Most Michigan-based stocks roaring back in 2023 after a brutal year
- Most Michigan-based public companies started the year with value declines after a bearish 2022.
- Big gainers so far this year: Wolverine World Wide, Ally Financial, Jackson Financial, Visteon and Penske Automotive
- Stocks that have slipped after big years include SpartanNash, Kellogg and Domino’s
Most of Michigan’s largest public companies rebounded early in 2023 after sustaining losses last year during the stock market’s worst annual performance in 14 years.
Nearly half of Michigan’s largest 33 companies tracked by Bridge Michigan in its Business Watch Economic Dashboard show double-digit percentage growth in stock value from Jan. 3 through March 2, as most reported their quarterly and year-end results.
During that time frame, gains of six of Michigan’s publicly owned businesses exceeded the S&P 500, a benchmark that tracks the stock price of 500 large U.S. companies and is a proxy for the market’s performance. The S&P 500 increased 22 percent.
- DTE Energy cut operations to meet profits months before power outages
- GM offers buyouts to ‘majority’ of 35,000 salaried workers in Michigan
- Michigan voters are skeptical of EVs and the value of college in new poll
However, moves in the market over the two-month period show some volatility, which continues into this week — as shown by the S&P 500 falling 7 percent from its peak in February through March 10, the day regulators closed Silicon Valley Bank, prompting regulator scrutiny as bank stocks gyrated.
Among the biggest gainers this year: the shoemaker Wolverine World Wide and auto lender Ally Financial, while food companies like Kellogg and SpartanNash cooled off after being among the top-performing Michigan stocks last year.
So far this year, the overall value of Michigan’s 33 largest stocks is 6 percent higher than at year-end 2022. That slim increase represents a gain of $26.4 billion in their combined value.
Here are more glimpses into Michigan’s public companies and their stock values, as of March 2:
Michigan companies showing the most stock growth:
Wolverine World Wide jumped 53.2 percent in the first two months of 2023 after dropping 63.2 percent over 2022. The Rockford-based apparel company that makes Merrell Shoes, among other brands, started what it called a 100-day improvement plan in late 2022 to get sales up as inventory backlogs grew. The company launched aggressive sales — and sold its Keds brand — while starting a “profit improvement office” that CEO Brendan Hoffman said would “unlock savings to support growth acceleration in our highest potential brands.” That includes, he told analysts, going back to the nautical core of Sperry instead of veering into other styles from the classic boat shoe.
Jackson Financial increased 30.30 percent. First-quarter dividends reached 62 cents per share, up 13 percent from the previous year, even as adjusted operating earnings declined. One sign of how interest rates are changing financial stocks comes from Jackson's annuity sales, at $3.2 billion and down one-third from a year earlier.
Three stocks with automotive industry ties also topped the early-year list: Visteon, up 27.7 percent; Penske Automotive (25.5 percent) and BorgWarner (24.9 percent.) Both Visteon and Penske were among the top Michigan-based stocks in 2022.
Sales increased 35 percent in the fourth quarter for Visteon, based in Van Buren Township, as the information display maker launched 45 products launched for 2023 and recorded $6 billion in new business in 2022. Some of the new business is attributed to contracts with a U.S. electric vehicle manufacturer.
Penske, based in Bloomfield Hills, reported record revenue for the fourth quarter at the transportation service provider that also sells autos and trucks. CEO Roger Penske told investors it was “driven by demand for new vehicles in both our automotive and commercial truck dealerships coupled with continued service and parts revenue growth and expense control.” On a same-store basis, fourth-quarter retail automotive new unit sales increased 11 percent, and commercial truck new units increased 36 percent.
At BorgWarner, the auto supplier will spinning out a separate company, which will take on all of its internal combustible engine fuel systems and aftermarket segments. The move will retain BorgWarner’s increasing focus on EV propulsion, drivetrain and air management systems.
Ally Financial, which climbed 22.9 percent, is the largest digital bank in the U.S. and among the largest auto lenders. The company wrote $46 billion in auto loans in 2022, with an estimated yield of 8.24 percent. However, the company also is expecting its net charge off rate — essential late and unpaid loans — to grow by 0.5 basis points by year-end, the Wall Street Journal reported.
