Gardner Denver, REV Group IPOs off to good start

Mid-year Economic Forecast

Former Bucyrus International Inc. chief executive officer Tim Sullivan left the company after it was acquired by Caterpillar Inc. in 2011. Since then, Sullivan has become CEO of two other large manufacturing firms and moved their headquarters to Milwaukee. First, Gardner Denver Inc. moved its headquarters from the Philadelphia area to Milwaukee in 2014 and then REV Group Inc. moved its headquarters from Orlando to Milwaukee in 2016.

The two companies both went public this year, and their stock performance got off to a strong start. REV Group’s IPO was in January, and its stock price rose 26 percent by June 30. Gardner Denver’s IPO was in May, and its stock price rose 8 percent by June 30.

REV Group and Gardner Denver were two of several area manufacturers that saw their stock prices rise during the first half of the year. The stock prices for Johnson Outdoors Inc., Rockwell Automation Inc., A.O. Smith Corp., Rexnord Corp., Modine Manufacturing Co., Twin Disc Inc., Briggs & Stratton Corp. and Badger Meter Inc. all rose between 8 and 21 percent during the first six months of the year.

During the first half of the year, the Dow Jones Industrial Average was up 9.35 percent, the S&P 500 Index was up 9.34 percent and the Nasdaq Stock Market was up 14.7 percent. But local stock performance varied widely, said Katherine Schoen, manager of private wealth management equity and fixed income research for Robert W. Baird & Co. Inc.

“For the first half of this year, there’s a lot of deviation throughout that list (of area publicly traded companies),” she said.

Larger companies generally had stronger stock performances than smaller companies during the first half of the year, Schoen said. Stocks for large technology companies in particular performed well.

In addition to REV Group, the top performing local stocks were Milwaukee-based ARI Network Services Inc., up 30 percent to $7.05 and Milwaukee-based ManpowerGroup Inc., up 26 percent to $111.65.

ARI last month agreed to be acquired by San Francisco-based private equity firm True Wind Capital for about $140 million.

ManpowerGroup, which this year ranked 146th on the Fortune 500, reported a 3.8 percent profit increase in the first quarter of this year and a 5.7 percent profit increase in the fourth quarter of 2016.

Two of the worst-performing local stocks were large retailers: Menomonee Falls-based Kohl’s Corp. and The Bon-Ton Stores Inc., the parent company of Boston Store, with dual headquarters in Milwaukee and York, Pennsylvania. Kohl’s stock fell 22 percent, to $38.67, during the first half of the year. Bon-Ton’s stock fell 70 percent, to 44 cents per share, during the first half of the year.

Like many brick-and-mortar retailers, Kohl’s and Bon-Ton are facing major challenges from online retailers, especially Amazon.com. During the first half of the year, several major retail chains announced plans to close stores.

Many retailers have too many stores and need to adjust to a new environment in which consumers do less shopping in person and more online, Schoen said.

“Obviously (America was) over-retailed,” she said. “It’s a shifting dynamic in how people prefer to spend their money.”

Bon-Ton has not turned an annual profit since 2010. This spring, S&P Global Market Intelligence named Bon-Ton one of 10 retail companies most at risk to file for bankruptcy. Kathryn Bufano, who became the company’s president and chief executive officer in 2014, will leave Bon-Ton when her contract expires in late August.

Cudahy-based Roadrunner Transportation Systems Inc. saw its stock price fall 30 percent, to $7.27, during the first half of the year. In January, the company announced it had discovered accounting errors involving unrecorded expenses at two subsidiaries that could result in $25 million in adjustments to its results and at least a $200 million goodwill impairment charge. Former chief financial officer Peter Armbruster, who had been with the company since 2005, was terminated at the end of March. Mark DiBlasi, who had been CEO since 2006, was removed from his role. A new CEO and CFO were named. Roadrunner also said it will shift its headquarters to Downers Grove, Illinois. About 185 jobs will remain in Cudahy.

