News that private equity giant The Blackstone Group (BX) plans to liquidate several portfolio holdings via the public markets has the market all abuzz. And for good reason: Initial public offerings (IPOs) are a sign of strength in the market, which is welcome news in the wake of the bear market.

But are flashy, high-profile IPOs necessarily a good bet for your portfolio?

I don't think so. Why buy the latest fad at its peak, only to watch your money burn? There's a better way to profit: Wait until the fad has run its course. When those who jumped in first abandon ship, buy it on the cheap as the company establishes its business, and watch it rocket higher as investors discover its value.

Double Your Money With This Failed IPO Stock

Heelys Inc. (HLYS) is the maker of wheeled footwear sold to youth around the globe. The hip product with its stealth wheel in the heel of its shoes allowed the user to seamlessly transition from running and walking to rolling by simply transitioning weight to the heel. Kids loved the concept, and so did investors. After the company went public in late 2006, shares traded as high as $40.

Unfortunately, the economy began slumping shortly thereafter, and this hip shoe was dumped unceremoniously. When the selling ended in March of this year, HLYS could be bought for close to a dollar per share. Talk about a bust.

At the current share price of around $2.30 per share, HLYS represents a great deal for speculative investors. The company has a strong balance sheet with no debt, and as of the end of June had $67 million in cash. Although the company is not close to the promise of its IPO, a fruitful business can still be had. Instead of buying the next fad, I'd buy HLYS as the company transitions from a fad to solid company with a loyal base of customers.

That's why I'm recommending old IPOs that are now terrific bargains.

What to Do Now

Buy HLYS up to $3.00 per share with a target of $10.