Speculating on penny stocks isn’t necessarily a sound investment strategy. But as it turned out, the two best performing Jacksonville stocks last year, in terms of percentage gain, were two companies that began 2011 priced below $1 a share.
ParkerVision Inc. and International Baler Corp. are two companies that have been around for a while but carry low stock prices.
ParkerVision was quoted at 46 cents at the beginning of last year and was trading at 83 cents at Christmastime. International Baler rose from 64 cents to $1.15 over the same time span. That’s an 80 percent gain for both companies.
The ParkerVision story is well known by anyone familiar with companies headquartered in Jacksonville. It has been developing wireless radio technology for use in mobile devices and has been talking about several deals in the works with manufacturers for years. But the company recorded no revenue in the first nine months of 2011 and has seen relatively little revenue in its history. And ParkerVision has lost money every year since it was formed in 1989.
International Baler is probably less well known but has produced better results.
The company in Northwest Jacksonville has been around since 1975 and produces balers, machines that compress waste material into bales so they can be shipped easily for disposal or recycling.
It was formerly known as Waste Technology Corp. but in 2009 changed its name to its subsidiary, International Baler.
An Indiana investor who owns several industrial companies, Leland Boren, controls 51 percent of International Baler’s stock.
International Baler had a net loss in fiscal 2009 but rebounded with a profit of $254,298 on sales of $7.6 million in the fiscal year ended Oct. 31, 2010.
It did even better last year, with earnings of $520,259 on sales of $7.8 million in the nine-month period ended July 31.
The company has said improving market conditions have helped its results. That’s apparently helping the stock as well.
Body Central leads the rest of the pack
Among more conventionally priced stocks, the best showing among Jacksonville-based companies last year was Body Central Corp., which was up 68 percent through Christmas weekend.
The young women’s fashion retailer has been blowing away investors with impressive sales results since going public in the fall of 2010. Its total revenue rose 22.4 percent in the first nine months of last year and comparable-store sales rose 13 percent.
Body Central’s stock traded as high as $26.98 in April, more than double its initial public offering price of $13 in October 2010. It’s been trading in the mid-$20s recently.
Two other Jacksonville companies benefited from mergers to provide big shareholder returns in 2011.
Web.com Group Inc.’s stock rose 38 percent, helped by two major deals. The company that provides Internet development services for businesses first grew its annual revenue from about $100 million to $180 million in 2010 by acquiring competitor Register.com.
Last year, it merged with Network Solutions in a deal that will grow the company to about $450 million in annual revenue.
Meanwhile, Winn-Dixie Stores Inc.’s stock was obviously lifted by its agreement to merge into Bi-Lo LLC. Before that deal was announced on Dec. 19, Winn-Dixie’s shares were down 24 percent for the year. But after Bi-Lo agreed to buy the shares for $9.50 each, the stock jumped 70 percent in one day and it gave investors a net gain of about 30 percent for all of 2011.
Dividends help Rayonier’s stock
People always study the stock prices to determine how well a company is doing. But don’t forget about dividends.
Rayonier’s stock price rose 24 percent during the year but when you add in its $1.52 in cash dividends (adjusted for a stock split), investors saw a 30 percent total return on their investment in 2011.
Then there’s Regency Centers Corp., whose stock price fell by 11 percent. But the shopping center developer paid out $1.85 in cash dividends.
So who was better off, the investor who made an 80 percent gain on paper on a stock that doesn’t pay dividends or the one who received actual cash?
Trailer Bridge at the bottom
Not surprisingly, Trailer Bridge Inc. had the worst performance among Jacksonville companies as the marine and truck freight company filed for Chapter 11 bankruptcy reorganization. That caused the stock to lose almost all of its value.
The good news for Trailer Bridge shareholders is that its attorneys have said in court that they hope the reorganization plan will provide some recovery for stockholders. That doesn’t always happen in a Chapter 11 case involving a public company.
Atlantic Coast Financial Corp. was near the bottom with a decline of 80 percent during the year. The parent company of Atlantic Coast Bank said recently that it is “exploring strategic alternatives,” including finding a possible merger partner.
Fidelity selling personal lines business
Fidelity National Financial Inc. last week announced an agreement to sell 85 percent of its personal lines insurance business to WT Holdings Inc. for about $119 million.
