dsmWealth February 6, 2020

A seasonally changing five-story photo and giant Claes Oldenburg trowel mark the downtown campus of Meredith Corp.

Iowa Stocks Showed Volatile Range of 2019 Market

BY STEVE DINNEN

Meredith Corp. shareholders took a beating in 2019 as the Des Moines-based media company shed nearly 38% of its value. That marked a second down year for the long-tenured company that anchors the west side of downtown, as its common shares shed 21% of their value in 2018.

Another media firm, Davenport-based Lee Enterprises, wasn’t far behind Meredith, with a 32.7% decline. Its shares also dropped in 2018.

These investor losses came during what otherwise was a very good year for the market as a whole, and a decent year for Iowa-based companies.

As references, the Dow Jones Industrial Average rose 22.34% in 2019, while the S&P 500 Index climbed 30.43%. Travel trailer maker Winnebago Industries Inc. blew completely through those numbers with a rise of 118%. It had some ground to make up, as its shares lost 56% in 2018. (Winnebago’s fortunes are closely tied to the ups and downs of the overall economy, and it is a volatile stock: Over the past 36 years, it has seen its share price drop by more than 50% in four of those years, while it has risen more than 100% five times.)

West Des Moines bank operator West Bancorporation bested both of those benchmarks as well. Its stock rose 34.2% in 2019, rebounding from a 24% slide the previous year.

NewLink Genetics, of Ames, is another volatile Iowa stock. The clinical stage cancer drug firm posted a 66% gain in 2019, fresh off a share-price decline of 81% in 2018. It currently sells for $1.97 a share, a bare whisper of the $54 it fetched in 2015.

Workiva, another Ames company, rose 17.6% on the back of an impressive 68% run-up in 2018.

In the insurance sector, there were mixed results. American Equity Investment Life Holding Co., of West Des Moines, posted a 7.12% gain in 2019. Just a few blocks west, at FBL Financial Group Inc., shares slid 10.2% after a 5.7% drop the year before.

The biggest Iowa insurer and diversified financial services firm, Principal Financial Group Inc., saw its share price rise 24.5%. That was a welcome rebound from the 37% loss it posted in 2018. Casey’s General Stores Inc. saw similar 2019 results, with shares rising 24%. This, after a 14.5% climb in 2018.

Analysts Cast Wary Eye on Key Iowa Stocks

BY STEVE DINNEN

Virtually all of the major companies cited today have hold recommendations on them from securities analysts. So if you own one, it’s OK to keep it. But if you don’t own it, maybe don’t buy it. Seeing a price target of $58 for Principal (current price, $54.05) CFRA analyst Cathy Seifert wrote that the company faces a "near-term margin compression"—lower profits, in other words—in its international unit that previously had been a source of growth. Seifert did tip her hat to Principal and its increased focus on fee-based, less capital-intensive asset gathering businesses.

Analysts rarely issue sell recommendations, but that’s the advice on Casey’s from another CFRA analyst, Arun Sundaram. Trading at $163.18 per share already puts Casey’s at the high end of its historical range, he wrote, and Casey’s faces headwinds by way of increased regulatory oversight over vaping and tobacco products (nearly 11% of revenues). It faces higher cheese costs, and increased operating expenses due to its second distribution facility in Indiana. Plus, people are driving less, and getting better mileage.

Interestingly, for beaten down shares of Meredith, there are not only four hold recommendations but four buys. The consensus price target is $30.50; it currently costs $31.97. Maybe these buyers are remembering 2008 and 2009, when Meredith stock plummeted 69% the first year, then skyrocketed 80% the next.

Wealthy Investors See No Stop to Bull Market

BY ERIC ROSENBAUM for CNBC

There were six new all-time highs for stocks in the first 12 trading days of 2020, putting the S&P 500 up close to 3% since the year started. After a 2019 in which the equity index gained over 30%, is it too much too fast?

Not according to hedge fund billionaire David Tepper. He may have used the wrong beast to refer to the raging bull market, but he told CNBC, "I love riding a horse that’s running."

He is far from the only one who sees no reason the relentless bull market has to end. A new survey of Americans with at least $1 million in a brokerage account and who trade stocks regularly on their own shows that the majority are upbeat on the U.S. economy and stocks. Just a quarter ago that was not the case. >> READ MORE

Top Investors More Bullish About Art than Stocks

BY JOYCE BLAY for Financial Advisor

High-net-worth collectors with money to invest remain bullish on the art market, according to the latest UBS Investor Watch Pulse Art report.

UBS surveyed 404 U.S. investors with $1 million in investable assets who had spent $10,000 or more on art or antiques in the past two years.

The New York-based financial services firm found that 68% of respondents were optimistic about the art market as a short-term investment, compared with 66% who felt the same over the short term about the global stock market. An even greater majority of respondents (72%) were optimistic about the art market over the long term, compared with the global stock market (70%).

A new generation of high-net-worth collectors is demanding more from their investment than just artwork they can hang on the wall or install in their living room, the report said.

UBS found that 59% of respondents—86% of them millennials, 52% Gen X, and just 18% boomers—said they were considering sustainable options in managing their art collections, such as recyclable packing and alternative delivery. >> READ MORE

Fact Check: 3 False Economic Claims from State of the Union

BY GINA HEEB for Business Insider

President Donald Trump seized on the U.S. economy in his third State of the Union address Tuesday, shifting focus to his strongest campaign pitch as his impeachment trial unfolded.

The president has steadily polled better on jobs and GDP than on his overall performance in office. And approval of his handling of the economy has only continued to climb, reaching all-time highs in recent weeks.

There are plenty of economic talking points for Trump to highlight: The unemployment rate is at its lowest level in 50 years, financial markets are hovering near record highs, and the administration is celebrating back-to-back trade deals with China and North American neighbors.

But Trump often supplements those facts with claims that are false or misleading. Here are three from Tuesday. >> READ MORE