Newcomers among top local stocks

Two manufacturing firms that moved their corporate headquarters to Milwaukee within the past four years went public in 2017, and their stocks were some of the top local gainers for the year.

Gardner Denver Holdings Inc. had its initial public offering in May, at $20 a share, and its stock price rose 70 percent by the end of the year to finish at $33.93.

REV Group Inc. had its IPO in January at $22 a share, and the stock rose 48 percent in 2017 to finish at $32.53.

Stock market investors enjoyed healthy gains in 2017. The Dow Jones Industrial Average rose 25 percent, the Nasdaq rose 28 percent and the S&P 500 rose 19 percent in 2017. There was little stock market volatility during the year as a healthy economy and strong corporate earnings helped drive share prices upward, said Katherine Schoen, manager of private wealth management equity and fixed income research for Milwaukee-based Robert W. Baird & Co. Inc. Pro-business deregulatory polices from President Donald Trump also boosted investor sentiment during the year, she said.

“It was a strong year for the market,” Schoen said.

The technology sector led the market, she said. The metro Milwaukee area lacks a large tech exposure, so that limited the area’s opportunity to outperform the market in 2017.

Still, stock prices for companies based in southeastern Wisconsin largely followed the gains enjoyed by the market as a whole. By a two-to-one margin, local gainers outnumbered local decliners.

Gardner Denver and REV Group were two of the four best local stocks in 2017. Gardner Denver was the second-biggest local gainer, topped only by Racine-based Twin Disc Inc., which saw its stock price rise 82 percent in 2017 to $26.57.

In 2017, Twin Disc bounced back from tough years in 2015 and 2016, Schoen said. The company reported a net loss of $6.1 million in 2017, but that was an improvement from a net loss of $13 million in 2016. Twin Disc reported fourth quarter profit of $1.2 million, compared to a loss of $5.5 million in the fourth quarter of 2016. The company’s operating income for the fourth quarter was $2.4 million, compared to an operating loss of $9.8 million in the fourth quarter of 2016.

Twin Disc began a series of restructuring moves in late 2015 that continued in 2016 and 2017, including the closure of a plant in India. The moves are expected to save the company $4.5 million a year.

The third-best local stock in 2017 was from another Racine-based company, Johnson Outdoors Inc., which saw its stock rise 56 percent on the year to finish at $62.09. The company’s revenue was up 13.1 percent to $490.6 million and its net income was up 160 percent to $35.2 million in 2017.

The fifth-best local stock, just behind REV Group, was Milwaukee-based Rockwell Automation Inc., up 46 percent to close 2017 at $196.35. Near the end of the year, the company declined three takeover overtures from St. Louis-based Emerson Electric Co., the highest a $29 billion, $225-a-share bid.

“It’s never a bad thing when you have a takeover offer at a price higher than your current per-share price,” Schoen said.

ManpowerGroup Inc. stock rose 42 percent in 2017 to close the year at $126.11. The Milwaukee-based company benefitted from significant economic improvement in Europe, where 64 percent of its revenue comes from, Schoen said.

On the other end of the local stock spectrum, Connecture Inc. was the biggest decliner in 2017. Its stock price fell 90 percent, to 16 cents a share. The Brookfield-based firm recently announced it will be acquired by San Francisco-based private equity firm Francisco Partners. A health insurance marketplace software developer, Connecture’s stock was delisted from the Nasdaq market in November.

The Bon-Ton Stores Inc., the Milwaukee and York, Pennsylvania-based parent company of Boston Store, continued to struggle in 2017 and its stock price fell 77 percent to close the year at 34 cents per share. Like Connecture, Bon-Ton’s stock was delisted from the Nasdaq and is now traded over the counter.

Another big local decliner in 2017 was Roadrunner Transportation Systems Inc., which saw its stock fall 26 percent to $7.71 at the end of the year. Early in the year, the company announced the discovery of severe accounting errors. It terminated chief financial officer Peter Armbruster and removed chief executive officer Mark DiBlasi from his role. Roadrunner also shifted its corporate headquarters from Cudahy to Downers Grove, Illinois.