The Dow Jones industrial average reached a record high Tuesday, four years to the day after it dropped to its recession-related trough.
With the bellwether index showing a 120 percent gain over that four-year period, it seemed like a good time to check how Jacksonville companies have fared during the market's run. If you had the foresight to buy up these stocks on March 5, 2009, you've done pretty well for yourself – as long as you didn't invest in local banks.
Nine of the 15 Jacksonville-based companies that have been publicly traded throughout the four-year period have more than doubled in price, and two others have risen by more than 60 percent.
That doesn't even count dividend payments that have increased returns for shareholders of companies such as CSX Corp. and Rayonier Inc., which both more than tripled in price.
The two biggest increases over four years came from Stein Mart Inc., up 751 percent, and Web.com Group Inc., up 571 percent. In both cases, the big gains occurred because the stocks had fallen to ridiculously low prices in early 2009. Stein Mart was trading near $1 and Web.com was at $2.59.
Unfortunately, the one group that hasn't shared in the wealth has been the bank stocks. The two publicly traded community banks headquartered in Jacksonville both have declined over the past four years as they struggled with bad loans and the need to raise more capital.
Atlantic Coast Financial Corp. was down 61 percent in the four-year period, even after the stock price was lifted by a merger agreement last month, and Jacksonville Bancorp Inc. dropped by 78 percent.
Lender Processing Services Inc. isn't a bank, but it's related to the industry because its business is providing services to mortgage lenders. With continued negative publicity due to its ties to the nationwide foreclosure mess, LPS was down 6 percent over four years.
There is some good news in the banking industry. After waiting 18 months for market conditions to improve enough to go ahead with an initial public offering, EverBank Financial Corp. was finally able to hit the market in May 2012 and has been rising ever since. The stock, which went public at $10 a share, reached a new high of $17.29 last week.
Atlantic Coast Financial reports loss
Atlantic Coast Financial last week reported a net loss of $6.7 million, or $2.67 a share, for 2012. The loss is not a surprise because its banking subsidiary, Atlantic Coast Bank, reported a loss of $6.4 million in filings with federal banking regulators.
Atlantic Coast said it entered into a consent order with regulators to achieve a ratio of core capital to assets of 9 percent, but the capital ratio was only 5.13 percent as of Dec. 31.
The company said its proposed merger into Bond Street Holdings Inc. will allow the bank to meet its capital requirements. Bond Street agreed last month to buy Atlantic Coast for up to $5 a share.
Stein Mart still not current with financial reports
While Stein Mart has produced a big stock return over the past four years, the stock likely has been held back a bit in recent months because the company is delinquent in its financial reports. Stein Mart still has not filed its required reports with the Securities and Exchange Commission for the second and third quarters of 2012 and has said it expects to restate results dating back to 2009 because of accounting issues.
Stein Mart was facing a March 5 deadline to file those reports or possibly lose its stock listing on Nasdaq, but the company said in a news release Thursday that the restatements were not ready "due to the need to test and audit prior results, as well as evaluate control implications related to the restatement."
The company is requesting a hearing with Nasdaq to stay the delisting of its stock.
The fashion retailer also announced Thursday that total sales for the four weeks ended March 2 rose 5.6 percent to $85.2 million and comparable-store sales rose 0.6 percent.
Comparable-store sales measure sales at stores open for more than one year.
Interim CEO Jay Stein said in a news release that February sales were affected by bad weather in certain regions and by a change in its normal 12-hour sale.
"While sales were down early in the month due to our replacing the February 12-hour event with a much smaller promotion, they were good overall," Stein said.
CSX off to slow start
CSX Corp.'s freight traffic is off to a slightly disappointing start this year, Chief Financial Officer Fredrik Eliasson told investors at a conference held by J.P. Morgan.
Eliasson reported that "overall volumes are 1 percent below CSX internal expectations for the first quarter," J.P. Morgan analyst Thomas Wadewitz said in a research note after the conference. However, the company still expects an overall increase in volume this year.
Coal traffic continues to be lower. Export coal volume is down 6 percent year-to-date and domestic coal volume is down by 14 percent, Wadewitz said.
Short-line railroad operator Genesee & Wyoming Inc. also made a presentation at the conference and reported that its acquisition of Jacksonville-based RailAmerica Inc. is progressing ahead of schedule, Wadewitz said.
