A wise man once told me the stock market is not for the faint of heart. That advice rings particularly true when you look at the puzzling swings in stock prices for some former Wall Street darlings in the electrical and distribution markets, and on the flip side, the thrilling ride some other publicly held electrical companies now enjoy.
Only 12 of the 48 electrical manufacturers, distributors and contractors that Electrical Marketing tracks are outpacing the solid performance of all three of the overall stock industry averages year-to-date: the Dow Jones Industrial Average (+10.9%); NASDAQ Composite (+17%); and S&P 500 (+9.5%). Five of the twelve companies beating these indicators are in either the fuse or lighting markets – Mersen (+64.6%); OSRAM Licht AG (+43.9%); Philips Lighting NV (+29.9%); Revolution Lighting (+29.7%); and Littelfuse (+21.7%).
On the flip side, as you can see in the chart on page 2, some companies with stellar stock performance over the past five years are having a tough go of it in 2017 — Acuity Brands (-16.8%); WESCO International (-22.8%); and W.W. Grainger (-29%). There’s plenty of speculation about why many blue-chip companies in EM’s listing of publicly held electrical manufacturers, distributors and contractors are singing the stock market blues this year and are lagging the Dow Jones, NASDAQ and S&P 500. On the distribution front, some stock analysts have voiced their concerns that Amazon will obliterate the distribution space the way it has blown through the retail market. Others aren’t happy with the lack of movement in Washington, DC, on infrastructure legislation, and have tempered their expectations for construction-oriented stocks.
Notes: Prices from closing on 8/8/17 as reported at Yahoo Finance; *Euros, **British pence