Stock market had volatile first half of year – BizTimes.com (Milwaukee)

Stock market investors enjoyed strong gains in 2017, but the market has been much more volatile and posted mixed results during the first half of 2018.

After rising 25 percent in 2017, the Dow Jones Industrial Average dipped 2 percent during the first half of this year. The S&P 500 rose 19 percent in 2017, but then rose just 1.7 percent during the first half of 2018.

The tech-heavy Nasdaq index fared better, growing 8.8 percent in the first half of this year after a 28 percent increase in 2017.

For the publicly traded companies based in southeastern Wisconsin, losers outnumbered gainers by a more than 2-to-1 ratio during the first half of the year. In 2017, local gainers far outnumbered losers.

The biggest local gainer during the first half of 2018 was Racine-based Johnson Outdoors Inc., which saw its stock price rise 36 percent to $84.53 a share.

In May, the company reported a 54 percent increase in second-quarter net income, to $21.6 million, compared to $14 million a year ago, and an 11 percent increase in net sales, to $165.8 million.

Johnson Outdoors is a manufacturer of outdoor recreational products such as watercraft, diving equipment, navigational products and outdoor clothing.

“We continue to benefit from our dedicated focus on consumer-driven innovation that delivers bigger, better marketplace success, most notably in Fishing, our largest and most profitable business,” said Helen Johnson-Leipold, chairman and chief executive officer of Johnson Outdoors. “Excitement for our 2018 product lineup remains strong, giving us a great start to the year and positioning our brands for continued marketplace success.”

The second-best local stock during the first half of 2018 was Menomonee Falls-based department store chain Kohl’s Corp., which gained 34 percent, to $72.90.

The changing retail landscape, led by the rapid expansion of Amazon, has created major challenges for brick-and-mortar retailers, forcing many to close stores in recent years. But Kohl’s posted strong first-quarter results, with a 14 percent increase in net income and a 3.5 percent increase in revenue.

“We are very pleased with our strong start to the year,” Kohl’s chief executive officer Michelle Gass said during the company’s first quarter earnings call. “Our strategies are gaining traction and we have momentum. I look forward to working with the team as we continue to focus on delivering solid execution, innovating for the future and continuing to enhance our culture of speed and agility in this dynamic retail environment.”

The third-best local stock during the first half was Milwaukee-based Douglas Dynamics Inc., which manufactures truck equipment, including snow plows. Its stock price rose 27 percent, to $48, during the first half of the year. The company’s first-quarter net sales were up 16 percent, to $84 million. The increase was driven by improved snowfall and overall increased demand compared to the same period a year ago, the company said.

The biggest declining local stock during the first half of the year was Milwaukee-based specialty vehicle manufacturer REV Group Inc., which saw its stock price fall 48 percent, from $32.53 at the start of the year to $17.01 at the end of June.

The company reported $7.4 million in net income for the second quarter, an increase of 9.2 percent from a year ago, and net sales of $608.9 million, up 11.7 percent compared to a year ago. However, REV Group’s second-quarter adjusted EBITDA of $34.1 million was down 9.2 percent from a year ago.

“Our fiscal second-quarter results were below our expectations and were impacted by a number of factors,” said REV Group CEO Tim Sullivan. “In particular, cost inflation across many of the commodities and services we buy was significant in the quarter and due to the length of our backlogs, we were not able to mitigate these increases. We estimate the cost inflation will have an approximate $19 million impact on our current fiscal year. Additionally, production and sales at several of our business units were adversely impacted by the availability of chassis. Finally, margins were impacted by lower-than-expected sales of certain higher-content product categories, including custom fire apparatus, large commercial buses and Class A RVs.”

The company in June announced a $1.9 million restructuring effort, expected to generate $20 million in annualized savings. The plan included the closure of REV Group’s Miami office and consolidation of some production operations.

“We have taken mitigating action across our business to drive targeted margin expansion,” Sullivan said. “First, we have implemented price increases and surcharges to offset material and service cost increases for all new orders. Second, we have implemented a series of significant cost and spending reduction actions, including: supply chain actions, consolidations of certain facilities, and reductions in overhead headcount and spending. Third, we have continued to add talent in several key areas of our business that we believe will help accelerate our long-term growth objectives.”

The other biggest local stock decliners during the first half of 2018 were: Manitowoc Co. Inc., which recently moved its headquarters to Milwaukee, saw its stock price fall 34 percent, to $25.86; Milwaukee-based ManpowerGroup Inc.’s stock fell 32 percent, to $86.06; and Wauwatosa-based Briggs & Stratton Corp.’s stock fell 31 percent, to $17.61.

Milwaukee-area stock performance

Ticker

Company Name

1/1/18
price

6/30/18
price

Change

JOUT

Johnson Outdoors Inc.

$62.09

$84.53

36%

KSS

Kohl’s Corp.

$54.23

$72.90

34%

PLOW

Douglas Dynamics Inc.

$37.80

$48.00

27%

WEYS

Weyco Group Inc.

