Count Down

By Frank Maley

As the nation celebrated its 232nd birthday, many public companies around the state seemed locked in some kind of free-market limbo contest, with share prices dropping and lots of folks wondering how low they could go. Sixty of North Carolina’s 75 largest public companies lost market value in the 12 months that ended June 30 — and for 48 of those, the percentages ran into double digits. Last year, a market cap of at least $115 million was required to make Business North Carolina’s list of the state’s Top 75 public companies. This year, the bar is much lower — just $62 million, according to the ranking compiled by Sageworks Inc., a Raleigh-based developer of financial-reporting software.

It’s still not low enough for Winston-Salem-based Triad Guaranty. The mortgage insurer, which ranked 46th last year but has been hit hard by defaults and delinquencies, saw $595 million in market cap shrivel to about $15 million in 12 months. Management made plans to use its assets and employees to form a new company with New York-based Lightyear Capital as lead investor, but talks ended in June. Soon after, Triad Guaranty cut 100 of its 250 jobs and stopped writing policies. Those already in place should keep it in business at least seven years. The company is still exploring its options, CEO Mark Tonnesen says in a statement. “But we are not optimistic that any opportunities will surface.”

While much of the economy reeled from soaring fuel costs and sagging home prices, two Charlotte-based manufacturers boosted their market cap a third or more. SPX, a maker of industrial equipment, led all Top 75 companies with a 39% increase, and steelmaker Nucor wasn’t far behind at 33%. A weak dollar has helped manufacturers by making U.S. goods cheaper on the world market, says Michael Walden, an economics professor at N.C. State University. SPX, which gets more than half of its revenue from outside the U.S., has been helped by surging demand for its power transformers and other products; Nucor, by steel prices pushed up by rising worldwide demand.

But aside from those two and a handful of other Tar Heel public companies, the short-term outlook remains gloomy. “2008 is going to be a fairly weak year,” Walden says. “It’ll be ’09 before we see a rebound.”