U.S. stock markets overcame a massive collapse at the onset of the COVID-19 pandemic to reach record highs at the end of 2020.
The Dow Jones Industrial Average fell 36.8% from Feb. 14 to March 20 as government mandated shelter-in-place orders intended to slow the spread of the coronavirus, including Gov. Tony Evers’ “Safer at Home” order, had a devastating effect on the economy.
But the stock market recovered from that plunge as economic activity bounced back during the rest of the year, albeit not to pre-pandemic levels. The Dow Jones Industrial Average ended the year up 7.3%, the S&P 500 ended the year up 16.3% and the Nasdaq index ended the year up 43.6%, the best year for the Nasdaq since 2009. The Dow and S&P ended the year at record highs and Nasdaq achieved its record high just before year’s end.
Locally, results were mixed and a majority of the publicly-held companies in southeastern Wisconsin saw their stock prices decline in 2020.
As it was in 2019, Waukesha-based generator manufacturer Generac Holdings Inc. was the top local stock price gainer in southeastern Wisconsin in 2020, with its stock price rising 126% to $227.37. If an investor purchased $100,000 in Generac stock at the beginning of 2019, that investment would have been worth $457,384 two years later at the end of 2020.
Generac’s profits rose 24% and its sales rose 7% for the first three quarters of 2020, compared to the same period in 2019, according to its most recent quarterly report.
The company was ranked 946th on the 2020 Fortune 1000 list with annual revenue of about $2.2 billion, up from a ranking of 979 in 2010.
“Power outage activity was much higher during the (third) quarter, driven by more extreme and severe weather,” said Aaron Jagdfeld, chairman and chief executive officer of Generac, during the company’s third quarter earnings call. “When combined with the ‘home as a sanctuary’ trend that we began seeing at the onset of the COVID-19 pandemic, demand for home standby generators reached unprecedented levels during the quarter.”
Jagdfeld said Generac was getting 2.5 times the number of orders it did for home standby generators in 2019 and the company’s backlog continued to grow early in the fourth quarter, even as its factories hit record output levels.
The backlog increase led Generac to add capacity at its Jefferson, Wisconsin plant in addition to running overtime at the Whitewater plant where most of the home standby products are made. Earlier in the year the company announced plans to hire hundreds of additional employees.
Generac also plans to build a new production facility, but it probably will not be located in Wisconsin, where the company already has facilities in Waukesha, Whitewater, Eagle, Jefferson and Oshkosh.
Generac also grew by acquisition in 2020, acquiring the assets of Ohio-based commercial turf care manufacturer Mean Green Products LLC and Denver-based Enbala Power Networks Inc. to expand its technology offerings.
While Generac’s impressive growth continues and it increasingly becomes one of the region’s most important companies, one of Milwaukee’s industrial icons hit rock bottom in 2020. Wauwatosa-based Briggs & Stratton Corp. filed for bankruptcy in July. The company’s stock price fell 97%, from $6.66 at the end of 2019 to nearly zero in 2020.
Briggs entered bankruptcy with $1.59 billion in assets and around $1.35 billion in debts.
However, brighter days could be ahead. The company was sold out of bankruptcy to New York-based private equity firm KPS Capital Partners, which acquired most of Briggs’ assets for $550 million.
Steve Andrews, the new CEO of the company now known as Briggs & Stratton LLC, said the company is committed to the Milwaukee area and plans to add to its local workforce. This fall the company said it was seeking to fill 100 salary and hourly positions in the Milwaukee area.
“We’re now a well-capitalized company, unencumbered by past liabilities, so we can focus on growth,” Andrews said in a press release.
The second biggest local stock price decliner in 2020 was Milwaukee-based Marcus Corp., a hotel and movie theater company that was devastated by the COVID-19 pandemic. Its movie theaters were shut down for months due to the pandemic. Most of its theaters were reopened in August, but then several were temporarily closed again in October due to a lack of new film releases.
The company also temporarily closed its hotels and resorts in 2020. All of its hotels and resorts were later reopened, the last being Saint Kate – The Arts Hotel in Milwaukee, in November.
In its third quarter earnings report, Marcus Corp. reported an operating loss of $123.2 million for the first three quarters of 2020 and a net loss attributable to the company of $85.8 million for the first three quarters of the year.
“These are challenging times, yet we expect both of our businesses will begin returning to more normal conditions once the pandemic is under control,” said Greg Marcus, president and CEO of The Marcus Corp.