Thursday, December 25, 2014

Dorman soars, while Wilmington Trust sinks among local stocks

There were more winners than losers among the members of the Inquirer/Bloomberg Philadelphia Index during 2010.

Dorman soars, while Wilmington Trust sinks among local stocks

The rising tide that was the U.S. stock market in 2010 lifted many of the dinghies, trawlers and supertankers of the Philadelphia corporate world.

But it’s easy to see the dents and leaks left by the financial crisis and recession. The ranks of the good ship Inquirer/Bloomberg Philadelphia Index have been thinned significantly over the last three years.

Delistings, acquisitions, and the relocation of corporate headquarters have all played a part in winnowing the index to 181 members.

Last year, when I performed the spreadsheet gymnastics needed to isolate the best and worst local stocks, there were 195 stocks in the index. Pre-recession, the index routinely had more than 225 members.

As in previous years, I narrowed the field further by considering only stocks that began 2010 with a price more than $3 a share. That left just 121 companies. Of those, 93 finished up for the year, evidence of the recovery of equities.

Outside of their Philadelphia-area headquarters, the three best performers have very little in common.

The top gainer was Dorman Products Inc., a Colmar supplier of automotive replacement parts. As of Dec. 29, when this column was written, Dorman’s shares had risen 128 percent in 2010.

Benefitting from what has been a weak market for new cars and trucks, Dorman has reported seven straight quarters of increased year-over-year net sales and net income. Unless the wheels fell off Dorman’s cart in its fourth quarter, the 32-year-old company once known as R&B Inc. should have surpassed $400 million in sales last year for the first time.

The second-best performing local stock is a name from the dot-com bubble era, Internet Capital Group Inc. The Wayne investor in business-to-business e-commerce companies saw its shares rise 112 percent.

Still, that’s a rather sane rise compared with Web 1.0’s heyday when Internet Capital meteoric rise in market value was a sign of dot-com froth. In January 2000, Internet Capital’s market capitalization reached $45 billion surpassing General Motors Co. Once the Internet stock bubble burst, 99 percent of that shareholder value evaporated.

With a market cap of $518 million now, Internet Capital remains firmly behind a post-bankruptcy GM and its $54 billion market value.

Shares of Quaker Chemical Corp., a specialty chemical manufacturer based in Conshohocken, increased 109 percent. A supplier of lubricants and hydraulic fluids to the steel industry, Quaker’s product volumes rose significantly in 2010, thanks to increased steel demand in Brazil, China, India and Russia.

The worst-performing local stock of 2010 was Wilmington Trust Corp. whose share price clanked lower by 64 percent. The regional bank surprised investors with unexpected losses during the first half of the year. Just how bad things were became clear when Wilmington Trust was sold to Buffalo, N.Y.-based M&T Bank Corp. on Nov. 1 at the fire-sale price of $3.84 per share.

Thanks to its recent 1-for-15 reverse stock split, Warrington-based Discovery Laboratories Inc. raised its stock price above my minimum, making it eligible for the bottom three. Its shares lost 60 percent of their value last year.

Shares of Center City-based Republic First Bancorp Inc. declined 45 percent in 2010. In March, a long-delayed merger between Republic First and Harrisburg’s Metro Bancorp Inc. collapsed. In the wake of the deal’s end, Commerce Bank founder Vernon W. Hill II raised his stake in Republic First to 9.9 percent. Still, it remains a small institution with 13 branches and $947 million in assets.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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