Small Business Times took a snapshot of the stock values for 37 publicly held companies based in its readership area, which includes Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, Sheboygan and Walworth counties.
Of the 37 local stocks, 19 have posted year-to-date gains in stock prices, and 18 have lost share value.
The most notable local winner is Cobalt Corp., which also ranks among the top 20 US stocks for companies with a minimum market capitalization of $25 million and a minimum stock price of $5.
The stock for Milwaukee-based Cobalt, the Blue Cross & Blue Shield health insurance licensee for Wisconsin, posted a year-to-date gain of 174%, as of Sept. 11.
Cobalt stock rose from $6.57 per share on Sept. 11, 2001, to $18.10 on Aug. 29.
Craig Kennison, senior analyst for Robert W. Baird & Co., Milwaukee, cited several reasons for Cobalt’s glowing performance:
"The conditions of the industry itself have improved," said Kennison, who quickly acknowledged that Baird has vested interests in Cobalt. "Cobalt has passed along its cost increases to the customers.
"Cobalt has outperformed the industry. They’ve taken what looked like a bleak situation and turned it into a very good company," Kennison said.
Cobalt also may be in an enviable market position, in that it is one of just three publicly held companies in the Blue Cross & Blue Shield network of 43 companies.
That could make Cobalt a takeover target of WellPoint Health Networks of Thousand Oaks, Calif., and Anthem, Inc. of Indianapolis, Ind., which have been buying up the publicly traded Blues affiliates, Kennison said.
However, Kennison believes Cobalt will continue to remain independent and grow its profit margins.
Of course, Cobalt has had some hiccups along the way. The company announced Aug. 7 it would withdraw a proposed secondary offering of common stock, due to unfavorable market conditions.
"In light of the current market conditions, we do not believe this offering would serve the best interests of our shareholders," Cobalt chairman and chief executive officer Thomas Hefty said in a prepared statement. "We remain committed to our disciplined strategy for creating shareholder value and will continue to fund our current business growth out of Cobalt’s existing balance sheet, strong internal cash flow and the new $30 million credit facility we recently established."
In addition to Cobalt, other southeastern Wisconsin-based companies posting double-digit year-to-date gains in their stock prices include: A.O. Smith Corp. (55%); Strattec Security Corp. (48%); Johnson Outdoors Inc. (48%); Badger Meter Inc. (45%); Weyco Group Inc. (44%); State Financial Services Corp. (26%); Koss Corp. (15%); Actuant Corp. (13%); Wisconsin Energy Corp. (13%); and Sensient Technologies Corp. (12%).
The local companies that have endured double-digit losses in their stock prices include: Midwest Express Holdings Inc. (-55%); Oilgear Co.
(-51%); Catalyst International Inc.
(-40%); Alterra Healthcare Corp.
(-36%); Joy Global Inc. (-34%); Gehl Co. (-31%); Criticare Systems Inc.
(-29%); Snap-on Inc. (-24%); Fresh Brands Inc. (-23%); Ladish Co. Inc.
(-23%); Merge Technologies Inc.
(-19%); and Fiserv Inc. (-18%).
Midwest Express Holdings, the Oak Creek-based parent company of Midwest Express Airlines, has been clipped by the downdraft in the airline industry, the overall slow economy and a threatened strike by its flight attendants.
Midwest Express announced Sept. 12 it would cut 200 to 250 jobs and eliminate several flights. The company also stated it will report a third-quarter loss of about $14 million.
Although the airline industry crisis is bringing some large carriers to the brink of bankruptcy, Kennison believes Midwest Express will weather the storm.
"We think the future, in the long run, for Midwest Express is bright. They have a very enviable niche," Kennison said. "We think the industry is going to rebound at some point, and Midwest Express’ stock will do the same."
The turmoil is likely to result in some consolidation within the airline industry, leaving the stronger players to survive, according to Bruce Bittles, chief equity strategist for Baird.
Sept. 27, 2002 Small Business Times, Milwaukee
