Some Arkansas stocks see huge gains after Trump win

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Publicly-traded companies based in Arkansas have seen nearly across-the-board equity gains amid a huge surge by the Dow Jones Industrial Average and other major indices in the week following the historic presidential election of businessman Donald Trump.

Although pre-market trading pushed U.S. markets deep into negative territory on Nov. 7, the day before Trump won the race for the White House, by the time most Americans had awakened to hear the news of a GOP victory, most American stocks had fully recovered and added billions of dollars in wealth to the portfolio of U.S. shareholders.

Among Arkansas stocks, the state’s three largest publicly traded banks saw huge gains in market capitalization since the opening bell on the morning after Election Day. The biggest gainer has been Little Rock-based Bank of the Ozarks, whose stock price has jumped nearly 23.5% during the week of Nov. 8 to Nov. 15, and added another $1 billion in market capitalization to the company’s bottom line.

At the end of business on Nov. 15, the fast-growing Arkansas regional bank’s market cap, which is the value of the company’s 121.1 million outstanding shares at the share price of $45.82, exceeded $5.5 billion. A week before, Bank of the Ozark’s share price closed at $37.09, putting the Arkansas financial giant’s market cap at $4.49 billion.

Trading interest in Home Bancshares Inc., parent company of Centennial Bank, has also lifted the Conway-based banking group’s shares more than 17% in the week following the election. That robust gain has moved the regional bank’s market cap from $3 billion to $3.62 billion in the week after Trump’s historic win.

Pine Bluff-based Simmons First National Corp., holding company of Simmons Bank, was not a slouch either in the week following the election. The smaller rival to Bank of the Ozarks and Home Bancshares saw its shares jump 17.8%, rising from $50.10 to $59 per share at the close of the Nov. 15 session. That stock gain has grown the community banking giant’s market cap by nearly $300 million to $1.84 billion.

Other key sector winners during the post-election week are in Arkansas’ trucking industry, where ArcBest Corp. of Fort Smith, Lowell-based J.B. Hunt Transport Services, and thinly traded USA Trucking Inc. of Van Buren saw strong stock gains. J.B. Hunt, one of the nation’s largest trucking firms, has been on an upward trajectory since the beginning of November, rallying 13.6% to close on Nov. 15 at $91.34, less than a dollar off its 52-week high. With nearly 112.2 million shares outstanding, the trucking firm’s market cap now tops the $10 billion mark.

ArcBest has also touched its high mark this year of $29.95 in the week following the election, breaching the 52-week mark in the Nov. 15 session before settling at $29.45. Since Nov. 1, the Fort Smith trucking firm’s stock has spiked nearly 50% and put an additional $240 million in market cap on the company’s balance sheet.

Other winners since the Nov. 8 election include Murphy USA Inc., Dillard’s Inc., Bear State Financial, America’s Car-Mart, Deltic Timber, Murphy Oil Corp., which all have seen parallel double-digit gains in share price and market value between 10% and 15%. 

Small Gainers, Declining Shares
Results in the week following the election for Arkansas’ two largest companies, Bentonville-based Wal-Mart Stores Inc. and Tyson Foods Inc. of Springdale, were mostly mixed. Walmart, the world’s largest retailer, closed Nov. 15 up 2.3% at $71.42, which put the company’s market value at nearly $221 billion.

On the other hand, Tyson Foods shares lost ground by 2.1%, falling from $70.30 per share on Nov. 8 to $68.80 per share at the close of the bell on Nov. 15. That still puts the market cap value of Arkansas meat and protein giant at a tidy $25.3 billion.

Post-election results from Little Rock data technology firm Acxiom Corp. were lukewarm compared to other Arkansas publicly-traded concerns. The Little Rock company’s shares rose 4.1% in the week after the election to close Nov. 15 at $26.76, putting the market cap at just over $2 billion.

The clear losers of the post-election week were Little Rock’s Windstream Holdings and its spinoff, Communications Sales & Leasing Inc. On Nov. 14, CS&L posted a third-quarter loss of $4.1 million, and its share price struggled to keep pace with the overall market. The Arkansas real estate investment trust’s share closed Nov. 15 at $24.13, down nearly 12% from the previous week.

Windstream, which reported a third-quarter loss of $66 million and a $1.1 billion merger with Atlanta-based Earthlink on Nov. 7, the day before the presidential election, closed Nov. 15 at $7.07, up eight cents. The company’s stock has remained mostly flat in the week following the election, closing the Nov. 15 session with a $680 million market cap. That put the value of the shares well below its offspring CS&L, whose market cap now stands at $3.71 billion.

National Markets, Continued Trump Concerns
Overall, the Dow Jones is looking to breach the 19,000-point level, rising 590.64 points, or 3.2%, since Trump won the race to the White House. The nation’s blue chip index on Nov. 15 stood at 18,923.06 and looks to extend gains into the holiday season.

The S&P 500 has also continued its post-election run-up, rising 1.2% to 2,180.39 in the week following the election. That rally pushed Deutsche Bank analysts to raise their year-end target for the S&P to 2,200, up from the previous forecast of 2,150. The tech-heavy Nasdaq stock exchange gave back most of its post-election gains in the week following Trump’s victory, rising only 0.5% at 5,275.62.

Despite the strong rebound of U.S. markets following the post-election, pre-market collapse, some market watchers are still wary of a Trump presidency, especially on issues of free trade and tax reform. Some Wall Street analysts hope to get a better read on the prospect of a Trump presidency in the weeks ahead before he takes office in early 2017.

In a recent report, Fitch Ratings said President-elect Trump’s Medicaid and trade policy proposals would significantly lower federal transfers to state budgets and could negatively affect economic growth and revenues if they are implemented.

“Trump’s infrastructure spending proposals could benefit state and local governments, but details remain unclear. The most detailed infrastructure policy plan from Trump’s campaign relies on federal tax credits to encourage private investments in revenue-generating projects,” Fitch said. “More clarity will be needed on how non-revenue-generating projects will be financed as the opportunities for investment in user-fee-supported infrastructure will be only a limited subset of the overall need.”

On Trump’s international trading agenda, Fitch said the incoming president’s proposals could have adverse implications for U.S. investment and growth and push up prices, particularly in the event of foreign counter measures or “currency wars.”

“Independent economic analyses suggest they could disrupt supply the chains of U.S. manufacturers. This could be most challenging for businesses in southeastern states that have benefitted from recent job growth in the automotive and aerospace industries. If economic growth slowed, or reversed, state and local tax revenues would follow suit,” Fitch forecasted.

The Wall Street rating service added: “However, the direct implications of the President-elect’s trade plans are difficult to assess as the U.S. has never left an international trade agreement and has not implemented tariffs of this suggested magnitude since the Great Depression.”