Prospering Louisiana Companies

It’s been a good year to have money in local businesses

ILLUSTRATED BY JANE SANDERS

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Many investors may be hoping for a better year ahead than the one they saw during the past 12 months. With a seemingly steady stream of not-so-good economic news, it was hard not to be nervous about what the stock market might produce from day to day.

In fact, though, the market’s performance was nothing to sneeze at. The S&P 500 index, which gauges the action of large-capitalization companies across the United States, racked up a return close to 24 percent during the 12-month period that ended in mid-July.

Peter Ricchiuti, assistant dean at Tulane University’s Freeman School of Business, says Louisiana-based public companies held their own and in some cases even outperformed the big index. “We had a lot of good performers in Louisiana,” he says.

Consider Cleco Corp., the electric power company based in Pineville. Cleco shares rose almost 25 percent during the 12-month period ending in mid-July.

Or how about the impressive performance of Gulf Island Fabrication Inc., the Houma-based fabricator of offshore drilling platforms? Investors in the company’s stock enjoyed watching their shares more than double in value during the past year.

Take another example from the oil field: Shares in oil field services company Superior Energy Services Inc. soared 82 percent during the period.

Ricchiuti says Louisiana companies in the energy sector have benefitted from “much higher oil prices” than
a year ago.

He says companies in some other sectors have done well based either on upturns in their particular markets or on efficient management that buoyed returns even if sector conditions were difficult.

Ricchiuti keeps close tabs on Louisiana public companies through the Tulane program known as Burkenroad Reports. Both graduate and undergraduate students in the university’s business school may participate in the program, where they learn the fundamentals of stock analysis by examining area companies closely.

Burkenroad researchers assigned to a particular company study its operation and its position relative to competitors within the same industry. They visit the company’s headquarters and interact with top management. They examine historical rates of return on the stock and study the factors that cause the stock price to move. Then they produce a lengthy report that analyzes the company’s financial performance relative to what they have learned about the business. The Burkenroad stock reports circulate throughout the nation’s investment community.

Stocks in the Burkenroad program also form the core of the Burkenroad Mutual Fund, which is managed by Hancock Bank. Investors in the fund enjoyed a return of better than 35 percent in the past year. To learn more about the fund, visit www.hancockhorizon.com or call Hancock Investor Services at (888) 346-6300.

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