Brookfield-based Connecture Inc.’s stock fell 63 percent, to 62 cents per share, during the first half of the year. The health insurance marketplace software developer on May 4 received a deficiency notice from Nasdaq indicating it has not met the required $15 million minimum market value of publicly held shares for the past 30 consecutive business days. Per Nasdaq rules, Connecture has until Oct. 31 to bring its market value into compliance with this rule, or its stock will be delisted. A report from mergers and acquisitions intelligence site Mergermarket indicated Connecture was facing shareholder pushback and should consider selling the company. The company reported a net loss of $3.7 million in the first quarter, compared with a net loss of $7.3 million in the first quarter of 2016.


BizTimes Stock Index

2017 mid-year performance

Ticker

 Company Name

      12/31/16
price

      6/30/17
price

%

   Change 

ARIS

ARI Network Services Inc.

$5.41

$7.05

30%

REVG

REV Group Inc.

22*

27.68

26%

MAN

ManpowerGroup Inc.

88.87

111.65

26%

JOUT

Johnson Outdoors Inc.

39.69

48.21

21%

ROK

Rockwell Automation Inc.

134.40

161.96

21%

AOS

A. O. Smith Corp.

47.35

56.33

19%

RXN

Rexnord Corp.

19.59

23.25

19%

FISV

Fiserv Inc.

106.28

122.34

15%

MOD

Modine Manufacturing Co.

14.90

16.55

11%

TWIN

Twin Disc Inc.

14.60

16.14

11%

MTG

MGIC Investment Corp.

10.19

11.20

10%

BGG

Briggs & Stratton Corp.

22.26

24.10

8%

GDI

Gardner Denver Inc.

20**

21.61

8%

BMI

Badger Meter Inc.

36.95

39.85

8%

DOC

Physicians Realty Trust

18.96

20.14

6%

JCI

Johnson Controls Inc.

41.19

43.36

5%

WEC

WEC Energy Group Inc.

58.65

61.38

5%

APAM

Artisan Partners Asset Management Inc.

29.75

30.70

3%

SXT

Sensient Technologies Corp.

78.58

80.53

2%

WSBF

Waterstone Financial Inc.

18.40

18.85

2%

ASB

Associated Banc-Corp

24.70

25.20

2%

WBB

Westbury Bancorp Inc.

20.70

20.85

1%

PLOW

Douglas Dynamics Inc.

33.65

32.90

-2%

BKMU

Bank Mutual Corp.

9.45

9.15

-3%

MCS

Marcus Corp.

31.50

30.20

-4%

ATU

Actuant Corp.

25.95

24.60

-5%

HOG

Harley-Davidson Inc.

58.34

54.02

-7%

SNA

Snap-on Inc.

171.27

158.00

-8%

BRC

Brady Corp.

37.55

33.90

-10%

WEYS

Weyco Group Inc.

31.30

27.88

-11%

GNRC

Generac Holdings Inc.

40.74

36.13

-11%

STRT

Strattec Security Corp.

40.30

35.40

-12%

QUAD

Quad/Graphics Inc.

26.88

22.92

-15%

KOSS

Koss Corp.

2.28

1.81

-21%

KSS

Kohl’s Corp.

49.38

38.67

-22%

JASN

Jason Industries Inc.

1.80

1.29

-28%

RRTS

Roadrunner Transportation Systems Inc.

10.39

7.27

-30%

ESNC

EnSync Inc.

0.72

0.37

-49%

CNXR

Connecture Inc.

1.68

0.62

-63%

BONT

The Bon-Ton Stores Inc.

1.47

0.44

-70%

*REVG IPO-ed on 1/27/17 at a price of $22.

**GDI IPO-ed on 5/12/17 at a price of $20.

All data taken from Factset Research Systems. This information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy.

Research compiled by Robert W. Baird & Co. Inc.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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