Disappointing fourth quarter undoes otherwise banner year
Three strong quarters were undone by a pitiful fourth for most of Oklahoma’s publicly traded companies. As markets closed Monday, all but six companies had losses in stock prices compared to the end of 2017. Paycom Software Inc., OGE Energy Corp. and ONE Gas Inc. were the most improved companies that remained publicly traded at the end of the year. Paycom led the way with a 52 percent increase, despite a $32.96 per share loss over the course of the fourth quarter. “This was a Jekyll and Hyde year,” said Jake Dollarhide, president of Longbow Asset Management Co. in Tulsa. “This was a historic year.” This year saw the departure of Oklahoma City-based Sonic Corp. from the list of publicly traded companies after it was acquired by privately held, Atlantabased Inspire Brands Inc. The acquisition closed Dec. 7 and included the purchase of shares at $43.50 apiece, a 58 percent increase from the end of 2017. “There was a lot of consolidation nationally with restaurant stocks this year,” Dollarhide said. “There were a number of fast food and fast casual chains that were taken out by private equity. I think we will continue to see more in the years to come.” While Paycom’s annual change was mathematically less, it led active publicly traded companies by a large margin. The company posted a 52 percent increase, with the second closest being OGE Energy Corp. at nearly 19 percent. “Paycom is one of the few pure tech stocks in our group,” Dollarhide said. “While the fourth quarter tech cooled off quite a bit, it wasn’t enough to derail its strong start to the year. They were growing like gangbusters.” Oklahoma City-based Paycom provides cloud-based human capital management software. “The digital transformation of the human capital management industry continues to progress, and organizations across virtually every industry are recognizing the power they gain in giving their employees a direct relationship with their HR and payroll software database,” Paycom CEO Chad Richison said in a statement. OGE Energy Corp. was the only other company with a positive double-digit percent change. It closed the year at $39.18 a share and was the only company in the state, excluding Sonic, to increase value in the fourth quarter. The company’s share price increased $2.93 in the final quarter of the year, about an 8 percent increase. The remaining three companies to show an increase in stock value over the course of the year were energy companies, though the year was not great overall for the industry. One Gas Inc., ONEOK
Inc. and Matrix Service Co. increased 8.7 percent, 0.9 and 0.7 percent, respectively.
Most energy companies showed a loss in value over the course of the year, with Blueknight Energy Partners LP, Laredo Petroleum Inc. and Sand Ridge Energy Inc. suffering the steepest
stock price declines in the state.
“2018 started out with so much hope for the energy sector,” Dollarhide said. “The energy sector has gotten killed, just steamrolled by the retreat in energy prices, most notably the prices of oil.”
Blueknight Energy Partners lost 77 percent in value per stock, closing the year at $1.15 a share. Laredo lost nearly 66 percent, closing the year at $3.62 and Sand Ridge
lost nearly 64 percent while closing at $7.61.
“It was a rough 2018 for Blueknight as the last quarter their year-overyear operating income was sliced nearly in half as they have too much debt, insufficient cash flow and, like most everyone, were caught off guard by the late year contraction of crude oil prices,” Dollarhide said.
The disappointing end for stock prices of Oklahoma’s publicly traded
companies shouldn’t hinder optimism for the coming year, according to Dollarhide. Investors could even find stocks that interest them for a discount.
“I still think there is a lot of cash on the sidelines, so assuming people still have cash to put to work, put it to work a little at a time,” Dollarhide said. “If there is a company you liked earlier in the year, go look at it now, it’s probably 40-50 percent lower.”