Shares of the 50 largest publicly traded companies headquartered in North Carolina rose faster than the stock market as a whole in 2014, driven in part by a resurgence in mergers and acquisitions that boosted prices of some of the state’s most prominent companies.
Of the state’s 50 largest public companies, 39 ended 2014 with a higher stock price than they had at the end of 2013. Some of the best-performing stocks were companies involved in mergers and acquisitions, in a year when corporate buyouts and combinations increased to their highest level since the recession.
Shares in Family Dollar jumped 22 percent for the year, compared with 2 percent in 2013, as rivals Dollar Tree and Dollar General vied to buy the Matthews-based retailer. The potential acquirers offered prices higher than Family Dollar’s share price at midyear, as they sought to win over shareholders. Family Dollar shareholders are set to vote on Dollar Tree’s offer at a special meeting on Jan. 22.
Charlotte-based Chiquita Brands International’s stock rose 24 percent for the year. In October, Chiquita agreed to be purchased by two Brazilian firms for about $680 million in cash, or $14.50 a share. Cutrale and the Safra Group expect to complete the acquisition early in 2015. The Brazilian companies haven’t said where Chiquita’s headquarters will be located.
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Measured like an index, shares of North Carolina’s 50 largest public companies rose 15 percent. Looked at a slightly different way, if you had put $100 into each stock at the beginning of the year, you would have earned an almost 17 percent return, not including dividends.
And for the second year running, North Carolina stocks outpaced major indexes, which continued their upward march. The Dow Jones Industrial Average rose almost 8 percent in 2014, smashing the 17,000-point barrier for the first time and briefly breaking through 18,000 points. The S&P 500, a broader measure, cracked 2,000 points and gained 11 percent.
Despite their increase, North Carolina stocks rose at a slower clip than the whopping 28 percent index gain and 44 percent return that North Carolina’s 50 largest public companies posted in 2013.
“We’ve seen a little bit of volatility since October,” said Judson Gee, Charlotte-based managing partner of JHG Financial Advisors. “Definitely not as bad as 2011, when the market was really whipsawing.”
Although most of the state’s companies saw gains, they weren’t distributed evenly. Financial companies saw positive returns, but they were outpaced by energy, apparel and retail stocks, which benefited from rising consumer confidence and an improving economy. Some companies that debuted last year with initial public stock offerings saw their shares fall after an initial surge.
To be sure, a company’s stock is just one limited measure of that company’s performance, and nobody invests in a stock portfolio based on where the companies in it are headquartered. But the price appreciation of North Carolina companies gives a window into how investors viewed those companies in 2014.
Here’s a look at how some of the state’s biggest companies fared in the stock market.
Mergers and acquisitions
In addition to Family Dollar and Chiquita, some other well-known companies in North Carolina also became merger and acquisition targets in 2014, boosting their stock prices as acquirers paid shareholders a premium.
• Cary-based The Pantry, which operates Kangaroo Express convenience stores, agreed to be acquired by a Canadian convenience store chain. The company’s stock closed up 121 percent for the year.
• Shares of tobacco firms Reynolds American and Lorillard jumped 31 percent and 26 percent respectively this year, after announcing plans to merge with each other.
• And the state’s top-performing stock, Greensboro-based RF Micro Devices, was powered in part by its pending merger with Oregon-based Triquint. The combined company will be called Qorvo, with shares trading under a new symbol. RF Micro Devices, which makes wireless technology, rose 222 percent this year.
• The state’s largest company, Charlotte-based Bank of America, rose 15 percent. Although still well below its peak in 2006, when shares traded above $50, the stock continued its steady recovery from the depths it reached following the recession. Bank of America closed above $18 this week for the first time since 2010, though it finished the year at $17.89.
• Winston-Salem-based BB&T Corp. and Raleigh-based First Citizens BancShares increased 4 percent and 14 percent, respectively.
• Two Charlotte-based utilities rode out volatile commodities prices and delivered solid returns for investors. Piedmont Natural Gas stock rose 19 percent. Duke Energy shares gained 21 percent, as investors appeared to shrug off a coal ash spill that polluted the Dan River in North Carolina and questions about how it handles its giant coal ash dumps across the state.
Apparel and retail stocks
• Greensboro-based VF Corp., maker of brands including Wrangler and North Face, saw higher profits and raised its outlook as consumer spending bounced back. The company’s shares rose 20 percent. And Winston-Salem-based Hanesbrands, which bought lingerie maker Maidenform last year, improved its financial results and saw shares jump 59 percent in 2014.
