IPO VIEW-K&F Industries market takeoff may face turbulence

Bare Escentuals and Shutterfly rise in debut

NEW YORK, Sept 29 (Reuters) - A pair of initial public offerings hit the market with running starts on Friday, cashing in on a recent surge in the broader market and an up-tick in IPOs.

After a summer of IPO delays, investors snatched up offerings from a trio of technology companies and a pair from China that have floated shares since Labor Day.

On Friday, shares of cosmetics maker Bare Escentuals Inc. (BARE.O: Quote, Profile, Research) and Internet photo service Shutterfly Inc. (SFLY.O: Quote, Profile, Research) opened above offering prices that priced above and at the top of forecast ranges.

"Investors are euphoric right now," said Tom Taulli, founder of InvestorOffering.com. "There are not a lot of offerings out there right now, but the offerings that are coming out are good companies."

Shutterfly shares opened up 3 percent at $15.50, before climbing as high as 11.5 percent. Shares closed at $15.55.

Shares of Bare Escentuals opened up 27 percent at $28 before rising as high as $29.10. The shares retreated to close at $27.15.

Based on the $28 opening price, Bare Escentuals shares traded 49 times higher than the company's annualized earnings. However, the company's ability to leverage its popularity gives it room for growth, said Francis Gaskins, an independent IPO analyst and president of IPO Desktop.

"It's hard for a company to create its own brand image," Gaskins said. "But they found a way.

The San Francisco-based company develops, markets and sells cosmetics and skin care products under the brand names i.d. bareMinerals, i.d., RareMinerals, Bare Escentuals, and md formulations.

The offering price gave the company an initial market capitalization of $1.9 billion.

The company's price to earnings ratio can be compared with cosmetics maker Estee Lauder Cos. Inc. (EL.N: Quote, Profile, Research), Gaskins said.

Shares of Estee Lauder fell about 1.5 percent to $40.28 Friday. Shares of cosmetics maker Avon Products Inc. (AVP.N: Quote, Profile, Research) fell about 1.2 percent to $30.85.

Shutterfly investors are looking for a piece of the growing popularity of digital photography, Gaskins said.

Some 90 million digital cameras, which record images to a memory card, are expected to be sold globally this year, according to research company Infotrends. Despite its popularity, digital picture-taking leaves many photographers with the dilemma of how to print their shots.

Online services, such as Shutterfly, Eastman Kodak's (EK.N: Quote, Profile, Research) EasyShare Gallery, Hewlett-Packard Co.'s (HPQ.N: Quote, Profile, Research) Snapfish and Yahoo Inc. (YHOO.O: Quote, Profile, Research) Flickr, let users load those pictures online, where they can be edited, shared with others, and printed and mailed.