A busy initial-public-offering market is warming up for autumn.
Chinese e-commerce giant Alibaba Group Holding Ltd. plans this month to begin a marketing roadshow for what could be the largest IPO ever, potentially raising more than $20 billion. New York office landlord Paramount Group Inc. filed preliminary paperwork last week for what may be the largest-ever debut by a real-estate investment trust. Online-storage startup Box Inc. and consumer-credit upstart LendingClub Corp. also are expected to price offerings in coming months.
The anticipated flood would cap off the busiest period for new U.S. share listings in decades. Companies this year have raised $46.4 billion, the most in the first eight months of any year since 2000, according to data provider Dealogic.
"We still have a ton in the hopper, and I think people are optimistic about being able to execute deals after Labor Day," said Marc Jaffe, co-chair of the global capital-markets practice at law firm Latham & Watkins LLP.
U.S. stocks' climb to record highs is affording companies an opportunity to sell shares at attractive valuations. Money managers say many IPOs look like good bets. Some feature rapid expansion in profit or sales and offer new ways to bet on trends like the emergence of cloud-based business software or increased U.S. energy production thanks to the shale-drilling boom.
"If you have a good growth opportunity, investors are there," said Scott McNeill, chief financial officer of Dallas-based oil driller RSP Permian Inc. RSPP +2.66%
The company and its early investors sold a combined $744 million worth of stock in a January IPO and a "follow-on" stock offering last month. RSP Permian is looking to finance West Texas oil wells without taking on too much debt.
IPOs further benefit from a perception among many investors that other assets, including bonds of all types, are fully valued following sharp rallies.
"With interest rates low and with good corporate-earnings growth and nowhere else to invest, risk appetite is alive and well," said Matt Litfin, who helps oversee $4.6 billion as a portfolio manager at William Blair Funds.
To be sure, these deals carry their share of risk. Companies often go public at an early stage, when their sales and profit outlooks are particularly unclear.
This year, IPOs are attracting a higher price tag relative to their sales than in the past. In 2014, companies have fetched a median IPO price 8.2 times their latest year's sales, versus a median price-to-sales ratio of 3.6 in the previous 12 years, according to data compiled by University of Florida professor Jay Ritter, who researches IPOs.
That is in part because this year has featured a disproportionate share of IPOs by biotechnology companies, which often go public without meaningful revenue. Excluding biotech firms, this year's IPOs have fetched a median price-to-sales ratio of 4.2 times.
Some market watchers say the IPO boom has thinned the ranks of attractive companies, particularly in hot sectors such as technology.
"Maybe a year and a half ago, I had eight to 10 [prospective IPOs] that I was heavily anticipating. Now I only have three or four," said Tony Ursillo, technology equity analyst and portfolio manager at fund firm Loomis, Sayles & Co., which oversees $221 billion.
Since IPO activity accelerated last year, some onetime darlings have fallen from grace. Advertising-technology provider Rocket Fuel Inc. FUEL +3.69% 's stock rallied as much as 148% in the months after its September 2013 IPO, but on Friday the shares closed 44% below their IPO offer price.
Market participants said the rally in these so-called momentum stocks was driven by short-term-oriented bets that their share-price gains alone would attract further buying. Many of these stocks sold off sharply this March and April.
Fund managers stress that companies going public now generally are more solid than in the late 1990s and early 2000, when a host of dot-com companies, with little more than a marketing plan and a catchy name, went public.
"One thing we've seen this year is a good diversity across the business, and we'd expect that to continue," said Jeffrey Bunzel, head of equity capital markets for the Americas at Deutsche Bank AG.
The health-care sector, which has accounted for the largest share of IPO activity of any industry in the past year, also represents the biggest share of the public backlog, according to Dealogic.
Also on the horizon is a slate of big energy deals, driven by surging production on U.S. soil. For one, Royal Dutch Shell RDSA.LN +0.62% PLC plans to split off some oil-pipeline assets into a type of high-dividend-paying company called a master limited partnership, following similar moves by Marathon Petroleum Corp. MPC +0.25% and Valero Energy Corp. VLO -0.04% in recent years.
Phillips 66 PSX +0.47% Partners LP, an MLP spun out of refiner Phillips 66 last year, has seen its shares rally 222% since its July 2013 IPO. Those were among the biggest share gains among companies that went public in the U.S. last year.
"Treasury yields are low, and people still need income," said Scott Moore, manager of the $30 million Buffalo Dividend Focus fund.
Mr. Moore said participating in IPOs has bolstered his fund's performance this year. He declined to name specific stocks, but his fund's holdings earlier this year included Midcoast Energy Partners MEP +3.54% LP and EQT Midstream Partners EQM +0.37% LP, two MLPs that have seen big share-price gains, according to Morningstar.
Corrections & Amplifications
In 2014, companies have fetched a median IPO price 8.2 times their latest year's sales, versus a median price-to-sales ratio of 3.6 in the previous 12 years, according to data compiled by University of Florida professor Jay Ritter. His data also showed that excluding biotech firms, this year's IPOs have fetched a median price-to-sales ratio of 4.2 times. A previous version of this article misstated that the ratios were averages, not medians.
