Dream Finders Homes Inc.’s stock seemed like a dream come true for shareholders who bought it at the beginning of 2023.
The Jacksonville-based company quadrupled in price during the year, as prospects for homebuilders brightened.
It was a good year for stocks in general with the S&P 500 index up 24% and the Dow Jones Industrial Average up 13%, both finishing near record highs.
However, it was even better for companies that build new homes, with the S&P Homebuilders Select Industry Index jumping 58.56%.
Expectations that mortgage rates will be falling in 2024 and demand for new homes are driving interest in the stocks.
While Dream Finders jumped 310% to $35.53 in 2023, the company just rebounded to the early highs it reached after its 2021 initial public offering.
The stock sold for $13 a share in the January 2021 IPO and was an immediate success, reaching as high as $36.60 in June 2021.
However, the stock tumbled in 2022 as rising rates and supply chain issues hurt the industry, and Dream Finders fell short of its goal of delivering 7,000 new homes.
One other Jacksonville-based company is also benefiting from the improved market for home sales.
Title insurer Fidelity National Financial Inc. rose 36% in 2023, with basically all of the stock’s increase coming in the second half of the year as the prospect of lower mortgage rates creates higher demand for title policies.
Another big gainer in 2023 was Patriot Transportation Holding Inc., which was acquired Dec. 21 at a value more than double its trading price.
Oklahoma City-based United Petroleum Transports Inc. was trying to buy the Jacksonville-based trucking company for more than a year, but Patriot’s board of directors held out for a better price.
They were finally rewarded when UPT agreed to pay $16.26 a share Nov. 1, which was 131% higher than Patriot’s price at the beginning of 2023.
Among stocks that trade above $3, one other Jacksonville-based company beat the big gains in the S&P 500 last year.
Cadre Holdings Inc. surged in the second half of the year and ended 2023 with a 63% gain, third best among Jacksonville-based companies.
The Jacksonville-based company makes safety and survivability products mainly for law enforcement and first responders and has a history of growing through acquisitions.
Warren Kanders said several times in 2023 the company was looking for more merger opportunities.
But even without acquisitions, Cadre has been anticipating revenue growth as global tensions increase demand for its products.
Cadre finally did announce a deal Dec. 22.
Cadre agreed to acquire ICOR Technology Inc., a Canadian maker of explosive ordnance disposal robots and specialized protective security equipment for EOD and military organizations.
ICOR generated about 26 million Canadian dollars in revenue for the fiscal year that ended July 31, equal to almost $20 million in U.S. dollars.
Cadre said in November it was expecting 2023 revenue of $477 million to $481 million.
Kanders had hinted at the deal in Cadre’s third-quarter conference call with analysts when he said the company was working on a tuck-in acquisition.
“We are pleased to enter into the agreement to acquire ICOR, meeting our established M&A criteria. With a leading market position, high margins, compelling macroeconomic trends, and resiliency through cycles, ICOR is an ideal add-on to Cadre’s EOD business,” Kanders said in a news release.
Cadre did not announce terms of the deal in the release but in a Securities and Exchange Commission filing, the company said it agreed to pay up to 60 million Canadian dollars, or about $45 million.
The company said in the release it will fund the purchase with available cash on its balance sheet and potentially draw on its existing credit facility.
Cadre expects to close the deal in the first quarter.
Cadrenal Therapeutics Inc. went public in January 2023 at $5 per share but with no products on the market, the pharmaceutical development company’s stock lost 85% of its value, ending the year at 74 cents.
That made it the worst performer among public companies headquartered in Northeast Florida.
However, two analysts looking to the future recommended the stock in late 2023.
Noble Capital Markets analyst Robert LeBoyer initiated coverage of Cadrenal on Dec. 18 with an “outperform” rating and a $4 price target.
That followed a November report by H.C. Wainwright analyst Joseph Pantginis rating Cadrenal at “buy” with a $3 price target.
Ponte Vedra Beach-based Cadrenal is developing an anticoagulant drug called tecarfarin, which it sees as an alternative to a commonly prescribed treatment called warfarin.
