Fresh market shares rally as US IPOs extend rebound
Monday, 8 November 2010
NEW YORK, Nov 7 (Bloomberg): Fresh Market Inc, the Greensboro, North Carolina-based grocery chain, posted this year's second- biggest first-day gain for an initial public offering (IPO) by a US company as the IPO market extended its rebound.
Fresh Market surged 46 per cent to $32.11 in Nasdaq Stock Market trading yesterday after selling 13.2 million shares for $22 each, $2 above the forecast price range, data compiled by a Securities and Exchange Commission filing show.
The offering was the largest of six US initial sales this week and the latest sign the market has recovered after 55 companies withdrew or postponed IPOs this year. Twenty-one companies completed deals in October, the most in almost three years, while the Standard & Poor's 500 Index climbed to a two-year high yesterday on optimism the economy has stabilised after the longest recession since the Great Depression.
"The sun's coming out for IPOs as investors have tended to take the possibility of a double-dip off the table," said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees about $55 billion.
"Anyone who buys an IPO has to have some hope and optimism, and we're starting to see investor attitudes reflect that."
Vera Bradley Inc, the Fort Wayne, Indiana-based maker of women's handbags, posted the biggest first-day gain for a US company that completed an IPO this year, climbing 55 per cent on Oct 21. China Cache International Holdings Ltd, the Beijing-based provider of Internet content to businesses, had the largest first-day rally on New York exchanges this year, surging 95 per cent on Oct 1, data show.
At the middle of the IPO's forecast price range, Fresh Market would have been valued at 16.4 times net assets, according to IPOdesktop.com in Marina del Rey, California.
That's almost six times higher than the ratio of 2.9 for Austin, Texas-based Whole Foods Market Inc, which Fresh Market identified as a competitor in its regulatory filing. Both grocery chains were valued at 25 times estimated earnings, according to IPOdesktop.com.
Fresh Market's profit increased 45 per cent to $41.1 million in the first nine months of the year, from $28.4 million in the year-earlier period, according to its SEC filing.
Fresh Market surged 46 per cent to $32.11 in Nasdaq Stock Market trading yesterday after selling 13.2 million shares for $22 each, $2 above the forecast price range, data compiled by a Securities and Exchange Commission filing show.
The offering was the largest of six US initial sales this week and the latest sign the market has recovered after 55 companies withdrew or postponed IPOs this year. Twenty-one companies completed deals in October, the most in almost three years, while the Standard & Poor's 500 Index climbed to a two-year high yesterday on optimism the economy has stabilised after the longest recession since the Great Depression.
"The sun's coming out for IPOs as investors have tended to take the possibility of a double-dip off the table," said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees about $55 billion.
"Anyone who buys an IPO has to have some hope and optimism, and we're starting to see investor attitudes reflect that."
Vera Bradley Inc, the Fort Wayne, Indiana-based maker of women's handbags, posted the biggest first-day gain for a US company that completed an IPO this year, climbing 55 per cent on Oct 21. China Cache International Holdings Ltd, the Beijing-based provider of Internet content to businesses, had the largest first-day rally on New York exchanges this year, surging 95 per cent on Oct 1, data show.
At the middle of the IPO's forecast price range, Fresh Market would have been valued at 16.4 times net assets, according to IPOdesktop.com in Marina del Rey, California.
That's almost six times higher than the ratio of 2.9 for Austin, Texas-based Whole Foods Market Inc, which Fresh Market identified as a competitor in its regulatory filing. Both grocery chains were valued at 25 times estimated earnings, according to IPOdesktop.com.
Fresh Market's profit increased 45 per cent to $41.1 million in the first nine months of the year, from $28.4 million in the year-earlier period, according to its SEC filing.