$29.72

$36.40

22%

MCS

Marcus Corp.

$27.35

$32.50

19%

ATU

Actuant Corp.

$25.30

$29.35

16%

FISV

Fiserv Inc.

$65.57

$74.09

13%

RXN

Rexnord Corp.

$26.02

$29.06

12%

ASB

Associated Banc-Corp.

$25.40

$27.30

7%

GNRC

Generac Holdings Inc.

$49.52

$51.73

4%

BRC

Brady Corp.

$37.90

$38.55

2%

WSBF

Waterstone Financial Inc.

$17.05

$17.05

0%

JASN

Jason Industries Inc.

$2.37

$2.32

-2%

SXT

Sensient Technologies Corp.

$73.15

$71.55

-2%

WEC

WEC Energy Group Inc.

$66.43

$64.65

-3%

WBB

Westbury Bancorp Inc.

$23.00

$22.24

-3%

AOS

A.O. Smith Corp.

$61.28

$59.15

-3%

BMI

Badger Meter Inc.

$47.80

$44.70

-6%

TWIN

Twin Disc Inc.

$26.57

$24.82

-7%

SNA

Snap-on Inc.

$174.30

$160.72

-8%

QUAD

Quad/Graphics Inc.

$22.60

$20.83

-8%

ESNC

EnSync Inc.

$0.40

$0.37

-8%

MOD

Modine Manufacturing Co.

$20.20

$18.25

-10%

DOC

Physicians Realty Trust

$17.99

$15.94

-11%

JCI

Johnson Controls International plc

$38.11

$33.45

-12%

GDI

Gardner Denver Holdings Inc.

$33.93

$29.39

-13%

ROK

Rockwell Automation Inc.

$196.35

$166.23

-15%

HOG

Harley-Davidson Inc.

$50.88

$42.08

-17%

APAM

Artisan Partners Asset Management Inc.

$39.50

$30.15

-24%

KOSS

Koss Corp.

$3.09

-$2.35

-24%

MTG

MGIC Investment Corp.

$14.11

$10.72

-24%

STRT

Strattec Security Corp.

$43.55

$30.55

-30%

BGG

Briggs & Stratton Corp.

$25.37

$17.61

-31%

MAN

ManpowerGroup Inc.

$126.11

$86.06

-32%

MTW

Manitowoc Co. Inc.

$39.34

$25.86

-34%

REVG

REV Group Inc.

$32.53

$17.01

-48%

All data gathered by Robert W. Baird & Co. from Factset Research Systems. This information has been obtained from sources we consider reliable, but we cannot guarantee the accuracy.

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Stock market investors enjoyed strong gains in 2017, but the market has been much more volatile and posted mixed results during the first half of 2018.

After rising 25 percent in 2017, the Dow Jones Industrial Average dipped 2 percent during the first half of this year. The S&P 500 rose 19 percent in 2017, but then rose just 1.7 percent during the first half of 2018.

The tech-heavy Nasdaq index fared better, growing 8.8 percent in the first half of this year after a 28 percent increase in 2017.

For the publicly traded companies based in southeastern Wisconsin, losers outnumbered gainers by a more than 2-to-1 ratio during the first half of the year. In 2017, local gainers far outnumbered losers.

The biggest local gainer during the first half of 2018 was Racine-based Johnson Outdoors Inc., which saw its stock price rise 36 percent to $84.53 a share.

In May, the company reported a 54 percent increase in second-quarter net income, to $21.6 million, compared to $14 million a year ago, and an 11 percent increase in net sales, to $165.8 million.

Johnson Outdoors is a manufacturer of outdoor recreational products such as watercraft, diving equipment, navigational products and outdoor clothing.

“We continue to benefit from our dedicated focus on consumer-driven innovation that delivers bigger, better marketplace success, most notably in Fishing, our largest and most profitable business,” said Helen Johnson-Leipold, chairman and chief executive officer of Johnson Outdoors. “Excitement for our 2018 product lineup remains strong, giving us a great start to the year and positioning our brands for continued marketplace success.”

The second-best local stock during the first half of 2018 was Menomonee Falls-based department store chain Kohl’s Corp., which gained 34 percent, to $72.90.

The changing retail landscape, led by the rapid expansion of Amazon, has created major challenges for brick-and-mortar retailers, forcing many to close stores in recent years. But Kohl’s posted strong first-quarter results, with a 14 percent increase in net income and a 3.5 percent increase in revenue.

“We are very pleased with our strong start to the year,” Kohl’s chief executive officer Michelle Gass said during the company’s first quarter earnings call. “Our strategies are gaining traction and we have momentum. I look forward to working with the team as we continue to focus on delivering solid execution, innovating for the future and continuing to enhance our culture of speed and agility in this dynamic retail environment.”

The third-best local stock during the first half was Milwaukee-based Douglas Dynamics Inc., which manufactures truck equipment, including snow plows. Its stock price rose 27 percent, to $48, during the first half of the year. The company’s first-quarter net sales were up 16 percent, to $84 million. The increase was driven by improved snowfall and overall increased demand compared to the same period a year ago, the company said.

