There’s nothing like a good buyout to lift the price of a stock, even if your company isn’t actually the target of a buyout.
The top performer among all publicly traded Jacksonville-based companies in 2015 was Jacksonville Bancorp Inc., which jumped 53 percent after agreeing to an acquisition offer from Ameris Bancorp in September.
Meanwhile, the second-best performer was Jacksonville’s other publicly traded community banking company, Atlantic Coast Financial Corp.
Atlantic Coast Financial rose 48 percent in 2015. While the company’s financial performance has improved tremendously over the last two years, the most likely catalyst for its stock spurt last year would be speculation about a possible buyout. However, there have been no indications that any kind of a merger is in the cards in the near future.
The other big winner among Jacksonville companies last year provides services to banking companies.
Black Knight Financial Services Inc. was spun off from Fidelity National Financial Inc. in May with an initial public offering and rose 35 percent over its seven months of trading after the IPO.
Black Knight provides processing services for mortgage lenders and is the dominant player in its field, as more than half of all U.S. mortgage loans are serviced through its systems. That dominance has impressed investors.
Overall, it was a lackluster year for Jacksonville stocks, with seven of the stocks that traded above $1 rising in 2015 and 11 declining.
The worst performance came from Rayonier Advanced Materials Inc., which has seen nothing but problems since it was spun off from Rayonier Inc. in mid-2014.
Rayonier AM has produced disappointing earnings since the spinoff, due largely to oversupply issues in the market for its cellulose specialty products.
Beyond that, the company had a contract dispute with its largest customer, Eastman Chemical Co., that sent its stock even lower.
Although that dispute was resolved last month, Rayonier AM’s stock still hasn’t recovered amid the continued uncertainty in the cellulose specialty market. The company’s stock dropped more than 50 percent last year.
Rayonier Inc., which became a timber and real estate company after the spinoff, also disappointed stockholders last year, producing a negative return of 17 percent (including dividend payments).
Jacksonville’s two big transportation companies also had a down year in 2015, as investors were uncertain about freight demand.
Railroad company CSX Corp. produced a negative 26 percent return and trucking company Landstar System Inc. produced a negative 17 percent return.
Buyout still leaves APR lower
Buyouts will always lift a stock’s price, but they don’t always make stockholders as happy as they can be.
APR Energy plc reminded stockholders in a recent notice that its pending buyout at 175 pence a share (about $2.60) is significantly higher than the stock’s trading price of 93 pence before the sale negotiations began.
However, that’s lower than APR’s price of 186 pence at the beginning of 2015 and, depending on when shares were bought, some stockholders lost even more.
The roller coaster ride saw APR’s stock rise in early 2015 to a high of more than 400 pence in April, but that’s still sharply lower than its price of about 1,000 pence two years ago.
Jacksonville-based APR, which builds interim power plants in overseas markets, has suffered significant losses from projects in some risky countries.
Shareholders are scheduled to vote on the buyout offer from a group of private investors today at the London Stock Exchange building, where its stock trades.
Latitude 360 and ParkerVision fall sharply
A couple of high-profile Jacksonville-based companies with stocks already trading at very low levels fell sharply, on a percentage basis, in 2015.
Latitude 360 Inc., which operates dining and entertainment venues in Jacksonville, Indianapolis and Pittsburgh, started 2015 with optimistic plans for expansion of its concept.
But the company scaled back its plans after big losses and its stock price — which was at $1.40 a year ago — was basically near zero at the end of 2015 amid questions about its future.
ParkerVision Inc.’s stock was already below $1 at the beginning of 2015 and it fell another 75 percent during the year, ending at 23 cents.
ParkerVision’s unsuccessful attempts to recover damages in patent infringement lawsuits against major electronics manufactures have impacted the stock and while it did report minimal revenue in late 2015, investors have lost confidence.
The company’s stock traded above $5 two years ago after a jury awarded ParkerVison damages in a suit against Qualcomm Inc., but the stock dropped after a federal judge threw out that verdict.
Spinoff impacts FNFV
Fidelity National Financial Ventures also showed a big drop for the year, as its stock fell 29 percent, but that decline was not entirely related to the company’s performance.
