BofA’s run in the Dow Jones index lasts only five years
When a corporation becomes part of the Dow Jones industrial average, it's usually a good thing.
The benchmark stock index only consists of 30 companies, so inclusion in the list is a sign of prestige that few businesses can boast.
However, as Reuters news service said, Bank of America Corp.'s run in the Dow index "was not one for the history books."
Bank of America's stock was down more than 65 percent since joining the index in February 2008, Reuters said, when S&P Dow Jones Indices LLC announced last week that the banking giant is being removed from the index.
Of course, Bank of America joined the Dow just when the financial crisis kicked into high gear, sending bank stocks plummeting. Bank of America, which traded above $50 in early 2007, fell below $5 by early 2009 and hasn't completely recovered, trading mainly between $14 and $15 for the past two months.
Bank of America is being replaced in the Dow by The Goldman Sachs Group Inc.
In addition to that change, Visa Inc. is replacing Hewlett-Packard Co. and Nike Inc. is replacing Alcoa Inc. in the Dow industrials after the close of trading on Friday.
"The index changes were prompted by the low stock price of the three companies slated for removal and the index committee's desire to diversify the sector and industry group representation of the index," S&P Dow Jones Indices said in a news release.
Charlotte, N.C.-based Bank of America is the largest corporate employer in the Jacksonville area with 6,400 workers, according to JAXUSA Partnership data. The only non-government employer with more local workers is Baptist Health, with 8,270.
Bank of America's local employment base grew considerably when it acquired Merrill Lynch & Co. in 2009.
The company dominates the local banking market with a 45.5 percent share of deposits in the Jacksonville metropolitan area as of June 30, 2012, according to the latest data available from the Federal Deposit Insurance Corp.
However, that large deposit base includes corporate and institutional accounts from outside the area that are credited to the bank's main Jacksonville office.
Bank of America made more headlines last week when several news outlets, led by Bloomberg News, reported the company is closing down 16 mortgage offices nationwide and cutting 2,100 jobs in its mortgage division. Many large mortgage lenders are cutting back as rising interest rates reduce home loan activity.
A Bank of America spokeswoman said the company is not closing any Jacksonville offices and is only cutting two positions in Jacksonville, which are both involved in its delinquent loan portfolio division.
Advanced Disposal a $1.29 billion business
Advanced Disposal Services, which moved into new headquarters in Nocatee in St. Johns County in July, has grown into a pretty large company after several mergers.
The privately owned company's businesses had total revenue of $1.29 billion last year and produced operating income of $41.8 million, according to a Securities and Exchange Commission filing last week.
The company had to reveal its financial data in an SEC filing because of the issuance of $550 million in publicly traded senior notes, which are replacing $550 million in privately placed notes it issued last year.
The notes are officially being issued by ADS Waste Holdings Inc., doing business as Advanced Disposal Services, which was formed as a parent company for several businesses under its
corporate umbrella, the filing said.
"We are the largest privately owned non-hazardous solid waste management company in the United States and the fourth-largest overall, as measured by revenue," the filing said.
The company operates in a total of 20 U.S. states.
In the first six months of this year, the company produced revenue of $645.8 million and $13 million in operating income. After interest expense, it recorded a net loss of $49.5 million.
Dick's Wings owner seeks reverse stock split
American Restaurant Concepts Inc. has called a special meeting of stockholders to authorize a reverse stock split.
Stockholders will be asked to approve a measure that would allow the board of directors to proceed with a reverse split at a ratio between 1-for-5 and 1-for-50. The final decision on the split will be left up to the board of directors.
According to the proxy statement filed for the special meeting, the company has about 37.7 million shares outstanding. A 1-for-5 split will reduce the number of shares to about 7.5 million, while a 1-for-50 split would reduce it to 754,171 shares.
American Restaurant Concepts, which franchises the Dick's Wings and Grill restaurant chain, is hoping a reverse split will make its shares more attractive by increasing the value of shares in the marketplace.
The stock actually reached a 52-week high of 43 cents last week but as the company states in the proxy, many investors will not consider buying stocks priced below $1. It also said a higher stock price could make the company more appealing to potential employees.
The special meeting is scheduled for Oct. 21. Although the company recently moved its headquarters from Jacksonville to Louisiana, the meeting will be held at its Jacksonville office.
Firm unloading Web.com shares
General Atlantic LLC continues to unload its stake in Jacksonville-based Web.com Group Inc.
The Greenwich, Conn., investment firm became the largest shareholder of Web.com after Web.com's 2011 acquisition of Network Solutions. General Atlantic was the majority owner of Network Solutions and ended up with about one-third of Web.com's stock after the merger.
However, General Atlantic has been selling off large blocks of Web.com shares this year. It sold 2.3 million in February and 2 million in May, according to SEC filings.
In another SEC filing, General Atlantic said it sold 1.25 million shares last week at $30 each. That reduced its stake in Web.com to 5.05 percent.
Analyst upgrades FIS
SunTrust Robinson Humphrey analyst Andrew Jeffrey last week upgraded his rating on Jacksonville-based Fidelity National Information Services Inc. from "neutral" to "buy," and increased his price target on the stock from $47 to $52. The stock was listed at $45.11 when Jeffrey issued his report.
"We are increasingly confident that Fidelity National's large financial institution exposure, diversified global footprint and relatively low reliance on next-generation technology position it for consistent financial performance and perhaps modest organic revenue growth acceleration. These positives are not currently reflected in the stock's valuation, in our opinion," he said in the report.
The company, which calls itself FIS, provides technology services for banks. Jeffrey said FIS' main competitor, Fiserv, "has invested heavily in mobile technology," but he is impressed that FIS is not rushing ahead with the latest technology.
"While it has some next-gen offerings, a mobile strategy is not central to its long-term growth objectives. We favor this approach, considering uncertain pricing models and the risk of rapid technology change," he said.
Analyst rates Regency at 'neutral'
Janney Capital Markets analyst Michael Gorman initiated coverage of Jacksonville-based Regency Centers Corp. last week with a "neutral" rating.
"Regency has a strong, grocer-anchored shopping center portfolio that management has done well to reposition since the credit crisis and recession," Gorman said in his report.
"Moreover, the company has largely worked through its legacy development pipeline from before the downturn, which should clear the way for higher development returns going forward," he said.
"However, we estimate that the shares are currently trading above their historical average valuation levels, while we estimate only in-line funds from operations growth this year and next."
S&P's brighter view for Washington Post
Standard & Poor's Ratings Services last week raised its outlook for The Washington Post Co. from "negative" to "stable," because of the pending sale of its flagship newspaper.
"The outlook revision reflects our view that the company's operating performance will become more stable after the sale of the underperforming newspaper business, which we expect to close in October," S&P said.
The company last month announced an agreement to sell The Washington Post newspaper to Amazon.com founder Jeff Bezos.
That leaves the company with cable and broadcast television businesses, which include Jacksonville television station WJXT TV-4. It also owns the Kaplan Inc. education business.
"The relatively predictable cable and broadcasting businesses now account for roughly 80 percent of earnings before interest, taxes, depreciation and amortization, which we expect will offset the volatility of the low-margined and underperforming education operations," S&P said.
"Operating performance of the broadcasting segment's group of six top-50 market TV stations (accounting for roughly one-quarter of EBITDA) is cyclical and sensitive to the timing of elections, but generates good cash flow," it said.
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