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One Fine Day for IPOs

Updated from 2:26 p.m. EST

The new-issues market got a second wind Thursday, with five IPOs advancing in their debuts.

The performance, as the deals come from a broad array of sectors, is refreshing after two of three offerings fell below their issue levels Tuesday. "When a variety of companies come public and do well, it is a mark of a healthy market," said Francis Gaskins, editor of

Insurer Assurant (AIZ - Get Report) was lately up $2.55, or 11.6%, to $24.55 after pricing 80 million shares at $22 a share in a deal valued at $1.76 billion, the biggest of the year.

According to a prospectus filing with the Securities and Exchange Commission, Assurant had net income of $263 million in the nine months ended Sept. 30, 2003 on revenue of $5.24 billion. The IPO is a spinoff from Dutch financial-services conglomerate Fortis.

"The Assurant offering is a huge deal," said Gaskins. "The underwriters had to price it well in order to sell it. And so, it came public at a low price-to-earnings ratio." Based on earnings for the first nine months of 2003, Assurant is trading at a multiple of 8.9.

In general, as they emerge from hibernation, IPO investors have favored profitable companies. The market reacted well to a $105 million offering from consumer debt collector Asset Acceptance (AACC) Thursday. The firm earned $12.1 million in the first nine months of last year. Shares were recently higher $1.50, or 10%, to $16.50.

Even some money-losing names were doing well Thursday. Biotech Renovis (RNVS) was ahead $2.80, or 23%, to $14.89. "The company has a low price-to-book ratio," said Gaskins.

Meanwhile, Bakers Footwear (BKRS) was up 48 cents, or 6.19%, to $8.25. The company had a net loss of $3.6 million for the nine months ended October 2003.

Oil and gas driller TODCO (THE), a $144 million spinoff of Transocean Holdings was lifting $1.40, or 11.7%, to $13.40, though it is unprofitable. "They're the biggest supplier of drilling rigs off the Gulf of Mexico," said Gaskins.

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