Magnolia State stocks: wilting numbers, bright blooms

by Becky Gillette

Published: April 2,2007

When gauging the health of publicly traded companies in Mississippi, it is clear the state is missing the glitz and glamour from the days when WorldCom was one of the hottest stocks in the market.

“We don’t have very many public companies any more,” said Nancy Lottridge Anderson, CFA, president of Ridgeland-based New Perspectives Inc. and a contributing columnist for the Mississippi Business Journal. “That is the problem. We are just back to what we were traditionally, which is banking and agriculture. Most of our public companies are banks. The big thing that happened is WorldCom disappeared and Mississippi Chemical is gone. Even among the banks, Deposit Guaranty National Bank has been bought out so many times it isn’t really a (Mississippi) public company anymore. And Friede Goldman has gone by the wayside.”

Anderson said some public companies have been lost because of some difficulties in the market or the sector they are in. Some of them have been lost because of mergers, which is a national trend.

“We don’t have a whole lot of regional companies right now,” Anderson said. “I’m hearing of some out there in Mississippi that could be up-and-comers. There are some companies doing interesting things, but they are still private at this point. We are kind of in a lull. I’m hoping it is just a lull. And then what we will see is some of those companies will do a public offering, and we will be back on the radar again. There just isn’t a lot of excitement right now among those stocks.”

She does see pockets of the state that are growing very fast. The northeast area of the state near Southaven is growing rapidly in population and commercial activities. And a lot of insurance and federal grant money has flowed into the Coast.

“A lot of the banks are doing well,” Anderson said. “They are making money. We have a good business environment, but it is not exploding. That is what affects the banks. They depend on that commercial business. Banks are doing well in spite of or because of the storm. Hancock Holding, in particular, really saw their stock take off after Hurricane Katrina, but now it has started to level off.”

It isn’t a good idea to select companies to invest in just because they are based in your state.

“That is not a good investment strategy,” Anderson said. “It gets you into trouble often. You have what we call ‘home bias.’ We think more positively of companies close to home, which means we will not do our homework as much. I certainly saw that with WorldCom.”

For investors who want to put their money in Mississippi companies, Anderson said most are going to be looking at companies based elsewhere who are doing business here like Nissan.

Ashby M. Foote III, president of Vector Money Management Inc., Jackson, says that while some of Mississippi’s publicly traded companies didn’t make it through the 2000-2002 recession, which was quite severe for those in the telecommunications and agricultural arena, most of the remaining companies have done quite well in the time period since.

“WorldCom and Mississippi Chemical were two notable companies that saw their Mississippi operations sold off to other firms even though some facilities continue to operate in the state as part of Verizon and Terra Industries,” Foote said. “But most of the public companies headquartered in Mississippi have fared very well during the five years since the 2001-2002 downturn. For the past five years, 15 of the companies have outperformed the S&P 500 in terms of price appreciation, lead by Cal-Maine, which is up 620%, and Hancock Holding, which is up 150%.”

Foote said over the past 12 months, most of Mississippi’s publicly traded companies have performed well, with several companies posting very impressive gains.

“Cal-Maine, the nation’s biggest egg grower, was up 101.9% beating 498 of the 500 companies in the S&P 500,” Foote said. “Also doing well for their shareholders were Sanderson Farms, which was up 56%, Peoples Financial in Biloxi, which was up 45.2%, and Delta and Pine Land, the seed company in Scott that gained 40.9%. Rising commodity prices have been a blessing to the Mississippi economy, and while the farmers don’t show up on publicly traded lists, those companies that service the farm economy are enjoying the best of times. The ethanol programs instituted at the federal level should continue to support farm commodity prices for several years to come.”

He added that Hurricane Katrina also had a very salutary effect on financial institutions on the Gulf Coast with record deposits rolling in from insurance claims and rebuilding efforts.

Another Mississippi company with a good reputation is Parkway Properties, a real estate investment trust specializing in the operations, acquisition, ownership, management and leasing of office properties.

“I like Parkway Properties,” said Stacey Wall, president and CEO, Pinnacle Trust. “The company is geographically focused on the southeastern and southwestern United States and Chicago. The management team has had experience managing real estate through all phases of the business cycle. Chairman Leland Speed is one of the smartest people I’ve ever personally known.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.Please note that nothing contained herein should be construed as a solicitation for the sale or purchase of any securities.

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