furnishes financial statements to investors, which answer the very questions you have.

You can download a company's prospectus, for free, from the web site of the U.S. Securities and Exchange Commission. From www.sec.gov, just scroll down a bit to where you see " Search for Company Filings" just to the right of the gray border on the left-hand side of the page.

Next, click on the first link, which reads "Company or fund name, ticker symbol, CIK…" Enter the IPO you're interested in, which as an example, I'll use Hyatt Hotels. When the filing comes up, click on the file/film number on the right hand side of the S-1 filing listing. Then click on the Documents button on the left side of the same S-1 filing listing.