Given the choice between planes and trains, the latter mode proved the superior vehicle in the first half of ”™08 ”“ as investments go, anyway.
As of last week, shares of Greenwich-based Genesee & Wyoming shares (NYSE: GWI) had rumbled up more than 60 percent on the year, hitting an all-time high of $42.54 on June 5 and after a short slump rebounding back above $40 last week.
Not bad for a company whose stock in trade is running short-line railroads, and whose $141 million in first-quarter revenue was up a mere 12 percent from a year earlier. Like industry bellwether CSX Corp., Genesee & Wyoming has benefited from demand for raw commodities like coal and grain.
The railroad”™s acceleration is in stark contrast to the stock performance of the majority of local companies, whose investors collectively yanked the emergency brake cord in the first half of 2008. Of 50 publicly traded companies with headquarters or large operations in FairfieldCounty, just 10 saw their shares appreciate through July 21.
Besides crimping the compensation and retirement wealth of local workers and retirees, such broad sell-offs can sidetrack companies from attempting to raise capital in the public markets or making stock-based acquisitions, in turn impacting Fairfield County”™s sizeable contingent of investment bankers, attorneys and accountants.
More than 20 local companies suffered at least a 20 percent drop in their shares through July, including Fairfield-based General Electric Co., the county”™s second largest employer with more than 6,000 employees; and Switzerland-based UBS AG, which has more than 4,000 employees in Stamford.
After UBS, Aircastle Ltd. suffered perhaps the most stunning freefall, as the jetliner leasing company”™s shares fell from $25 in January to under $8 in late June, before regaining some altitude by late July. In the first quarter, Aircastle revenue dropped by half from a year earlier to $67 million, though the company still managed to record a $22 million profit. A week shy of its August 2006 initial public offering of stock anniversary, Aircastle shares are trading at a third of their IPO value.
Shares were off 16 percent as well for Hartford-based United Technologies Inc., whose Sikorsky Aircraft Corp. subsidiary in Stratford is the biggest employer locally.
That about matched the fortunes of the S&P 500, which dropped 15 percent between mid-May and mid-July, reaching its lowest level in two years.
Some market watchers predicted financial stocks have likely reached rock bottom, and GE shares staged a mini-rally last week, after the company announced its Norwalk-based GE Commercial Finance division would set up an $8 billion joint venture with Dubai-based Mubadala Development Co., which indicated it would take a sizeable stake in GE as part of the deal.
After leading large local employers last year with a 52 percent gain, Danbury-based Praxair Inc. has held steady in 2008, with the industrial gas manufacturer”™s shares swelling an additional 4 percent. Just three other local companies managed the feat of stock gains both in 2007 and to date in 2008: materials vendor Crane Co. and World Wrestling Entertainment Inc., both based in Stamford; and survey company Greenfield Online Inc. of Westport, whose shares were boosted in early July after it announced it would be acquired by Quadrangle Group L.L.C.
