Why Indiana stocks are lagging

March 10, 2010
Back to TopCommentsE-mailPrintBookmark and Share

Major stock indexes have enjoyed nice run-ups in the past year, but Indiana stocks aren’t keeping pace.

The Dow industrials are up nearly 60 percent since the trough in March 2009, and the S&P 500 has fared even better. The Bloomberg index of Indiana companies, though, is only 40 percent higher.

What gives?

Kevin Schmidt, executive vice president of City Securities Corp. in Indianapolis, says things aren’t as bleak as they look. As is usually the case during downturns, Indiana stocks didn’t sustain harsh shellackings. So they’re not bouncing back as quickly.

Schmidt also notes Indiana is heavily concentrated in financial and basic industries, where shares are struggling.

Consider banks. Several institutions in the Bloomberg index—First Merchants, Integra and Old National included—are midsize players. Investors are avoiding the class like the plague because it’s assumed they’re riddled with rotten real estate loans. Depending on the bank, that may or may not be true, but everyone is tarred nevertheless.

“They’re not bad companies,” Schmidt says of the Indiana banks. “They’re not going to go broke.”

Other Hoosier stalwarts, such as Eli Lilly and Co. and WellPoint Inc., are treading water.

The mediocre Indiana index also hides standouts. Interactive Intelligence has ridden the national swell in tech shares. Duke Realty and Simon Property Group have rebounded despite being in real estate. Cummins shares have nearly tripled.

Indianapolis-based Emmis Communications Inc., once so out of flavor that its shares might have been mistaken for dead, is booming, at least compared against itself. An investment in Emmis last summer would have reaped a four- or fivefold return by now.

Yet another factor hurting Bloomberg’s Indiana index is its weighting toward pricier shares. The state has a number of stocks trading at lower levels that have done remarkably well. Finish Line is one.

What are your thoughts about these stocks?

Also, to what extent should President Obama get the credit? The markets crumbled for a few months after his inauguration, but they’re back.

ADVERTISEMENT

Post a comment to this blog

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
  1. Choice between a democrat and a question mark? Take the question mark. We have all seen what the democrats will do.

  2. Its easy to blame workers. What about the Management of the Mill. Its not smart in business to not have a back up plan. Workers are afforded sick days in most cases. Union or not. Whether drunk partying, or a real sickness. Why would you as a businessman/woman not have a rotation of workers incase this happens. This is not an exclusive union protection. If the company can prove bad intentions on the part of any union employee. They can take action. Most CBA's have a 3 strike policy. Just like most Non-union company policies. You should read a CBA sometime. There are protections for companies too. Unions understand that businesses need to make money. If they don't, the union's member won't have a place to work.

  3. My kids play hockey on the North side and we have been very happy with the youth program. More Ice would create more opportunity for kids to pay this great sport. With 3 rinks that would also create more figure skating opportunities. What better gift to give your kids than a sport they will love!

  4. Naah, only Indy place fans were robbed of seeing Zanardi race. CART fans saw his amazing talents just about every weekend. And F1 fans saw him too. Zanardi didn't care he wasn't at Indy, neither do 99.18% of other race fans world wide. And CART fans are quite pleased of the domination of their drivers and owners have had at Indy, in the IRL, and in the current Indycar series....almost 99.18% of the time since 2000 Indy 500. I respect Zanardi, but his life goes on without Indy. Sucks to be you Capt.

  5. So let me get this right: gun permits online are fraud proof, but voting is as easy as 1-2-3.--But at least we agree that someone without a photo ID cannot be trusted with a gun.

ADVERTISEMENT