Genesee had expected to achieve $36 million in annual cost savings in the first 18 months after it completed the deal in December, but now it expects to be realizing those cost savings by the end of the second quarter, he said.
Warburg selling remaining FIS shares
Warburg Pincus LLC, formerly the largest shareholder of Fidelity National Information Services Inc., is selling its remaining shares in the Jacksonville-based company.
Fidelity, better known as FIS, said last week that Warburg will sell its remaining 19.3 million shares in a public offering. Those shares constitute 6.6 percent of FIS' total shares outstanding.
Warburg had owned 14.2 percent of FIS last spring, according to the company's annual proxy statement. FIS bought back $200 million in stock from Warburg in December as part of its ongoing share repurchase program.
In February, Warburg distributed another 8.1 million shares of FIS stock to its partners, according to an SEC filing.
Warburg was a stockholder of Metavante Technologies Inc. and became an FIS shareholder when FIS bought Metavante in 2009.
Robert W. Baird analyst David Koning said in a research note that Warburg has profited from the investment.
"We believe Warburg's exit reflects the successful performance of its investment," he said.
FIS' stock fell 88 cents to $37.53 Thursday after the announcement, but Koning said any drop in price from the Warburg stock sale creates a buying opportunity for investors.
"Longer term, we think the sales should be a mild positive, as the private equity overhang is gone," he said.
It's a good thing the company legally named Fidelity National Information Services goes by the name FIS because with Warburg selling off its stake, the company's largest shareholder now is Fidelity Investments, according to SEC filings.
Fidelity Investments, which is no relation to FIS, said in a filing last month that it owns 7.6 percent of FIS.
If it's not confusing enough that Fidelity Investments is the largest shareholder of FIS, recall that FIS was spun off from Fidelity National Financial Inc., which also is not related to Fidelity Investments.
Investor buys shares in Dick's Wings parent
American Restaurant Concepts Inc., the Jacksonville-based franchisor of the Dick's Wings restaurant chain, announced last week that investor Seenu Kasturi has acquired more than 6.8 percent of its stock.
Kasturi had planned to buy 41.7 percent of the stock last year from CEO Michael Rosenberger, but the company said contractual restrictions in certain franchising agreements prevented Kasturi from owning more than 10 percent of the shares.
Rosenberger instead sold the 41.7 percent stake to another investor, William Leopold, who had worked with Kasturi in the past.
"I'm a big believer in how American Restaurant Concepts is positioning itself in the fast growing casual restaurant operations and management market. My personal investment is proof of this belief," Kasturi said in the company's news release.
Dick's Wings currently has 16 full-service restaurants and two express restaurants.
Coach stock drop fuels takeover talk
Coach Inc.'s stock has dropped from nearly $80 last spring to below $50 in recent weeks after disappointing earnings. The low stock price is fueling takeover speculation for the handbag and fashion accessories company, which has a major distribution center in Jacksonville.
However, Sterne Agee analyst Ike Boruchow thinks the stock will rebound without takeover talk. He initiated coverage of Coach last week with a "buy" rating.
"Despite a near-term slowdown in the U.S. operations, we believe the company still has significant global growth potential driven by category growth in the U.S., as well as market share opportunities in Asia-Pacific," Boruchow said in his report.
"While we don't expect a turn in the fundamentals to occur by next quarter, we feel a 2.5 percent dividend and 8 percent free cash flow yield should support shares while we wait for a turn in the fourth quarter and first quarter (2014)," he said.
Shoe Carnival sees lower-than-expected earnings
Shoe Carnival Inc. last week said it expects to report adjusted earnings of 16 cents a share for the fourth quarter ended Feb. 2, unchanged from last year and lower than its previous forecast of 20 cents to 22 cents.
Total sales for the fourth quarter rose 13.1 percent to $205.7 million and comparable-store sales rose 0.5 percent.
CEO Cliff Sifford said in a news release that sales of athletic footwear were below expectations, "which we believe was a result of colder weather and, more importantly, the delay in income tax refunds."
Former Jacksonville Jaguars owner Wayne Weaver is chairman of Shoe Carnival and the largest shareholder with 24.5 percent of the stock.