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Byline: Steve Watkins
Investor's Business Daily
Companies that took their first steps into the public markets in 2000 suffered a lot of growing pains. Only about one-fourth of those that went public during the year posted any gains from their initial offering price.
The initial public offering market swooned with the rest of the equity markets,sending dozens of new issues plunging. Of course, it helped if you weren't in the Internet field. Of the worst-performing 2
5% of IPOs, nearly two-thirds were in the Internet industry group.
Earnings had a lot to do with it. Barely 10% of the worst performers posted IBDEarnings Per Share Ratings of 50 or better, meaning their profits grew faster than half of all public companies. But almost half of the best IPO performers turned in above-average earnings growth.
So plenty of winners were out there if you knew where to find them. And they weren't all stocks that got a first-day pop and then strove to cut their lossesthrough the year. Many have grown steadily, and are poised for more gains.