Most Arkansas stocks rally in the third quarter despite a rough ride through 2016

2016 may be one of the most volatile in the past decade for investors. In a near-zero percent interest rate climate, investors are chasing yield in the equity market, which helped feed the bulls.

But at the same time, recessions across Europe, slowing in China, deflation in oil and stronger U.S. dollar has financial markets on edge day-in and day-out.

Many consumers have their retirement accounts invested in mutual funds, which had mostly had a rotten year until a rebound in the third quarter. Earlier this year Goldman Sachs reported just 16% of large-cap mutual funds had outperformed the basic market benchmarks in 2016. The investment firm said the 16% rate was approaching historically bad levels of performance.

More recently Goldman said about 60% of mutual funds had beaten benchmarks in the third quarter. There are 7,671 mutual funds, including 4,783 which invest in stocks. There were more than $13.6 trillion invested equity-based mutual funds during the third quarter.

BENCHMARKS
Looking at the broad indices of the S&P 500 and NASDAQ gains have been made, lost and mostly recouped as the third quarter ended on Sept. 30. The S&P 500 opened the year at 2012.66, when markets closed on Friday (Sept. 30) the index stood at 2168.20, a gain of 7.72%.

For the third quarter the S&P 500 gained 3.1%, below a 9.25% return for the NASDAQ over the same quarter. Seven of the 17 Arkansas-based stocks outperformed the NASDAQ results in the third quarter – P.A.M. Transport, ArcBest, America’s Car-Mart, Simmons First National Bank, Tyson Foods, Acxiom and Windstream Holdings. About 41% of the Arkansas-based companies beat the NASDAQ benchmark in the third quarter. Home Bancshares and Bank of the Ozarks beat the S&P benchmark in the third quarter, but didn’t quite hit the 9.25% level of the NASDAQ.

The Dow Jones Industrial Average stood at 17,148.94 on Jan 4, and closed at 18,308.15 to end the third quarter for a nine-month gain of 6.76%. The Dow Jones Index began the third quarter at 17,949.97, rising 2% through the quarter. Wal-Mart Stores is a component of the Dow and over-performed the index for the nine-month period, but underperformed for the third quarter.

• Wal-Mart Stores Inc. (NYSE: WMT)
Wal-Mart shares opened the year at $59.96, closing Sept. 30 at $72.12 for a nine-month growth rate of 20.28%. Third quarter results were flat for the retail giant’s stock. Shares opened the quarter at $72.31 on July 1, peaking in mid August at $75.19 before closing the quarter at $72.12.

Wal-Mart will report earnings Nov. 17. Wall Street expects lower profits from a year ago at 96 cents per share on revenue growth of 1%. Wal-Mart has disclosed lower profits this year in light of the $2.7 billion it has invested in higher wages and training as well as $2 billion in e-commerce infrastructure.

• Dillards (NYSE: DDS)
Little-Rock-Based retailer Dillards has not had a good year. The stock opened the year at $65.74. Shares peaked in late March at $87.53 before plunging to $54.21 in mid-May. Dillard’s stock closed Sept. 30 at $63.01. Year-to-date, Dillards shareholders saw their value drop 4.15%.

To start the third quarter shares opened at $60.79. The third quarter results improved 3.65% heading into the busiest season of the year for retail. Dillard’s will report earnings in mid November. Wall Street expects earnings to come in below last year and revenue to dip 2.9% year-over-year.

TRANSPORTATION TROUBLES
The Dow Jones Transportation Index opened this year at 7352.59. The index closed Sept. 30 at 8,078.79, a 9.87% gain for the 9-month period. For the third quarter the index ranged from 7557.62 to 8,078.79 resulting in a net return of 6.89% over the past 90-day period.

Transportation companies based in Arkansas have had rough ride through much of this year. J.B. Hunt Transport is the only company to outperform the Dow Jones Transportation Index for the full nine months of 2016. That said, Hunt fell behind the index in the third quarter. P.A.M Transportation, USA Truck and ArcBest did not come close to the index results as each of the carriers saw share prices fall over the past nine months.

• J.B. Hunt Transport Services Inc. (NASDAQ: JBHT)
Lowell-based J.B. Hunt Transport Services stock closed the third quarter at $81.14. The shares have been consistent throughout most of this year opening Jan. 4 at $70.66. For the first nine months of this year, JBHT shares rose 14.83%.