The biggest declining local stock during the first half of the year was Milwaukee-based specialty vehicle manufacturer REV Group Inc., which saw its stock price fall 48 percent, from $32.53 at the start of the year to $17.01 at the end of June.

The company reported $7.4 million in net income for the second quarter, an increase of 9.2 percent from a year ago, and net sales of $608.9 million, up 11.7 percent compared to a year ago. However, REV Group’s second-quarter adjusted EBITDA of $34.1 million was down 9.2 percent from a year ago.

“Our fiscal second-quarter results were below our expectations and were impacted by a number of factors,” said REV Group CEO Tim Sullivan. “In particular, cost inflation across many of the commodities and services we buy was significant in the quarter and due to the length of our backlogs, we were not able to mitigate these increases. We estimate the cost inflation will have an approximate $19 million impact on our current fiscal year. Additionally, production and sales at several of our business units were adversely impacted by the availability of chassis. Finally, margins were impacted by lower-than-expected sales of certain higher-content product categories, including custom fire apparatus, large commercial buses and Class A RVs.”

The company in June announced a $1.9 million restructuring effort, expected to generate $20 million in annualized savings. The plan included the closure of REV Group’s Miami office and consolidation of some production operations.

“We have taken mitigating action across our business to drive targeted margin expansion,” Sullivan said. “First, we have implemented price increases and surcharges to offset material and service cost increases for all new orders. Second, we have implemented a series of significant cost and spending reduction actions, including: supply chain actions, consolidations of certain facilities, and reductions in overhead headcount and spending. Third, we have continued to add talent in several key areas of our business that we believe will help accelerate our long-term growth objectives.”

The other biggest local stock decliners during the first half of 2018 were: Manitowoc Co. Inc., which recently moved its headquarters to Milwaukee, saw its stock price fall 34 percent, to $25.86; Milwaukee-based ManpowerGroup Inc.’s stock fell 32 percent, to $86.06; and Wauwatosa-based Briggs & Stratton Corp.’s stock fell 31 percent, to $17.61.

Milwaukee-area stock performance

Ticker

Company Name

1/1/18
price

6/30/18
price

Change

JOUT

Johnson Outdoors Inc.

$62.09

$84.53

36%

KSS

Kohl’s Corp.

$54.23

$72.90

34%

PLOW

Douglas Dynamics Inc.

$37.80

$48.00

27%

WEYS

Weyco Group Inc.

$29.72

$36.40

22%

MCS

Marcus Corp.

$27.35

$32.50

19%

ATU

Actuant Corp.

$25.30

$29.35

16%

FISV

Fiserv Inc.

$65.57

$74.09

13%

RXN

Rexnord Corp.

$26.02

$29.06

12%

ASB

Associated Banc-Corp.

$25.40

$27.30

7%

GNRC

Generac Holdings Inc.

$49.52

$51.73

4%

BRC

Brady Corp.

$37.90

$38.55

2%

WSBF

Waterstone Financial Inc.

$17.05

$17.05

0%

JASN

Jason Industries Inc.

$2.37

$2.32

-2%

SXT

Sensient Technologies Corp.

$73.15

$71.55

-2%

WEC

WEC Energy Group Inc.

$66.43

$64.65

-3%

WBB

Westbury Bancorp Inc.

$23.00

$22.24

-3%

AOS

A.O. Smith Corp.

$61.28

$59.15

-3%

BMI

Badger Meter Inc.

$47.80

$44.70

-6%

TWIN

Twin Disc Inc.

$26.57

$24.82

-7%

SNA

Snap-on Inc.

$174.30

$160.72

-8%

QUAD

Quad/Graphics Inc.

$22.60

$20.83

-8%

ESNC

EnSync Inc.

$0.40

$0.37

-8%

MOD

Modine Manufacturing Co.

$20.20

$18.25

-10%

DOC

Physicians Realty Trust

$17.99

$15.94

-11%

JCI

Johnson Controls International plc

$38.11

$33.45

-12%

GDI

Gardner Denver Holdings Inc.

$33.93

$29.39

-13%

ROK

Rockwell Automation Inc.

$196.35

$166.23

-15%

HOG

Harley-Davidson Inc.

$50.88

$42.08

-17%

APAM

Artisan Partners Asset Management Inc.

$39.50

$30.15

-24%

KOSS

Koss Corp.

$3.09

-$2.35

-24%

MTG

MGIC Investment Corp.

$14.11

$10.72

-24%

STRT

Strattec Security Corp.

$43.55

$30.55

-30%

BGG

Briggs & Stratton Corp.

$25.37

$17.61

-31%

MAN

ManpowerGroup Inc.

$126.11

$86.06

-32%

MTW

Manitowoc Co. Inc.

$39.34

$25.86

-34%

REVG

REV Group Inc.

$32.53

$17.01

-48%

All data gathered by Robert W. Baird & Co. from Factset Research Systems. This information has been obtained from sources we consider reliable, but we cannot guarantee the accuracy.

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