Editor’s Note: A previously published version incorrectly listed the amount by which Investar Bank’s stock increased in 2016. The bank’s stock was up 11% for the year, as of Dec. 29. Daily Report regrets the error.
Stocks of Louisiana’s publicly traded companies had a mixed year in 2016, with bank stocks showing strong growth and most—though not all—energy services companies continuing to struggle through depressed oil prices.
Nationwide, the S&P 500 is up about 11% for the year. Most of Louisiana’s publicly traded companies outperformed that national average, according to Peter Ricchiuti, the William B. Burkenroad Jr. Clinical Professor in Tulane University’s A.B. Freeman School of Business.
“For Louisiana companies, the biggest story, I think, is the banks did unbelievably well,” Ricchiuti says. “And for the past couple of years they’ve been kind of dead in the water.”
Three Lafayette-based banks were particularly strong. Stocks of the holding companies of MidSouth Bank, IberiaBank and Home Bank are all up more than 50% for the year. Baton Rouge-based Investar Bank is up about 11%. Only First NBC in New Orleans was off—a whopping 80%—but that institution was plagued by financial and regulatory issues for much of the year.
Ricchiuti believes modest improvements in the price of oil this year have helped bank stocks. Lenders are starting to feel better about their energy loans, he says. Discussions in Washington about easing federal banking regulations, namely Dodd-Frank, have also likely contributed to investor optimism in the banking sector.
While the small uptick in oil prices may have helped Louisiana banks, several publicly traded companies in the energy and energy services sectors had another bad year. Lafayette-based Stone Energy was down more than 80%, while New Orleans-based Tidewater, which supplies offshore marine vessels, was off more than 50%. Hornbeck Offshore Services of Covington was also down 26%.
Some energy services companies defied the trend, however. Gulf Island Fabrication in Houma, for one, was up some 32%. Ricchiuti attributes it to the company’s lack of debt and its diversification.
“They are now building platforms for wind turbines out in the ocean,” he says. “They have some off the coast of Cape Cod. There’s a real need for this, and they’re filling a niche. It’s an amazing story.”
Two of Baton Rouge’s largest public companies also had a good year. H&E’s stock is up about 30% over last year, which Ricchiuti attributes to growth in the construction and industrial services sector. Meanwhile, outdoor advertising giant Lamar saw a 17% increase in its stock price.