Slow ride

The tepid growth of the Top 75’s market value reflects the recovery’s current sluggish pace.
By Erin Dunn

North Carolina’s largest public companies are growing — but at a much slower pace than recent years, data from Business North Carolina’s annual Top 75 ranking show. The median change in market value for the companies rose just 5%, a sharp contrast to the 20.2% increase in 2011 and a reflection of an economy that has been slow to add jobs or make steady steps to a full recovery. “It’s not been a strong year. There are some companies that are doing well and others that are struggling. It’s been spotty,” says Anthony Amoruso, an assistant professor of accounting at Elon University’s Martha and Spencer Love School of Business. He and colleague Neeraj Gupta, an assistant professor of finance, compiled the list, which is based on market value June 30.

After plummeting during the Great Recession, the stock market has mostly corrected itself, making yearly comparisons tougher, Amoruso says. “The market is getting its feet. I really see the first two years of stock-market returns after the big crash as being unnaturally high.” The performance of the state’s 75 largest public companies narrowly bested the S&P 500 index’s 3.1% rise since its close on June 30, 2011, but only 38 improved their market values — compared with 51 in each of the previous two rankings. “I think stocks are still overvalued slightly,” Gupta says. “We’re just coming back to fair value.”

It was a mixed bag for many industries, including the finance, pharmaceutical and industrial manufacturing sectors. North Carolina’s largest public company, Charlotte-based Bank of America Corp., continued to lose value, dropping 20.6% during the 12 months. The list’s greatest gainer, Asheboro-based FNB United Corp, showed a dramatic increase in market value because of a reverse stock split and recapitalization. “Even though we have it as a big mover, shareholders have been totally destroyed,” Gupta says. Raleigh-based drug maker Salix Pharmaceuticals Ltd. offered the best five-year return at about 332%. Three pharmaceutical companies — including Salix — and three financial-services firms made the top 10 for best one-year returns.

Download a full list of the Top 75 here.