Jacksonville-based Fidelity is mainly a title insurance company and has been looking to sell off its other insurance businesses. Earlier this year, it sold its flood insurance business for $219.5 million.
Fidelity said it expects to record a $15 million pre-tax loss on the sale of the personal lines business, which is expected late in the first quarter or early in the second quarter this year.
Fidelity Chairman Bill Foley said in a news release that the sale makes strategic sense.
“The personal lines business carries higher earnings volatility than we are comfortable maintaining and we believe we can redeploy this capital into other uses that will generate higher returns and greater value for our shareholders,” he said.
Stein Mart revises third-quarter loss
Stein Mart Inc. reported its revised third-quarter results just before Christmas, showing that the fashion retailer ended with a net loss of $3.1 million, or 7 cents per diluted share.
The company had originally reported a net loss of $1.8 million, or 4 cents a share, for the quarter that ended Oct. 29. But Stein Mart said an information technology error resulted in the company understating the financial impact of markdowns in the quarter. So it had to revise its results.
Stein Mart also filed its third-quarter report with the Securities and Exchange Commission, which resolves issues it had with Nasdaq. Stein Mart had said it could be delisted from Nasdaq if it didn’t file the report by mid-February.
Fortress CEO takes leave
Fortress Investment Group CEO Daniel Mudd is taking a leave of absence while he fights securities fraud charges from the SEC related to his tenure as CEO of the Federal National Mortgage Association (Fannie Mae).
New York-based Fortress is a publicly traded investment company that, through funds it manages, owns Jacksonville-based Florida East Coast Railway Corp. It also owns 56 percent of another Jacksonville-based railroad operator, RailAmerica Inc.
Mudd and five other top executives of Fannie Mae and the Federal Home Loan Mortgage Corp. (Freddie Mac) were charged by the SEC on Dec. 16 for their role in the nationwide subprime mortgage mess.
Fortress’ announcement of Mudd’s leave did not mention that SEC lawsuit, but a statement by Mudd said he needs the leave “to ensure that any time or attention I need to focus on matters outside of Fortress will not affect the business or operations of the company.”
Fortress co-founder Randal Nardone was named interim CEO to replace Mudd, who had been with Fortress since August 2009.
More bad news for Berkowitz
Ever since Bruce Berkowitz took a more active role in the management of The St. Joe Co. about a year ago, the bad news has been piling on for the former star investment manager.
The latest was Sears Holding Corp.’s announcement last week that it is closing up to 120 Sears and Kmart stores because of disappointing sales.
After that announcement, the Wall Street Journal pointed out on its website that Berkowitz is one of Sears’ largest shareholders. According to Sears’ most recent proxy statement, Berkowitz’s Fairholme Funds Inc. owned 13.7 percent of the company’s stock.
“Sure, fund manager Bruce Berkowitz has been harangued for his less-than-stellar investments in Bank of America and real estate company St. Joe. But there’s another stinker packed into his stock portfolio this year,” the Wall Street Journal story said about his investment in Sears.
Bloomberg News estimated that Fairholme lost $203 million in its investment in Sears on Tuesday alone, the day of the store-closing announcement.
Berkowitz is chairman of St. Joe and his investment company owns 29 percent of St. Joe’s stock.
2011 local stock performance
This chart shows the 2011 total return through Christmas weekend for the 22 publicly traded companies headquartered in Jacksonville that trade regularly in the national markets. Total return is the increase or decrease in stock price, plus cash dividends paid during the year.
| Company | Total return |
| Atlantic Coast Financial | -80% |
| Body Central | 68% |
| CSX | 3% |
| Fidelity National Financial | 21% |
| Fidelity National Information | -2% |
| Fortegra Financial | -39% |
| Global Axcess | 2% |
| Interline Brands | -30% |
| International Baler | 80% |
| Jacksonville Bancorp | -59% |
| Landstar System | 18% |
| Lender Processing Services | -47% |
| ParkerVision | 80% |
| Patriot Transportation | -29% |
| PSS World Medical | 8% |
| RailAmerica | 12% |
| Rayonier | 30% |
| Regency Centers | -6% |
| Stein Mart | -26% |
| Trailer Bridge | -97% |
| Web.com Group | 38% |
| Winn-Dixie Stores | 31% |