Alabama Stocks Move Ahead in Volatile Markets
A recap of the 2010-2011 market shows Alabama companies repeatedly moving one step forward, one step back, ending up ahead—but not as far ahead as the national average.
Editor's Note: Stock price comparisons are for the 12-month period ending May 31, 2011. Other year-to-year performance figures refer to companies' most recent annual reports—comparing fiscal 2010 and 2009 figures, as tabulated in the tables beginning on page 17.
It was a see-saw for Alabama publicly-traded companies this year, as local stocks worked hard to maintain an upward trajectory. Volatility still marked stocks, as it did last year, but this year was more pronounced, with gains one month swinging to losses the next month and back again. All told, there were six months of gains and six of losses for Alabama companies. As our year-over-year index closed on May 31, Alabama stocks added 99.26 points, or 11.69 percent, beginning at 848.95 and closing out at 948.21. Advancing issues outpaced declining issues at a count of 13-to-8. The gains in both Alabama stocks and in the Comprehensive Index were less than the national markets, whose gains for the year were about 25 percent.
Pressures on Wall Street were similar to last year, but the weakness of the recovery preyed on consumer confidence. Beginning in December and through the first four months of 2011, investors jumped into markets and parlayed even modest economic news into bullish sentiment. First quarter earnings surpassed the expectations of many on Wall Street, sending stocks ahead consistently. Other indications of economic health—labor, consumer confidence and housing—remained sluggish. Oil prices went on a tear, further slowing recovery. News around the globe added to national volatility, with the earthquake in Japan, trouble in the Middle East, and ongoing debt concerns in Europe throwing markets into uncertainty. Even so, business spending and global economies expanded. Despite an upward trend on Wall Street, May sent all those positive intentions crashing to earth as it tallied the first negative month for the S&P 500 since August 2010. “Economic data has been patchy,” said Mike Ryan, New York-based chief investment strategist for Wealth Management Americas at UBS Financial Services Inc., in a note to investors. “The apparently much more mixed picture represents mostly a transitory headwind. It remains our view that equity markets will outperform over the balance of the year given a still solid earnings outlook, undemanding valuations and continued accommodative policy conditions.”
Computer Programs & Systems was the top dollar performer in the Alabama Index this year, with stellar gains throughout the year in its earnings and revenues. For the last quarter in 2010, earnings rose 85.3 percent. CPSI stock continued climbing this year, and kept hitting new 52-week highs in March. Its trajectory fell off somewhat in April, despite an 84 percent increase in net income for its quarter ended March 31— an increase that topped analysts’ estimates. For the year ended Dec. 31, 2010, revenues were $153.2 million, compared to $127.7 million last year, and net income was $18.7 million, or $1.71 per share, versus last year’s net income of $15.1 million, or $1.39 per share. CPSI started the year at 43.01, and ended at 62.75, a gain of 19.74 points, or 45.90 percent.
Energen also enjoyed a powerful year, adding 18 points, or 40.66 percent, and closing at 62.27. Energen was a top gainer in June 2010, January and February, with strong earnings and a boost in ratings from several companies. In January, EGN upped its guidance for 2011, citing higher sales prices and a 6 percent year-over-year production increase. For the year ended Dec. 31, Energen reported operating revenues of $1.6 billion and net income of $2.9 million, or $4.04 per share, from operating revenue of $1.4 billion and net income of $2.6 million, or $3.57 per share last year.
The poor fortunes of the housing and construction industries weighed on Vulcan Materials this year, sending its stock down 9.99 points, or 19.79 percent. In August 2010, VMC said it swung to a loss for its second quarter, though revenues were up. Moody’s downgraded Vulcan then and warned of further downgrades. For the year ended Dec. 31, Vulcan lost $79.4 million, or $0.75 per share, from net income of $21.3 million, or $0.16 per share a year ago. Revenue was down, to $2.56 billion, compared to revenue of $2.69 billion last year. Vulcan spent seven months in negative terrain, with its strongest decreases in June and August 2010. Vulcan began the year at 50.48 and closed at 40.49. VMC was the top dollar loser.
Hibbett Sporting Goods started the year at 25.77 points and closed at 41.64. HIBB was a top gainer in November and May on the strength of its earnings results. Hibbett’s third quarter in 2010 posted a 43 percent increase in net income from the year previous and bested the consensus average from analysts by $0.08 per share. HIBB posted a 23 percent increase in the first quarter of 2011 and beat Wall Street’s expectations by $0.07 per share. For the fiscal year ended January 29, 2011, Hibbett reported sales of $230 million versus last year’s $196 million, with net income of $46.4 million, or $1.60 per share, compared to last year’s net income of $32.5 million, or $1.12 per share. Hibbett ended this year-long trading session by new expansions and store openings, and by closing underperforming stores. HIBB rose 15.87 points, or 61.58 percent—the top percentage gainer this year.
It was a tough year for banks, and this was reflected in the Alabama Index. The index lost Superior Bancorp to FDIC receivership in April, and United Security Bancshares struggled throughout the year. For the year ended December 31, USBI posted net income of $1.9 million, or $0.34 per share, compared with net income of $4.59 million, or $0.79 in 2009. Interest income fell to $44.8 million, versus last year’s $47.5 million. United Security closed the session down 7.19 points, or 51.07 percent, and was the top percentage loser in both the Alabama Index and the Comprehensive Index. USBI ended at 6.89.