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Stocks indexes on rise [Leader-Telegram, Eau Claire, Wis.](Leader-Telegram (Eau Claire, WI) Via Acquire Media NewsEdge) Oct. 18--A rally in the retail sector helped an index of area stocks grow 72 percent through the first three quarters of the year, according to the Chippewa Valley Center for Economic Research and Development. The Eau Claire Area Stock Basket (ECB), an index of businesses with ties to the Chippewa Valley, was anchored by retail businesses, which grew nearly 121 percent through Sept. 30. By comparison, the Rydex S&P 500 was up more than 37 percent, the Dogs of the Dow (high-yield stocks) was up 11.2 percent, and a fund tied to the price of gold was up 15 percent. Thirty-nine stocks in the ECB showed positive growth through three quarters, while 12 recorded declines. The ECB also compared favorably with other state indexes, as R.W. Baird's was up 27 percent and Bloomberg's was up 16 percent. Eric Jamelske, a UW-Eau Claire economics professor, heads the CVCERD. His students invest a hypothetical $100,000 in each of four investment areas at the start of the year. "Because of the government stimulus payments, low interest rates and low petrol prices, households have been able to spend more," said Alex Trow, a student project leader. "Customers believe that the economy is finally recovering." Adam Mohr, a senior financial adviser with Ameriprise in Eau Claire, agreed. "Although we will continue to witness high unemployment numbers, companies (that) have taken cost-cutting measures have positioned themselves very well for the upturn," he said. "Fear, which has been the driving factor in this recent downturn, appears to be somewhat dissipating as consumers seem to be gaining confidence as reflected in a boost in the retail market. "This recovery, however, will be slower than it has been in the past, and we will continue to see high unemployment as companies are slow to rehire." The retail sector's improvement is evidenced by the performance of several national companies. Macy's was up 75 percent through three quarters, J.C. Penney Co. 71 percent, Sears 68 percent, Kohl's 57 percent, Walgreens 52 percent, Target 36 percent and Best Buy 34 percent. "As businesses are failing, it's eliminated competition," Trow said. Companies such as Eau Claire-based National Presto Industries did not see inflated growth percentages through the first three quarters because they fared well over the past year. Stocks that got hit hardest during the recession often were seen as bargains by investors and have the most room for improvement. Top ECB performers in percentage growth over the first three quarters were: --Borders Group, up 697 percent. The company, which operates a bookstore in Eau Claire, increased its shelf space dedicated to toys and games. It also announced in September a deal with Verizon Communications to provide free Wi-Fi service in "virtually all" of its more than 500 stores around the country. Borders named Joanna Goldstein to a new vice president position that handles marketing and revenue, and elected five new board members. New marketing efforts have included sponsoring the New York Yankees and offering a 30 percent discount to teachers. "Borders became a lean corporation by cutting many executive positions and general workers in the stores," said Alex Brueggen, also a student leader in the CVCERD project. "The store themselves have changed. (They) now have condensed their specialty trade books, like quilting and others, into a single section. Also, Borders drastically reduced the amount of CDs and DVDs they sell because of the new craze of downloading these items online." The stores also have expanded their young teens and biography sections, Brueggen said. --Lee Enterprises, up 555 percent. Mary Junck, president and chief executive officer of the publishing company, developed a new marketing campaign that includes the slogan "First. Best. Today. Tomorrow." Lee also is advertising to niche markets, Brueggen said, and using online tracking mechanisms through Yahoo that allow for more targeted advertising. However, the company's financials, including return-on-equity and debt-to-equity ratios, remain concerns for investors. --Cray, up 300 percent. The computer-maker recently appointed Michael Piraino to the position of vice president, general counsel and corporate secretary. Cray, which has a Chippewa Falls location, signed a deal in September to sell a $40 million supercomputer to the Korea Meteorological Administration (KMA) in South Korea. When installed by the second half of 2010, the system will have performance in excess of 600 teraflops (trillions of calculations per second). Cray also won a supercomputer contract through the U.S. Depart-ment of Energy's National Energy Research Scientific Computing Center. "These are two of the larger contracts Cray had received in a long time," said Brueggen, who added that Cray also acquired significant assets from SiCortex. --General Growth Properties, up 270 percent. The shopping mall operator, which owns Oakwood Mall in Eau Claire, recently named John Haley to its board of directors. Haley is a retired partner of the international accounting firm Ernst & Young. The company filed for Chapter 11 bankruptcy protection in April to reduce and restructure its debts. --Carmike Cinemas, up 189 percent. Theater owners have benefited from the popularity of 3-D movies and box-office hits that performed beyond projections. Carmike operates a theater at Oakwood Mall. "Economists say that many Americans are going to the movies instead of doing other, more expensive activities like going on vacations," Brueggen said. "This renewed interest in the movies has caused Carmike to open five more theaters around the country." Carmike also recently added a position to its board of directors and elected Jeffrey Berkman to fill the spot. Since 2000, Berkman has served as senior vice president and general counsel for Bigfoot Group of Companies, which includes a movie and television production company. --Silicon Graphics Inc., down 99 percent. The company, which specializes in computing and data storage, reported a net loss of $153 million in fiscal year 2008. That followed losses of $104 million in 2007 and $146 million in 2006. SGI, which maintains a facility in Chippewa Falls, filed for bankruptcy in April and sold much of its assets to Rackable Systems. --Charter Communications, down 63 percent. Despite a 4.1 percent increase in revenue for the quarter ending June 30, the company suffered from the burden of $21.6 billion in debt as of that date. --The final three poor performers were members of the embattled banking industry: Associated Banc-Corp, down 46 percent; Marshall & Ilsley, down 41 percent; and Citizens Community Bancorp, down 32 percent. Citizen Community Bancorp's wholly owned subsidiary, Citizens Community Federal, removed James Cooley from his positions as president and chief executive officer effective Sept. 30. Timothy Cruciani, former executive vice president, assumed the role of president. The company also named Edward Schaefer, former Silver Spring Foods executive, to a board position and hired him as a full-time consultant for the next 18 to 36 months. The banking industry has been affected by consumers uninterested in borrowing or unable to borrow because of tighter lending standards. Mohr offered a few areas to keep tabs on as 2009 progresses. "We're keeping an eye on the technology sector, emerging markets, which have doubled since March, and higher yielding bonds that offer a better risk-to-return ratio," Mohr said. "We're also focusing on portfolios whose money managers are taking a 'bottom's up' approach -- a strategy focused on examining a company's earnings, profit margins, debt structure and cash flow versus purchasing broad indexes that carry both good and bad stock." To see more of the Leader-Telegram or to subscribe to the newspaper, go to http://www.leadertelegram.com/. Copyright (c) 2009, Leader-Telegram, Eau Claire, Wis. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |