Arkansas-based stocks rally in the third quarter

Arkansas stocks finished the third quarter with a September rally, but still have not fully rebounded from a brutal first half of the year that included heavy market losses, sagging consumer confidence and a lukewarm jobless economy.

Still, 13 of the 16 stocks monitored by The City Wire gained ground to their closing stock prices on July 1. Also, 11 of the 16 stocks have posted price gains during the first nine months of the year.

Two of the state’s largest companies, Fortune 100 concerns Wal-Mart Stores Inc. and Murphy Oil Corp., emerged as the clear winners with impressive moves upward in the three month period ended Sept. 30.

Murphy saw the biggest jump in the third quarter, rising 26.5% to $61.91 at Thursday’s closing bell. On Friday, the El Dorado-based oil giant kicked off the fourth-quarter in spectacular fashion by touching a 52-week high of $62.65 in intraday trading before settling at $62.14 at the closing bell.

Murphy Oil’s third quarter stock-price rally coincided with a similar run-up in international crude oil prices. Crude-oil futures ended at a seven-week high on Friday, closing at $81.58 a barrel on the New York Mercantile Exchange — the highest close for crude oil since Aug. 9, and the first settlement above the $80 mark since Aug. 10.

Wal-Mart’s stock price also ended the quarter just off its 52-week high. The world’s largest retailer’s stock price closed at $53.53 on Thursday. The Bentonville-based retailer announced earlier in the week it had made a preliminary, non-binding proposal to acquire Massmart Holdings Ltd., one of the largest distributors of consumer goods on the African continent. If completed, the deal would be the retail giant’s largest acquisition in nearly a decade, and would represent the expansion of Wal-Mart’s footprint on six continents.

Besides Wal-Mart and Murphy, most Arkansas companies were lifted by a broad late third quarter stock market rally that included news that the U.S. economy was no longer in danger of a double-dip recession.

The National Bureau of Economic Research announced in late September that the U.S. recession ended in June 2009, stoking the current investment frenzy in U.S. equities and improved earnings for American companies.

For example, although Tyson Foods’ stock closed at the end of the third quarter 37 cents lower than the previous three-month period, the Springdale-based meat giant has reported record earnings for the year. Tyson COO Jim Lochner recently told Wall Street that the company’s record earnings this year should not be considered a peak, but rather what investors may expect from the company in the foreseeable future, barring any catastrophic market conditions.

"In the first nine months of fiscal 2010, we’ve had the best performance in Tyson history and expect it to remain strong," Lochner said during the Barclays Capital 2010 Consumer Conference in Boston on Sept. 8. "However, we don’t view this as a peak year. The fine tuning we’ve done and will continue to do on our businesses better positions us to withstand difficult market conditions and capitalize on favorable ones to achieve steadier, more sustainable earnings."

Besides Tyson Foods, Wal-Mart and Murphy Oil, other Arkansas public traded concerns that serve as market bellwethers also benefitted from the broad late-September market rally. Little Rock mall retailer Dillard’s Inc., Fort Smith industrial manufacturer Baldor Electric Co., and trucking giant J.B. Hunt Transport have all seen upward movement in September.

Baldor closed at $35.08 on Aug. 31; however, the Fort Smith motor parts manufacturer closed on Friday at $40.38, a notable 15% gain over the last 30 days. Dillard’s September run-up pushed the company’s stock price up more than 8% over the past 30 days, from a close of $21.87 on Aug. 31 to a Sept. 30 close of $23.64.

Arkansas’ smaller companies also ended the quarter with a flourish, led upward by Bentonville’s America’s Car-Mart and regional financial concerns Bank of the Ozarks of Little Rock and Pine Bluff-based Simmons First National. Other quarterly winners included Acxiom Corp., Deltic Timber and Windstream Corp., which continued on its buying spree with a mid-August deal to acquire certain assets of Kansas-based Q-Comm Corp.

Even the two Arkansas trucking concerns that lost ground during the quarter — USA Truck Inc. of Van Buren, and Tontitown’s P.A.M. Transport — are heading into the last three-months of the fiscal year on a hot streak. Investors snapped up shares of USA Truck in September, boosting the company’s shares nearly 15% from $13.24 on Aug. 31 to Friday’s closing price of $15.22. Still, the Arkansas truckload carrier’s shares are well off its 52-week high of $18.79 and its stock price of $16.08 at the beginning of the quarter.

P.A.M. shares have risen 10.3% from $11.21 to $12.37 in the past month, but well off the northwest Arkansas trucking firm’s yearly high of $18.60.

Among Arkansas’ 16 publicly traded concerns monitored by The City Wire, only Home Bancshares’ stock price has lost ground in the past month. Since the beginning of August, downward pressure on the Conway regional bank’s shares have erased nearly $90 million of the company’s market value. Altogether, the Arkansas bank’s shares have fallen nearly 17% in the last 60 days, from $24.57 to Friday’s closing price of $20.46.

Despite a recent sell-off of the Arkansas bank’s shares, company officials opened the fourth quarter with a surprise announcement that Home Bancshares is acquiring yet another failing Florida bank. On Friday, Home Bancshares’ subsidiary Centennial Bank acquired all the deposits, substantially all of the assets, and certain liabilities of Wakulla Bank, based in the Tallahassee metro area. Wakulla Bank is the 128th FDIC-insured institution to fail in the nation this year, and the 25th in Florida. The deal is the fifth FDIC-assisted thrift that Home Bancshares has completed this year.

Arkansas stocks will kick-off the third quarter earnings reporting period in mid-October. Bank of the Ozarks is expected to release its quarterly report on Oct. 13, followed by J.B. Hunt and Simmons First National on Oct. 14 and 15, respectively.