• Mooresville-based Lowe’s rode the recovering housing market to close up 39 percent for the year. Other retailers also did well, including Greensboro-based Tanger Factory Outlet Centers (up 15 percent), Black Mountain-based Ingles Markets (up 37 percent) and clothing retailer Cato Corp. (up 33 percent).
Some of the companies that went public for the first time in 2013 saw their stocks fall in 2014 (companies that held an initial public offering this year weren’t included in this analysis).
• Charlotte-based Premier Inc. ended the year down 9 percent from its 2013 close. In its most recent quarter, the healthcare services company posted a profit attributable to shareholders of $9.3 million, compared with a loss of $476,000 in the same period a year ago. But its total revenues slipped.
• Charlotte-based hotel operator Extended Stay ended the year down 26 percent from its close in 2013. Revenues so far this year are up almost 8 percent, but profits for the first nine months rose less than 1 percent, to $98 million.
• Cary-based Ply Gem, which makes vinyl siding, windows and doors, bounced back from a major mid-year slump that sent its shares plunging more than 50 percent, after reporting strong earnings and improving sales in November. The company still closed the year down 22 percent.
• Stock Building Supply, a Raleigh-based company that sells lumber and other housing materials, missed Wall Street estimates when it reported its most recent quarterly earnings, though its financial results improved. The company’s chief executive said the housing market has been “slower than expected.” The company ended the year down 16 percent.
N.C. 50: The year in North Carolina stocks
Performance of the 50 largest publicly traded companies headquartered in North Carolina, ranked by revenue. Rates of return do not include dividends.
CompanyHeadquarters2014 close2013 close2009 close1-year return5-year returnBank of America Corp.
Charlotte17.8915.5715.0615%19%Lowe's Cos. Inc.
Mooresville68.8049.5523.3939%194%Duke Energy Corp.
Greensboro74.9062.3418.3120%309%Family Dollar Stores
Winston-Salem38.8937.3225.374%53%Sonic Automotive Inc.
Charlotte27.0424.4810.3910%160%Reynolds American Inc.
Winston Salem64.2749.9926.4929%143%Pantry Inc.
Cary37.0616.7813.59121%173%Laboratory Corp. of America
Winston Salem111.6270.2724.1159%363%Lorillard Inc.
Hickory22.8318.93N/A21%N/AIngles Markets Inc.
Black Mountain37.0927.1015.1337%145%Carlisle Cos. Inc.
Charlotte90.2479.4034.2614%163%Chiquita Brands International
Charlotte14.4611.7018.0424%-20%Babcock & Wilcox Co.
Charlotte30.3034.19N/A-11%N/AOld Dominion Freight Line
Thomasville77.6453.0213.6446%469%Martin Marietta Materials
Charlotte70.5962.2331.3213%125%Alliance One International
Morrisville1.583.054.88-48%-68%Red Hat Inc.
Raleigh69.1456.0430.9023%124%Coca-Cola Bottling Co.
Charlotte88.0373.1954.0220%63%Fresh Market Inc.
Durham32.2262.5256.37-48%-43%Piedmont Natural Gas Co.
Charlotte39.4133.1626.7519%47%Ply Gem Holdings
Cary13.9818.03N/A-22%N/ASalix Pharmaceuticals Ltd.
Raleigh114.9489.9425.3928%353%Stock Building Supply Holdings
Raleigh15.3218.22N/A-16%N/ARF Micro Devices Inc.
Greensboro16.595.164.77222%248%Extended Stay America
Charlotte19.3126.26N/A-26%N/AEnpro Industries Inc.
Charlotte62.7657.6526.419%138%Horizon Lines Inc.
Charlotte0.630.84139.25-25%-99%First Citizens Bancshares
Charlotte42.1831.8020.0633%110%Fairpoint Communications Inc.
Greensboro29.7327.2411.649%155%Polypore International Inc.
Charlotte47.0538.9011.9021%295%Highwoods Properties Inc.
Raleigh44.2836.1733.3522%33%Xerium Technologies Inc.
Raleigh15.7816.4915.20-4%4%Speedway Motorsports Inc.
Concord21.8719.8517.6210%24%Krispy Kreme Doughnuts Inc.
Winston-Salem19.7419.292.952%569%Tanger Factory Outlet Centers Inc.
Greensboro36.9632.0219.5015%90%Insteel Industries Inc.
Mount Airy23.5822.7313.004%81%Culp Inc.
High Point21.6820.459.986%117%Source: Bloomberg data