The best local stock to own last year spent almost the entire year in bankruptcy.
Investors fortunate enough to own AMR Corp. shares a year ago saw their investment grow more than 1,300 percent as the perceived value of the new American Airlines Group increased. Southwest Airlines also had a strong year as investors applauded the results of industry consolidation.
Other big gainers among shares of companies based in North Texas benefitted from improved consumer spending, a stronger housing market and higher oil prices.
1. American Airlines (AAMRQ, $11.39, +1,333%)
AMR shareholders started the year thinking their stock in the bankruptcy airline worth less than a dollar a share. But after the parent of American Airlines agreed to merge with US Airways, the value of AMR shares began to take off, producing a more than 13-fold gain for 2013 by Dec. 9, when the merger closed and the stock stopped trading.
Although shareholders typically get wiped out during the bankruptcy process, the merger deal guaranteed that AMR shareholders would receive at least 3.5 percent of the equity in the new company. And with shares of the new American Airlines Group (ticker: AAL) trading around $25, shareholders may receive an even larger stake once creditors and debtholders are paid off with shares over the next 120 days.
2. Nexstar (NXST, $55.73, +426%)
Irving-based Nexstar Broadcasting had its stock value jump over 400 percent in 2013 as the company continued to buy television stations in several markets. The company owns 72 broadcast stations that reach about 13.8 million households, Nexstar says on its website. But that number will grow as the firm agreed to buy Grant Company for $87.5 million in November, which will add seven stations in Iowa, Wisconsin, Virginia and Alabama.
3. Zale ( ZLC, $15.77, +284%)
The Irving-based retailer capped off a three-year turnaround engineered by Chief Executive Officer Theo Killion by reporting its first annual profit in five years as the improved economy and rising stock prices put more money in consumer pocketbooks. Net earnings reached $10 million for the year ended July 31, compared to a net loss of $27 million the previous year, and same-store sales increased by 3.3 percent. The improved sales picture continued into its first fiscal quarter, ended Oct. 31, as same-store sales increased for the 12th consecutive quarter.
4. Mannatech Inc., (MTEX, $16.96, +202%)
After five straight years of annual losses and falling sales, shareholders of Coppell-based Mannatech were ready for some good news. It arrived at mid-year, when the multi-level marketer of nutritional supplements finally showed a 3.7 percent sales increase and eked out an $800,000 net profit for the second quarter. That small glimmer launched a climb in the company’s shares from about $11 to nearly $35 before it backed of at year’s end. It had started the year at less than $6.
5. U.S. Concrete (USCR, $22.63), +150%)
An improving economy and housing market helped the construction business in 2013 and benefitted this Euless-based producer of ready-mix cement and aggregates. Through the first nine months of the year, operating income increased to $18.1 million from $1.5 million in 2012, and revenues increased by 17 percent to $463.8 million. In July, the company expanded its North Texas operations by adding concrete plants in Wylie, Rockwall and Forney.
6. Emerge Energy Services (EMES, $44.33, +161%)
Southlake-based Emerge Energy Services picked a good year to go public, launching its IPO in May and riding the continuing drilling boom. The company, a master limited partnership, has two principal businesses: selling sand used in hydraulic fracturing and fuel refining and distribution. Through the year’s first nine months of 2013, revenue was up 39 percent and net income was up 8 percent, with fuel accounting for about 80 percent of sales. Emerge was created in April 2012 by Insight Equity, a Southlake private equity firm that dates to 2002.
7. GameStop (GME, $49.26, +96%)
New videogame consoles always make for a good year at Grapevine-based GameStop, and 2013 was no exception. Sony and Microsoft rolled out their new PlayStation 4 and XBox One systems in November, releasing pentup demand among gamers. In the third quarter, the leading videogame retailer, which operates more than 6,600 stores, reported that net earnings increased by 45 percent and comparable-store sales increased by 20.5 percent.
8. Southwest Airlines (LUV, $18.84, +84%)
With mergers reducing the number of big airlines, profits have been rising and airline stocks had a strong year. Even though it doesn’t charge bag fees, Dallas-based Southwest Airlines continued to be an investor darling. The carrier posted solid profits and revenues in 2013, as it continued to integrate Airtran operations into its system. It also added optional service charges, such as Group A boarding for $40, that can be purchased at the gate.
Wall Street analysts continue to be bullish. “We believe Southwest should trade at a premium to the group given the synergies with AirTran, repeal of the Wright Amendment, growth opportunities from added slots at New York’s LaGuardia Airport and international growth opportunities,” wrote Cowen and Company analyst Helane Becker. “Southwest is our top pick for 2014.”
9. Tandy Leather Factory, (TLF, $9.76, +77%)
Have you seen the new Tandy Leather Factory store that opened in June along Interstate 20 in Fort Worth, the one with colorful animal hides stretched across the front? It’s part of an ongoing expansion to match the craft retailer’s steady growth in revenues and profits that continued in 2013. The seller of leather and related products finished the year with 79 Tandy Leather retail stores and 29 Leather Factory wholesale distributorships in North America, plus three combination outlets in the U.K., Australia and Spain.
10. Pioneer Natural Resources, (PXD, $184.07, +73%)
For several years, CEO Scott Sheffield has been telling investors that the Spraberry Field in West Texas was one of the biggest oilfields on earth and his Irving-based oil and gas producer was right in the middle of it. The idea seemed to catch in 2013 as more operators moved in. Pioneer is the largest producer in the area, which includes the up-and-coming Wolfcamp and Cline shale formations, and is in South Texas’ booming Eagle Ford Shale. The company’s overall production was expected to rise about 14 percent in 2013, driven by sharply higher Eagle Ford output.