When IPO investors try to remember what happened this September, some will no doubt recall when Cogent Systems went public, scoring the year’s third-best opening-day gain.

Cogent Systems, an automated fingerprint solutions provider based in South Pasadena, California, finished its first day of trading as a public company on Friday at $17.98 per share – up almost 50 percent from its initial offering price of $12 per share.

Cogent Systems was among six IPOs priced last week, in a calendar that called for eight deals. Of those six that made it to market, five IPOs closed on Friday above their initial offering prices. Only one was a broken deal, closing below its initial offering price.

To put it in perspective, look at what happened in the stock market: the trend was down, down, down.

The Dow Jones Industrial Average closed on Friday, September 24, at 10,047.24, down 2.31 percent from 10,204.89, its close on Friday, September 17. The Nasdaq Composite Index closed at 1,879.48, down 1.60 percent from 1,910.09, its close a week earlier. The Standard & Poor’s 500 Index closed at 1,110.11, down 1.60 percent from 1,128.55, its close on the previous Friday.

U.S. crude oil prices leapt again to a fresh closing high, crowding closer to the $50-a-barrel mark. That had a more sobering effect on the stock market than finding out your parents have signed up as chaperones for the senior prom.

Best opening-day gains of 2004

Now back to the IPO market and the tale of Cogent Systems, the little fingerprinting company that could.

Cogent Systems priced 12 million shares at $12 each on Thursday evening, September 23. The day before it went public, on September 22, the company increased the proposed initial offering price to $10 to $12 per share from $8.50 to $9.50 per share. The IPO traded in Friday’s market and closed its opening day at $17.98 per share - up 49.8 percent from its initial offering price. With that performance, Cogent Systems ranked No. 3 among the best opening-day gains for an IPO in 2004.

- No. 1 IPO opening-day gainer for 2004

JED Oil, a Canadian oil and natural gas company, priced 1.67 million shares at $5.50 each on April 5. The IPO closed its opening day at $11.20 per share - up 103.6 percent from its initial offering price.

JED Oil closed on Friday at $12.71 per share - up 131.1 percent from its initial offering price.

- No. 2 IPO opening-day gainer for 2004

Salesforce.com, a San Francisco-based provider of application services for organizations to share customer information with businesses, priced 10 million shares at $11.50 per share on June 22. The IPO closed its opening day at $17.20 per share - up 56.4 percent from its initial offering price.

Salesforce.com closed Friday at $16.04 per share - up 45.8 percent from its initial offering price.

Raising the roof

The Beacon Roofing Supply IPO turned out to be last week’s sleeper success story.

Beacon Roofing Supply, a distributor of residential and non-residential roofing materials based in Peabody, Massachusetts, priced 13.5 million shares at $13 each on Wednesday evening, September 22. The deal was priced at the mid-point of its $12- to $14-per-share filing range. The IPO began trading on Thursday and closed its opening day at $15.99 per share, up 23 percent from its initial offering price.

Beacon Roofing Supply closed on Friday at $15.95 per share, up 22.7 percent from its initial offering price.

Broken deal

There was only one loser from last week’s IPO class. Nephros finished its first day of public trading below its initial offering price, which made it a broken deal.

Nephros is a medical supplier based in New York City that develops technology and products to treat advanced end-stage renal disease. The company priced 2.1 million shares at $6 each on Monday evening, September 20. The company initially had filed to price 2.5 million shares at $6 to $7 each and had been on and off the IPO calendar since the week of July 26, 2004. Another co-lead manager had been recruited just before the deal was priced on Monday night. The Nephros IPO started trading on Tuesday and closed its opening day at $5.85 per share - down 2.5 percent from its initial offering price.

Nephros closed on Friday at $5.81 per share - down 3.2 percent from its initial offering price.

What’s the score?

By the time the stock market closed on Friday, the scorecard for the IPOs priced during the week stood at:

Number of IPOs priced: 6

Number closed above offering price: 5

Number closed below offering price: 1

Number closed unchanged from offering price: 0

Average gain: 15.88 percent

Nasdaq: off 1.61 percent

For the year to date, the scorecard reads:

Number of IPOs priced: 147

Number closed above offering price: 95

Number closed below offering price: 51

Number closed unchanged from offering price: 1

Average gain: 14.27 percent

Nasdaq: off 6.18 percent

Heavy traffic

The SEC’s filing window for new issues did moderately brisk business during the week of September 20. Five companies filed plans to go public, raising 2004’s numbers to 292 companies that have filed IPO plans. That’s heavy traffic when one considers that only 251 companies filed plans to go public during the previous three years combined, according to available records.

As of Friday’s close, 168 new issues were in the IPO pipeline waiting to get priced and looking to raise $34.3 billion. On January 2, 2004, there were just 49 new issues in the IPO pipeline, hoping to raise $8.9 billion.

October harvest

The prevailing theme for October is harvest, and this doesn’t just apply to the Farmer’s Almanac. The feedback from Wall Street’s syndicate desks is to look for a good crop of IPOs in October. The IPO calendar is building, the filings are increasing, and the aftermarket performance of 2004’s IPO class is outshining the Nasdaq, the barometer of the IPO market.

For savvy IPO investors, October may not be a bad month to don the striped overalls and Timberland boots. After all, it’s harvest time.