Steel, energy stocks top regional performers in 2016

Steel and energy stocks, which had been losing propositions in the recent past, rebounded in 2016, generating some of the most generous returns for investors in regional companies.

AK Steel [ticker: AKS], which has major operations in Butler, topped the list, delivering a 355.8 percent return for owners of the West Chester, Ohio, steel producer.

The second best performer in 2016 was Pittsburgh-based U.S. Steel [ X], which generated a return of 319.6 percent.

Return figures are based on how much a stock’s price went up or down over 2016 as well as dividends a company paid.

A rising tide of cheap imports had sent steel stocks slumping in prior years, making AK Steel the seventh worst performing regional stock in 2015 (-62.3 percent return) and U.S. Steel the fourth worst (-69.8 percent return).

But imports subsided last year after the steel industry lodged unfair trade cases against foreign producers. That raised prospects for steel stocks. AK Steel and U.S. Steel shares had more than doubled before Donald Trump’s election brought a surge of optimism to the industry. They rose another 68 percent and 57 percent, respectively, from the Nov. 8 election until the end of the year.

Over the same time period, the Standard & Poor’s 500 index rose 5 percent. For all of 2016, the S&P 500 rose 9.5 percent, generating a total return of 12 percent.

Cecil-based Consol Energy [ CNX] turned in the third best performance after being the worst performing regional stock in 2015. The energy producer delivered returns of 131.1 percent, buoyed by its strategy of divesting coal operations and strengthening its balance sheet.

Joy Global’s [ JOY] status as the fourth top performing regional stock was cemented when the Milwaukeebased heavy equipment maker received a $28.30 per share buyout offer from Komatsu America. It was a remarkable turnaround for Joy, which was the second worst performer in 2015.

The other Top 10 performing stocks were rail and utility industry supplier Koppers Holdings [ KOP], up 120.8 percent; Cecil-based Rice Energy [ RICE], up 95.9 percent; Carnegie-based steel industry supplier Ampco-Pittsburgh [ AP], up 69.8 percent; Pittsburgh tool maker Kennametal [ KMT], up 68.5 percent; Lawrence communications and information technology equipment provider Black Box [ BBOX], up 65.4 percent; and Cranberry safety products maker MSA Safety [ MSA], up 63.8 percent.

2016 was generally a good year for the stocks of companies with a major presence in the region. Forty-four of the 53 stocks in the Post-Gazette/ Bloomberg index of regional stocks registered gains for investors last year vs. only 15 in 2015.

Trouble continued in 2016 for GNC Holdings [ GNC], the region’s worst performing stock. After generating a -32.8 percent return in 2015, the Downtown vitamin and nutrition supplement retailer delivered a -63 percent return last year. The Pittsburgh company’s problems include brisk competition from internet retailers and brushes with regulators over product labeling. GNC’s recovery measures include ousting CEO Mike Archbold, launching a new customer loyalty program, and an ad during the Super Bowl broadcast Feb. 5.

Grocery store operator and supplier Supervalu [ SVU] turned in the second worst performance, generating a -31.1 percent return. The Eden Prairie, Minn., company, which

supplies Foodland and Shop’n Save stores in the Pittsburgh region, faces challenges from expansion-bent grocers and shrinking margins caused by falling food prices.

Shares of Mylan [ MYL] were already down 10 percent by mid-August when the generic drug maker began facing scrutiny over escalating prices for its EpiPen, an auto-injector used to treat severe reactions to food allergies and bee stings. The drum beat of protest continued through December, when Mylan became one of six drug makers sued by attorneys general from 20 states for allegedly conspiring to fix drug prices. Investors in the drug company, which is based in the Netherlands but operates out of Cecil, ended 2016 with shares that were worth 29.4 percent less than they were at the start of the year.

The ExOne Co. [ XONE] disappointed investors again in 2016. Shares of the North Huntingdon 3-D printing concern slid 7 percent last year, not as onerous as the stock’s 40.2 percent drop in 2015. But in a year when most regional stocks advanced, ExOne turned in the fifth worst performance.