Shares opened the third quarter at $81.80, sliding back in recent days from concerns over compressed margins in three of its four operating segments including its intermodal business. JBHT investor returns were down 0.8% in the third quarter. J.B. Hunt will report earnings on Oct. 17. Analysts expect the company to earn $1.03 per share, compared to 99 cents a year ago. Revenue is expected to grow 5.90% to $1.68 billion for the quarter.

• P.A.M. Transportation Services (NASDAQ: PTSI)
P.A.M. Transportation Services shares have had a tough year. Shares opened the year at $26.14, topping out in March at $31.53 per share. Through the full nine months of the year, P.A.M. investors saw share prices plunge 23.4% as the stock closed out the third quarter at $20.02.

The carrier saw earnings improvement through June which helped shares rebound from a low of $15.14 at the end of June. P.A.M. shares were trading at $16.20 to start the third quarter. In the past 90 days shares are up 23.5%. P.A.M. is expected to report earnings between Oct. 24-28. Analysts expect net income of 63 cents per share, flat with a year ago on revenue of $99.5 million.

• USA Truck (NASDAQ: USAK)
Van Buren-based USA Truck shares closed Sept. 30 at $10.24. Shares are down 41% from the Jan. 4 price of $17.39.

USA Truck shares slid sharply in early August on a second quarter loss of 15 cents per share. Revenue was also down year-over-year.  The financial results were impacted by deteriorating rate climate from hyper competition which hurt the top and bottom lines.

For the third quarter USA Truck shares traded from $17.50 on July 1 down to $10.24 on Sept. 30, losing 41.4% of their value in the recent quarter. The company will report earnings between Nov. 2-7 and analysts expect weak earnings of 14 cents per share on revenue of $105 million, falling 14% from a year ago.

• ArcBest Corporation (NASDAQ: ARCB)
Fort Smith-based ArcBest Corp. has also had a rocky year. Shares closed at $19.02 on Sept. 30, falling 7.89% since the start of 2016. ArcBest shares opened the year at $20.65, climbing as high at $23.01 by mid-March before retreating in mid-May.

To start the third quarter ArcBest shares were valued at $16.59 growing in value by 14.64% as of the Friday’s closing price. Shares continue to trade below their one-year target of $19.70.

ArcBest is slated to report earnings between Oct. 28 and Nov. 1. Analysts expect earnings to be down from a year ago at 47 cents per share. A year ago the company had net earnings of 74 cents per share. Revenue is expected to dip 1.9% to $695.6 million.

FINANCIALS
The financial sector overall has been volatile through the first nine-months of the year as several large banks have come under scrutiny and huge fines by regulators with the latest fears of looming troubles at Germany’s Deutsche Bank.

Arkansas bank profits continue to be decent but investors are cautious on the sector with half of the banks seeing share prices lower than when the year began.

• Home Bancshares (NASDAQ: HOMB)
Conway-based Home Bancshares traveled a bumpy road through the first nine months of 2016. Shares closed Sept. 30 at $20.81, up 8.27% from the $19.22 opening price on Jan. 4. For the third quarter the bank shares stood at $19.31 on July 1 rising to $23.50 in early September. For the full third quarter share values rose 7.76%.

Home Bancshares will report earnings on Oct. 20. Analysts expect net income of 31 cents per share, improved over the 26 cents earned a year ago. Revenue is projected at $126.05 million, up 17.10% year-over-year.

• Simmons First National Bank (NASDAQ: SFNC)
Simmons First shares closed the third quarter at $49.90, up 1.11% from the $49.35 opening price on Jan. 4. During the nine-month period the share price have ranged from a low of $38.30 in February rebounding toward the $50 level.

In the third quarter Simmons shares opened at $45.30, rising 10.15% in the last 90-day trading period. Simmons will report earnings between Oct. 20-24 and analysts expect 85 cents per share in net income, flat to a year ago. Revenue is expected to increase 1.7% to 103.9 million.

• Bank of the Ozarks (NASDAQ: OZRK)
Bank of the Ozarks shares opened the year at $47.76 closing Sept. 30 at $38.40 resulting in lost value of $9.36 per share, or 19.59%. The bank continues to report strong earnings and was tagged the top performing bank in its asset class in August by The Bank Director.

