IPOs: Not dead yet

Four companies braved the hostile initial public offering  market Thursday and successfully sold their shares to the public for the first time - giving some hope investors are loosening up again.

Ending what had been an eerie start to the year for IPOs, payment technology company Cotiviti Holdings (COTV), wallboard distributor GMS (GMS), biotech Reata Pharmaceuticals (RETA) and food distributor US Foods (USFD) collectively sold $1.5 billion in stock to investors, according to data from Renaissance Capital. It was the year's busiest day for IPOs in terms of proceeds raised and number of deals offered, Renaissance says.

"This is firm evidence of the IPO market's recovery – the US IPO market has found its footing," says Renaissance analyst Matthew Kennedy.

US Foods was the largest deal of the group by far. The Illinois-based company sold 44.4 million shares at $23 apiece, raising $1.0 billion. Investors seemed to like what they saw as they drove the shares up another 8.3% to $24.91 in the first day of trading.

Reata was the deal with the strongest first day reception, jumping 18.8% to $13.07 from the $11-a-share initial price. The company is developing treatments for pulmonary hypertension. Georgia-based GMS also gained, rising 4.3% in its first day of trading to $21.91 a share, up from the initial price of $21.

Not all the day's deals found successful reception, though, as Cotiviti fell 9% to $17.11 from the initial price of $19 a share.

The pack of IPOs was a welcome sight for investors eager to get their hands on a fresh supply of stock. Just 31 companies have sold their shares to the public for the first time this year, which is down 54% from the same year-ago period. That comes after a weak year for deals in 2015, when there were just 170 IPOs during the entire year, which was down 38% from 2014.

Investors hope the successful reception of these last four deals will pave the way for more. But insiders know that the IPO market takes its cues from the broad market, so stocks at large will need to firm up or even gain before investors will continue to take chances on new stock.

IPO pricings have been weak

Year, # IPO pricings

2016 YTD, 31

2015, 170

2014, 275

2013, 222

2012, 128

2011, 125

Source: Renaissance Capital