Still more Michigan public companies recorded double-digit growth in early 2023, a timetable when many reported year-end results.
General Motors rose 15.2 percent as of March 2. However, that fell to about 12 percent overall on Thursday as Michigan’s top automaker announced that most of its 58,000 salaried employees — including 35,000 in Michigan — are receiving buyout offers.
No targets were announced, and the effort could precede layoffs. The staffing reduction is part of a $2 billion plan to cut costs this year and in 2024 as GM ramps up its electric vehicle production.
Others in the double-digits include two top public names from the Michigan-based bio-industry: Neogen (16.2 percent) and Perrigo (10.6 percent.)
Lansing-based Neogen merged with the former Food Safety Division of 3M. John Adent, Neogen’s president and CEO, told investors the division can expect growth over the coming years. At the company’s midyear in January, revenues for the Food Safety segment were $161.3 million, most attributed to the merger but also including 6.3 percent core growth.
Perrigo, whose U.S. operations are based in Grand Rapids, continues to capitalize on its infant formula production after last year’s contamination in Abbot’s Michigan plant. The private label health product maker set all-time net sales records in 2022.
Two west Michigan-based office furniture makers, MillerKnoll (13.6 percent) and Steelcase (11.4 percent) saw gains, three years after the pandemic turned workspace fundamentals upside down as companies and their employees embraced work-fr`om-home options.
Steelcase plans its fourth-quarter release on March 23, but in the third quarter showed a 16 percent drop in U.S. sales — yet a 19 percent gain in revenue, the result of higher prices.
MillerKnoll posted $16 million in net earnings for the fourth quarter of 2022, compared to a loss of $1.7 million a year earlier, when the company was adjusting to the mid-2021 merger of Knoll and Herman Miller.
Dow, at 13.5 percent, saw the stock gains as its three global business units fell 16 percent to 20 percent in sales. The drop was driven by reduced demand for packaging and declines in building and construction, Dow said in its most recent quarterly report. As a result, the company in January said it planned to shed 2,000 jobs.
Auto suppliers Lear and American Axle, both at 12.6 percent, also are traditional auto suppliers moving into the EV industry. Lear, based in Southfield, announced a new $80 million plant in north Oakland County’s Independence Township to build battery switches for GM. American Axle said its $750 million order backlog for the next three years is now 40 percent from EV business, up from 35 percent last year.
Michigan companies with the lowest stock gains:
The largest declines in stock value went to three companies known for recent peaks — including grocer SpartanNash, the Michigan-based stock with the biggest annual gain in 2022, when it jumped 20.8 percent.
Early this year, the company reported higher sales, driven by inflationary costs, even as the volume of sales dipped. It also is saving on some supply chain costs, but invested $3.6 million in a merchandising plan.
SpartanNash dropped 11.5 percent, bringing its market cap to $900 million, down from $1.1 billion.
Kellogg also was a top stock in 2022, gaining 10.5 percent value, in part as investors expected it to split into three businesses. It announced in February that it would no longer make its plant-based division, which accounts for about 2 percent of corporate revenue, a separate company. Instead, Kellogg will retain it, while still spinning off cereal.
Kellogg, the state’s fourth-largest company by stock value, dipped 7.5 percent, bringing its market cap to $40.3 billion.
Domino’s, the Ann Arbor-based pizza company, surged during the stay-at-home months of the pandemic. But by 2022, it was bracing for a delivery decline. Its stock dropped 15.1 percent early this year, to $305.32 a share — the highest price among Michigan-based stocks, representing nearly $2 billion less in overall value from its start in 2023.
CMS Energy, down 6.9 percent, and DTE Energy, down 6.7 percent, said they declined as residential energy use dropped in 2022 over the previous year. DTE is seeking a $622 million rate increase this year from regulators.
Both utilities ended 2022 with flat stock prices. Both also took hits after the late February ice storm that prompted lawmaker scrutiny.
DTE Energy fell to $106.86 on March 1, after it ended trading at $112.81 on February 22, the day the ice storm took hold. The 5 percent decline compares to a 7.1 percent drop for CMS Energy over the same time period.
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