Shares of Zoltek Cos. and MEMC Electronic Materials Inc. continued to soar in the year's first quarter after each company saw rising demand for its products from the renewable-energy market. The pair led all St. Louis area companies in gains for the quarter.
Overall, St. Louis stocks provided a decent gain for investors. The 45-company Bloomberg St. Louis stock index total return for the quarter was 4 percent. By comparison, the Standard and Poor's 500 index had a total return of 1 percent.
In the quarter, Zoltek's stock rose a whopping 77.6 percent to close at $34.93. Zoltek began to soar in mid-February, after the company reported first-quarter sales of $30 million, doubling its sales from the year-ago period. The Bridgeton-based carbon-fiber producer said sales should continue to grow as the wind-energy market propels demand for its lightweight material.
Zoltek's shares spiked again in mid-March when analysts got word that the company could be near a significant contract extension with Denmark-based Vestas Wind Systems A/S, the world's largest producer of wind turbines.
Zoltek's chief executive, Zsolt Rumy, said the company's production capacity will increase by 5 million pounds, to 19 million pounds total, in the next few weeks as one of its facilities in Hungary expands.
Explaining the market's positive reaction to the company, Rumy said: "Nobody is doing the expansion we're doing and (has) the capability of volume we do."
Zoltek wasn't the only local beneficiary of the growing demand for green energy.
St. Peters-based MEMC's stock rose 54.8 percent, to $60.58, for the quarter as analysts saw demand in the semiconductor market expanding to feed production of solar-energy cells.
Near the quarter's end, Deutsche Bank analyst Steve O'Rourke raised his target price for the stock, to $65 from $55. In his report, O'Rourke anticipated a strong market "for at least the next few quarters" and said "MEMC's cost-reduction efforts should support margins."
MEMC also impressed the market with fourth-quarter sales of $415 million, topping its target of $410 million.
On the other end of the spectrum, Insituform Technologies Inc. of Chesterfield saw its share price drop by nearly 20 percent in the quarter to $20.79, the sharpest decline of any St. Louis company.
Insituform's stock stumbled after its fourth-quarter earnings hinted of troubles in its tunneling division. It plunged on March 29, when the sewer pipeline-repair company announced it was selling its tunneling unit on its belief that U.S. public spending on sewers has gone stagnant.
The same day, Stifel, Nicolaus & Co. analyst Jeffrey Beach downgraded the firm's rating on Insituform to sell from hold. The firm had been projecting growth of 6 percent in sewer pipeline-rehabilitation revenues for Insituform until the company released its grim prognosis.
Earth City-based Young Innovation Inc. slipped 18.3 percent to close the quarter at $27.22. Besides reporting disappointing earnings during the quarter, Young, a dental products and supply company, said it needed to invest more money in product development, which would hurt short-term profits.
Young also told analysts during a conference call in February that its 7 percent earnings growth last year was due primarily to the acquisition of Microbrush Inc., another maker of dental products.
Clayton-based Centene Corp, which fell 14.6 percent to $20.99, lost a Medicaid contract in Kansas and relinquished one in Missouri, and reported flat earnings.
Brown Shoe Co. announced good fourth-quarter earnings and declared a 3-for-2 stock split along with a 31 percent increase in its quarterly dividend. But the seemingly good news failed to support the stock price, which declined 12 percent to $42 for the quarter.
Analyst John Shanley of Susquehanna Financial Group wrote that despite the positive sales, his firm was concerned about a decline in wholesale sales and how that might affect the performance of the Clayton-based company.
Other local companies that did well included Town and Country-based Savvis Inc., which saw its share price rise 34.1 percent to $47.88 in the quarter.
Ralcorp Holdings Inc. shares rose 26.4 percent to $64.30 in the quarter, boosted by its purchase of private-label cereal maker Bloomfield Bakers. In mid-March, A.G. Edwards & Sons Inc. analyst Christopher Growe estimated the acquisition could add about $10 million to St. Louis-based Ralcorp's operating profit.
LOCAL GAINERS, LOSERS
Zoltek Cos. 77.6%
MEMC Electronic 54.8%
Savvis Inc. 34.1%
Ralcorp Holdings 26.4%
Reliv International 26.0%
Insituform Technologies –19.6%
Young Innovations –18.3%
Centene Corp. –14.6%
Brown Shoe –12.0%
Laclede Group –11.3%