Continuing weakness in the oil and gas industry again caused the Pelican State Portfolio, a group of Louisiana stocks tracked by The Advocate, to lag behind the performance of the broader market.
The 23 Louisiana-based publicly traded companies that make up the portfolio were down 0.5% for the first three months of the year. In comparison, both the S&P 500, which tracks 500 large companies, and the Russell 2000, which follows small-cap stocks that have an average market capitalization of $1.3 billion, were up by 14.4% during the quarter. The Dow Jones Industrial Average, an index of 30 top businesses, was up by 12.4% during the three-month period.
For the 12-month period ending in March, the Pelican State Portfolio was down 3.1%. The Dow rose by 7.6% during that period, while the S&P was close behind with a 7.3% bump. The Russell 2000 was up by 0.7%.
“It was quite a quarter for the national markets,” said Peter Ricchiuti, a finance professor at Tulane University who tracks regional stocks across the South through the university's Burkenroad Reports.
The biggest loser in the Pelican State Portfolio was Lafayette-based PHI Inc., which was down more than 65% for the quarter. The helicopter service company filed for Chapter 11 bankruptcy protection in mid-March, days before $500 million in debt came due.
PHI is the third major helicopter service company to file for bankruptcy in recent years, according to trade publication Aviation International News. CHC Helicopters and Erickson both filed for bankruptcy in 2016, and helicopter leasing company Waypoint filed in November, the publication reported. Bristow Group, a Houston-based helicopter firm that is a competitor to PHI, has seen its stock price plunge dramatically, from more than $18 a share in mid-May to mainly trading below $1.25 a share since late February.
“The Gulf of Mexico is just totally dead,” Ricchiuti said.
Another big loser was Covington-based Globalstar. The company stock price fell by nearly a third over the first quarter.
The low price of Globalstar stock contributed to the big decline. Because the stock ended the quarter trading at 43 cents a share, a decline of only a few cents is significant percentagewise. “Globalstar has enormous potential but an enormous amount of debt,” Ricchiuti said.
Monroe-based CenturyLink saw its stock price fall by 19 percent during the quarter. On March 4, the company announced it was delaying the filing of its 10-K annual report, a move that shook investors. Even though the report was filed a week later, there are still some concerns.
“Whenever Wall Street sees a delay, they totally panic that the reason might be bad,” Ricchiuti said. “They punish the stock.”
The biggest winner in the quarter was Baton Rouge-based H&E Equipment, which saw its stock price go up by more than 24%. The company sells and rents heavy construction equipment.
The strong first-quarter performance of H&E and Lamar Advertising, another Baton Rouge-based business, shows the health of the national economy.
“Those companies are really big-time economic indicators,” Ricchiuti said. “Advertising and heavy equipment are very much tied to the national economy.”
Lafayette-based LHC Group also outperformed the market during the quarter. Shares of the home health and hospice business were up by 18%. “That indicates that people are getting older,” he said. “The oldest Baby Boomers are about 72 and that’s in the sweet spot for home health.”
Burkenroad will hold its 23nd annual conference from 8 a.m. to 1 p.m. April 26 at The New Orleans Sheraton Hotel, 500 Canal St. Representatives from 36 publicly traded companies, including IberiaBank, Crown Crafts, Sanderson Farms and Denbury Resources, will discuss their businesses. The event is free and open to the public. Registration is at burkenroad.org.