5 IPOs Post Positive Returns

Includes: MKTG, SGNT, VNET
by: Renaissance Capital IPO Research

The US IPO market continues to show signs of improvement with six US companies completing their public offerings this week and raising an aggregate of $1.5 billion.

Five of the six IPOs were priced at or above the midpoint of their initially proposed price range, implying solid investor demand for the deals. These five newly public companies also ended the week in positive territory, with China-based data center services provider 21Vianet Group (VNET+25%), on-demand marketing software firm Responsys (MKTG; +28%) and generic injectables company Sagent Pharmaceuticals (SGNT; +26%) among the group's winners.

With 47 data centers and 5,700 cabinets across 33 cities, 21Vianet (NASDAQ:VNET) is China's largest carrier-neutral Internet data center services provider. Plays on Internet growth in China have been largely successful in the IPO market since Youku.com (NYSE:YOKU) went public last December and jumped 161% on its first day of trading.

Responsys (NASDAQ:MKTG) provides on-demand software to nearly 300 customers, enabling them to create, execute and analyze email marketing campaigns. Software-as-a-service stocks have also been well-received by IPO investors with companies such as ServiceSource International (NASDAQ:SREV) and Cornerstone OnDemand (NASDAQ:CSOD) posting double-digit returns in their market debuts.

Sagent (NASDAQ:SGNT) sources and sells 22 generic injectables to the US hospital market. It outsources development and manufacturing to its international network of low-cost suppliers, instead focusing on its in-house regulatory and marketing expertise. The unique company currently has 46 additional drug candidates in the pipeline and plans to launch them by the end of next year.

This week's wave of IPO filings suggests high levels of IPO activity are likely to continue. A total of ten companies submitted their initial IPO filings with the SEC this week, including real estate information marketplace Zillow (ZLOW), women's specialty retailer Francesca (NASDAQ:FRAN) and Chinese online dating site Jiayuan.com (NASDAQ:DATE).