Mirroring the rise of the broader stock market, the BizTimes Stock Index soared to an all-time high of 200.4 points on June 1. The BizTimes Stock Index was created by Small Business Times and is monitored by North Shore Bank. The index, which measures the stock values of publicly held companies based in southeastern Wisconsin, is updated daily and can be viewed at www.biztimes.com.
Eight of the 10 top-performing local stocks in the first five months of the year were manufacturers: Twin Disc Inc.; Bucyrus International Inc.; Johnson Controls Inc.; Briggs & Stratton Corp.; Joy Global Inc.; Criticare Systems Inc.; Ladish Co.; and Actuant Corp.
Racine-based Twin Disc posted the largest gain, as its stock rose 94.34 percent to trade at $68.99 on June 1.
Twin Disc designs, manufactures and sells marine and heavy duty off-highway power transmission equipment, primarily in the United States. Its products include marine transmissions, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company sells its products to customers primarily in the pleasure craft, commercial, and military marine markets, as well as in the energy and natural resources, government, and industrial markets through direct sales force and distributor network worldwide.
The other stocks in the local top 10 list through June 1 were Midwest Air Group Inc., which saw a bump because of a hostile takeover bid by AirTran Holdings Inc., and Manpower Inc.
Going forward, investment advisor Michael Sadoff of Sadoff Investment Management LLC in Milwaukee, expects continued strong performances from technology and manufacturing stocks.
“I think there are two (sectors) that jump out at us. One would be a portion of the technology sector, which for us is major, because we didn’t own it back in the late 90s. It didn’t make sense to us. The P.E. (price/earnings) ratios were outrageous. We like to buy stocks that have underperformed for five, 10, 20 years and are breaking out of down trends, so these were just straight up. But we didn’t own them on the down side, either. Now, we’re about seven years after the (tech) bust, and we’re seeing a lot of the trends that we like. Now, the most we’ll allocate of any client’s funds is 20 percent to any one sector, so we’re basically maxed out in companies like Cisco, VeriSign and Juniper. These companies are growing at a nice clip and not outrageously valued,” Sadoff said.
“Another group would be kind of the industrial/machinery group. For instance, Cummins is a stock we own. We don’t own some of the local manufacturers, but they’ve been doing very well, and that seems like a trend that will continue in the second half of the year.”
Bruce Bittles, chief investment strategist for Milwaukee-based Robert W. Baird & Co. Inc., which provided the statistical analysis of the stocks in the BizTimes Stock Index, also is bullish about the tech sector in the second half of the year.
“Investors underweighted in equities should concentrate efforts in the health care, consumer staples and information technology sectors. The combination of rising rates and a potential slowdown in earnings by the fourth quarter could benefit areas that have a high degree of earnings visibility. The information technology sector could also outperform as investors move into areas related to capital spending versus consumer spending,” Bittles said.
Eight local stocks posted negative returns for the year through June 1: Bank Mutual Corp.; Badger Meter Inc.; Wauwatosa Holdings Inc.; Modine Manufacturing Co.; Marcus Corp.; MagneTek Inc.; Harley-Davidson Inc.; and Koss Corp.
