|
IPO outlook for this week
|
 |
June 30, 1997: 9:15 a.m. ET
Peritus Software Services is the latest in Year 2000 companies to go public
|
NEW YORK (CNNfn) - Despite an overall market pullback last week, June is turning out to be a winner for stocks as money-flows into stock funds remain strong. These are positive trends for initial public offerings as money managers look to invest in emerging high-tech companies with promising growth opportunities.
Such is the case with Qwest Communications, which went last public last Tuesday, and finished the week with a 30 percent gain. The profitless telecommunications company didn't attract investors on its solid financial track record, but rather on its ability to meet capacity constraints that the long-distance phone companies are facing.
Another problem that is more impending but is already spawning a whole new breed of companies is the year 2000 dilemma. This week, the latest company with software to convert computers to adjust for this growing concern, Peritus Software Services, is slated to go public at between $12 to $14 a share, raising $37.7 million.
Following the success of rival Crystal Systems Solutions, which has doubled since going public earlier this year, Peritus should be well received. Not only is Peritus addressing a market that it estimates could be upwards of $600 billion, but Renaissance Capital analyst Ken Flemming says Peritus has good technology.
Peritus also has a history of rising revenues. First-quarter sales this year doubled from the comparable period a year ago. In the same quarter, Peritus managed to turn in a profit after a year of losses.
Other issues viewed by some market watchers as "hot deals" are Pierce Leahy and Cal Dive. Pierce Leahy, an archive-records management company, is expected to go public at between $15 to $18 a share, raising $77.5 million. Its business strategy is to buy up its competitors. Since 1992, Pierce Leahy has grown its revenues by nearly 20 percent annually through 26 acquisitions.
However, Manish Shah of IPO Maven cautions that because of the company's "constant pressure to look for acquisition targets," it might sacrifice earnings.
Cal Dive, a provider of sub-sea construction for the offshore natural gas and oil industry, takes a different strategy for increasing revenues. The company hopes to capitalize on the recent discovery of deepwater fields, particularly in the Gulf of Mexico. Cal Dive is expected to raise about $47 million with this IPO.
-- Bambi Francisco
|
|
|
|
|
 |
|