The bank’s share value rose 5.14% in the third quarter. Wall Street has a target price of $47 for OZRK. The bank holding company will report earnings between Oct.11-17. Analysts expect 60 cents a share, up from 52 cents a year ago. Revenue is expected to reach $203.5 million, buoyed from several acquisitions over the past year.

• Bear State Financial (NASDAQ: BSF)
Bear State Financial shares closed at $9.19 on Sept. 30. This brought the nine-month share valued down 11.63% from the start of 2016. In the third quarter BSF shares opened at $9.23 and staying relatively flat throughout the quarter.

The bank holding company will report earnings between Nov. 4-8. The thinly traded stock is not followed by any analysts.

• America’s Car-Mart (NASDAQ: CRMT)
America’s Car-Mart opened the year at $27.37 per share. Shares closed the third quarter at $36.39 for a total return of 32.95% through Sept. 30. The buy here, pay here used car dealer opened trading at $28.11 to start the third quarter. After better-than-expected earnings in August shares rallied to $41.40 on Sept. 1. Closing the quarter with a 29.4% gain over that 90-day period.

The company will report earnings in mid-November. Wall Street expects solid earnings of 49 cents per share, compared to 29 cents a year ago. Revenue growth is expected to top 3.2% at $137.3 million for the quarter.

FOOD AND FUEL
• Tyson Foods Inc. (NYSE: TSN)
Tyson Foods is having a banner year on the heels of its Hillshire Brands acquisition. The Springdale-based meat giant’s share price closed on Sept. 30 at $74.67, up a whopping 42.2% through the first nine months of this year.

In the third quarter shares rallied from $65.87 to a recent high of $76.76, before dropping back to end the quarter. The share price improved 13.35% in the third quarter. Analysts peg the one-year target price for Tyson shares at $82.20. Tyson will report earnings on Nov. 21. Wall Street is expecting $1.11 per share, compared to the 83-cents earned a year ago. Revenue is expected to be $9.4 billion, down 3.6% on lower meat prices worldwide.

• Murphy Oil Corporation (NYSE: MUR)
El Dorado-based Murphy Oil shares closed Sept. 30 at $30.40, an improvement from the $22 per share on Jan. 4. That’s a 38.18% gain in share value over the last nine-month period.

In the third quarter shares lost some ground from the $32.41 level on July 1. In the past 90-days Murphy shares are down 6.2%. Murphy Oil will report earnings between Oct. 26-31. Wall Street expects a 19-cent loss, with sales falling 29.4% from a year ago.

• Murphy USA Inc. (NYSE: MUSA)
Murphy USA of El Dorado is having a solid year of growth. Company shares closed Sept. 30 at $71.36, a gain of 17.4% from the $60.78 level the shares were trading on Jan. 4. For the third quarter the share prices lost some ground from $74.89 on July 1 the share price is down 4.71% over the past 90-day period.

Murphy USA will report earnings between Nov. 2-7. The street expects net income of $1.62 per share, improving from the $1.40 earned a year ago. Revenue is expected to drop 6.8% to $3.15 billion.

TIMBER AND TECHNOLOGY
• Deltic Timber Corporation (NASDAQ: DEL)
The construction sector is humming along nicely in 2016 and lumber giant Deltic Timber has benefited. Deltic shares closed the third quarter at $67.73, up 17.48% year to date. For the third quarter, the share price rose 1.91% from $66.46 on July 1.

Deltic will report earnings between Oct. 18-24. No earning guidance was found for the company. In its August earnings report the company said earnings are growing from improved operating margins.

• Axiom Corporation (NASDAQ: ACXM)
Axiom shares have been on a steady run closing Sept. 30 at $26.65, up 32.58% from $20.10 the opening price on Jan. 4. For the third quarter AXCM shares are up 20.53% over the past 90 days. The Little Rock-based tech company will report earnings between Nov. 2-7. Analysts expect 11 cents per share on revenue of $217.56 million. Net income is expected to be 21% lower than a year ago, but revenue growth is projected at 4.9%,

• Windstream Holdings (NASDAQ: WIN)
Windstream shares closed the third quarter at $10.05, up 77.87% from the $5.65 share price on Jan. 4. After a rough start the technology company seemed to find its bearings mid year while rallying in the past few weeks.

On July 7 Windstream shares were trading at $9.08. Over the past quarter the shares are up 10.6%. The company will report earnings between Nov. 3-7 and analysts expect 9 cents per share, on par with a year ago. Revenue is expected to dip to fractionally to $21.25 million.