One man delivers two big Conn. stocks for the decade
On the Monday before Christmas Eve, it was just another delivery truck trundling through Bethel, emblazoned with the red letters “XPO” on a white background.
On the New York Stock Exchange, the letters signify something else for investors in it for the long haul — a massive return on shares they have held. The man behind XPO Logistics has delivered on the promise of his vision at the outset of the decade, as 2019 comes to a close.
With Jeff Bezos having produced the best investment returns of any U.S. company over the past 10 years via Amazon, Brad Jacobs foresaw the opportunity latent in a fragmented freight shipping industry needed to deliver on Bezos’ vision for home delivery of merchandise purchased online.
As the case with United Rentals — which Jacobs started in 1997 and led for a decade — Jacobs built XPO by acquiring other businesses. He started with Express1 Expedited Solutions in 2011, adding on more logistics and trucking companies unified under common management and dispatch.
From about $10 a share heading into 2010, XPO shares traded this Christmas Eve at $168, thanks to a major lift the past three months that still has the issue short of its alltime high in 2018 of $185.
Among western Connecticut corporations that have stayed independent as the decade comes to a close, only shares of United Rentals have performed better — and only slightly. Michael Kneeland led the Stamfordbased equipment rental giant most of the decade before stepping down this year.
“Ecommerce is still our largest and our fastestgrowing (business),” Jacobs said in October during a call with investment analysts. “It’s a sticky business because we do it really well, and these are customers that value service and speed and accuracy a lot.”
Stamford is also home to the thirdbest performing stock in the region in Charter Communications. Shares are up tenfold under CEO Tom Rutledge after his marquee acquisition in 2016 of Time Warner Cable, even as cable companies deal with the emerging threat of “overthetop” options like Amazon Prime, Hulu and Netflix.
Stock can fluctuate significantly from year to year — New Havenbased Achillion Pharmaceuticals led all area corporations in 2019 with a 300 percent gain — but over longer time frames reflect the stability of the performance of the underlying company. The inverse is true for lagging stocks, with a run encompassing an entire business cycle a good indicator of a struggling company.
In Connecticut, none have struggled more the past decade than Danburybased FuelCell Energy, which teetered on the edge of default last summer; and Norwalkbased Frontier Communications, whose former CEO Maggie Wilderotter took on billions of dollars in debt to acquire AT&T systems in Connecticut and Verizon systems nationally.
Both stocks are down more than 99 percent in the past decade to below the $1 threshold required to maintain their respective listings on the Nasdaq.
FuelCell installed board member Jason Few as CEO last September as the permanent replacement for Chip Bottone, who led the company much of the decade. Frontier cut ties this month with Wilderotter’s replacement Dan McCarthy, hiring former Dish Network executive Bernie Han as CEO.
Perhaps no stock has a bigger impact on local investors then General Electric, which has thousands of local retirees by virtue of its former headquarters in Fairfield and other Connecticut operations it has scaled back or sold off under former CEO Jeff Immelt.
Trading below $7 a year ago, GE shares are up about 60 percent in CEO Larry Culp Jr.’s first full year on the job as the replacement for Immelt’s successor John Flannery, but remain about 25 percent below the issue’s adjusted price at the end of 2009.
“This quarter, we held sessions with each of our businesses designed to answer two fundamental questions: What game are we playing? And how do we win?” Culp said in October. “From the inside, I’m seeing the improvements I wanted to see when we started on this path a year ago — improvements that will yield longterm results for all of GE stakeholders.”