The market for IPOs has been struggling lately, but not so for Blue Nile .
The online jeweler gained 15% Friday, for a two-day gain of 31% from Thursday’s $25 opening price.
So why is the market embracing Blue Nile? In a word: value. With $1.65 in trailing 12-month earnings, NILE came public at just 15 times earnings. At a PE of 19.9 as of Friday’s close, the market may well decide it’s still cheap.
Net income of $27 million dwarfed capital expenditures of $3.5 million last year, making for a very capital-efficient company. The company had $20 million in cash and no debt – before it raised $32 million in its IPO.
Sales were up 79% last year, and earnings were up more than 1,300%.
The company faces new competition in Amazon.com , but with numbers like that, it’s no wonder investors were willing to take the chance.
Stocks finished up Friday in a volatile options expiry trading session, buoyed by falling oil prices on Saudi Arabia’s proposal to raise OPEC output.
The Nasdaq climbed 15 to 1912, the S&P 500 gained 4 to 1093, and the Dow rose 29 to 9966. Volume rose to 1.26 billion shares on the NYSE, but declined to 1.39 billion on the Nasdaq. Advancers led 21-10 on the NYSE, and 19-11 on the Nasdaq. Upside volume was 68% on the NYSE, and 74% on the Nasdaq. New highs-new lows were 24-29 on the NYSE, and 36-78 on the Nasdaq.
Marvell and Serena
surged after beating estimates.
McData fell 5% after missing revenue estimates and warning.
Genesis Microchip soared 15% on a favorable patent ruling.
ADC Telecom surged 13% on a Merrill Lynch upgrade.
SBC edged higher at the start of a four-day strike.
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