“Tecarfarin was originally developed for broad use and has shown benefits in orphan populations that cannot take DOAC (direct oral anticoagulants) drugs and have no therapy other than warfarin,” LeBoyer said in his report.
“Tecarfarin has the same mechanism of action as warfarin, but uses different metabolic pathways that avoids drug-drug interactions and has more predictable bloodstream levels,” he said.
LeBoyer estimates Cadrenal can receive regulatory approval for the drug in 2027 and launch the product commercially in 2028.
His $4 price target is based on an estimate that Cadrenal can earn $1.31 a share in 2029.
Wainwright projects Cadrenal to begin receiving revenue from tecarfarin in 2027.
Rayonier Inc.’s stock price increased by just 1% last year.
However, the timber and real estate company based in Wildlight in Nassau County rewards its shareholders with dividends.
On Dec. 18, Rayonier declared a special one-time cash dividend of 20 cents per share after completing a previously announced sale of 55,000 acres of timberland in Oregon to Manulife Investment Management for $242 million.
The company said it is using about $30 million of the proceeds from the sale for the dividend, with much of the rest going to paying down debt.
“The payment of this special dividend addresses increased REIT taxable income resulting from our disposition of 55,000 acres of timberland in Oregon, and further demonstrates our commitment to returning capital to shareholders as part of the asset disposition and capital structure realignment plan announced on November 1st,” CEO David Nunes said in a news release.
Rayonier also announced Nov. 1 that Nunes is retiring March 31, and will be succeeded by President and Chief Financial Officer Mark McHugh.
Including the special dividend, which will be paid in January, Rayonier produced a total return (stock price appreciation plus dividends) of 5% in 2023.
Like Rayonier, Jacksonville-based Regency Centers Corp. is a real estate investment trust that many investors buy for its consistent dividend payments.
Regency’s stock price rose 7% in 2023 but including dividends, its total shareholder return was 11%.
Morgan Stanley analyst Ronald Kamdem is expecting Regency’s trading price to rise as the market anticipates interest rate cuts from the Federal Reserve.
Kamdem raised his rating on the shopping center developer from “equal weight” to “overweight” and set a price target of $75 for the stock, which was trading at $66.90 at the time of his Dec. 21 report on the REIT sector.
“Regency has one of the highest quality portfolios in the open air center space as measured by rent per square foot of $24.25 and occupancy of 94.6%,” Kamdem said in the report.
“While expected organic growth of +2.9% is relatively in-line with peers, what is most underappreciated by the market is the external growth opportunity that is supported by what we view as the best balance sheet in the sector,” he said.
Kamdem said history suggests an increase in REIT stocks in the coming months.
Looking at the last four times the Fed has increased rates and then paused, REITs outperformed the S&P 500 index by more than 20% within 16 months after a Fed pause, he said.
“REITs have rallied +23% since the end of October, and we see the prospect for another 10-15% rally,” he said.
The Salt Life Group had lower sales and earnings for fiscal 2023, parent company Delta Apparel Inc. said in its annual report filed Dec. 28.
The apparel brand founded in Jacksonville Beach in 2003 had sales of $59 million in the fiscal year ended Sept. 30, down 1.7% from fiscal 2022.
Operating income for Salt Life fell 10.4% to $6.2 million.
Delta’s annual report said Salt Life’s lower results were caused by “some temporary softness in its wholesale channel stemming from higher inventory levels at retail.”
The company expects sales to rebound with growth in direct-to-consumer sales.
Salt Life ended the calendar year with 27 stores, including one in Jacksonville Beach and a new store that opened at the St. Augustine Premium Outlets in October.
Delta announced Oct. 2 it received an unsolicited offer to buy Salt Life and its board of directors was evaluating the offer.
The company has said nothing about the offer since and it was not addressed in the annual report.
Duluth, Georgia-based Delta bought Salt Life for $37 million in 2013.
It does not own the three Salt Life Food Shack restaurants in the Jacksonville area.
Delta’s total sales fell 14.3% in fiscal 2023 to $415.4 million. Adjusted net income fell 83% to $3.3 million, or 47 cents a share.
The company sells apparel under the Delta, Salt Life and Soffe brands.