FNFV is a unit of Fidelity National Financial that holds the non-real estate-related investments of the title insurance giant. Fidelity created FNFV as a tracking stock to represent the value of those investments.
Part of FNFV’s strategy is to “monetize” its assets by looking to profit from sales or spinoffs. The stock dropped at the end of September after Fidelity spun off its investment in J. Alexander’s Holdings Inc., distributing stock in that restaurant business to FNFV shareholders.
FNFV still holds a 55 percent stake in another company, American Blue Ribbon Holdings, which operates five restaurant chains.
Fidelity was planning a spinoff of American Blue Ribbon but said two months ago it is rethinking its options for that business. The company still intends to spin it off, but it may split up the five chains into separate companies and create multiple new public companies.
If that isn’t confusing enough, Fidelity last week revealed an investment in another restaurant company in Securities and Exchange Commission filings.
Through FNFV, Fidelity has acquired 9.3 percent of the stock of a Texas-based company called Del Frisco’s Restaurant Group Inc.
Fidelity spent $31.1 million to buy 2.17 million shares in a number of open market transactions from Oct. 21 to Dec. 30.
Del Frisco’s operates 49 restaurants under the names Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse and Del Frisco’s Grille.
Fidelity said in its SEC filing that it bought the stock for investment purposes, but also said it may continue to purchase stock in the company and possibly “engage in discussions with management” about the business.
Ameris stock rising
Ameris would have been one of the top performing local stocks last year with a 33 percent return, but it’s technically not a Jacksonville-based company.
The banking company is moving its executive offices to Jacksonville and will expand its area operations with the acquisition of Jacksonville Bancorp, but it’s still officially headquartered in Moultrie, Ga., and has not said if it will change its headquarters address to Jacksonville.
One analyst is expecting even more growth in Ameris’ stock this year. Piper Jaffray analyst Peyton Green raised his price target from $33 to $37 (with the stock at $33.83) and maintained an “overweight” rating after meeting with Chief Financial Officer Dennis Zember last month.
“Our recent meeting with CFO Zember provided encouraging signs that 2017 earnings could benefit from additional organic growth, operating leverage due to efficiency efforts, and M&A,” Green said in his research note.
“As a result, we still believe Ameris represents a solid investment opportunity given the outlook for already strong returns and potentially stronger EPS growth,” he said.
Green said Zember expects the Jacksonville Bancorp deal to increase earnings per share by 2 percent to 3 percent.
Analyst optimistic about FIS
Another big merger that was completed at the end of 2015 was Fidelity National Information Services Inc.’s acquisition of SunGard Data Systems Inc.
After the merger, Robert W. Baird analyst David Koning met with Peter Gunnlaugsson, senior vice president of investor relations, and said he is maintaining an “outperform” rating on Jacksonville-based Fidelity National Information Services, or FIS.
“Management is clearly focused on improved execution in 2016, and is attempting to set an adequately conservative bar, given the recent SunGard acquisition and some 2015 choppiness,” Koning said in his research report.
“Overall, management’s tone was optimistic around long-term trends, while acknowledging some missteps this year that have been a headwind to sentiment. We continue to view year-out risk/reward as compelling,” he said.
FRP and Patriot share the load
When transportation company Patriot Transportation Holding Inc. was spun off from real estate company FRP Holdings Inc. last year, Tom Baker took on the chief executive officer role at both companies.
According to the proxy statements filed by the two companies over the last couple of weeks, Baker is truly treating each company equally. The spinoff agreement between the two companies calls for them to equally share Baker’s compensation package, it said.
However, the proxies do indicate a slight difference. Patriot is scheduled to pay Baker a base salary of $216,300 in 2016 while FRP is paying $206,300.
Two other executives who serve the same roles at both companies, Executive Vice President and Chief Financial Officer John Milton and Controller and Chief Accounting Officer John Klopfenstein, are also getting compensation packages split evenly by the two companies.
Patriot has scheduled its annual shareholders meeting for Jan. 27 and FRP will hold its meeting a week later on Feb. 3.
* return since May 19 IPO
** returns since Patriot spun off from FRP on Jan. 31