Since COVID-19 hit in March, the U.S. stock market has ridden a roller coaster, and companies in the Philadelphia region have seen stock prices swing wildly, too, some suffering from the contracting economy and others climbing to new heights on promises of vaccines and other breakthroughs.
It’s not surprising that cutting-edge biotech companies ranked among the region’s big winners, while sectors that suffered included nursing homes, hospitality, real estate and banking.
What follows is a look at winners and losers and those holding on among The Inquirer’s curated list of more than 130 key regional firms — publicly traded companies headquartered in Philadelphia or its suburbs or with a strong area presence.
The largest of area “large cap” firms, Comcast, held its own. Its stock fetched $38.85 on March 10 — the start of The Inquirer’s review period, the day before global pandemic was officially declared — and $39.10 on June 19, the end of the review period.
Launching its new Peacock streaming service on April 15, the Philadelphia-based giant seemed well-positioned to serve a customer base hunkered down at home.
Firms that notched significant stock gains included a series of pharmaceutical concerns in part because that business has been largely unscathed by the pandemic. An old-school manufacturer that stood out was Omega Flex Inc., a maker of metal hose and braid based in the Exton area. Its stock climbed 44%, from about $74 to about $107.
Julie Fox, head of Northeast private wealth management at UBS, cited Comcast and FMC, among others, as smart stock buys.
“There’s long-term opportunity in sectors such as biotech and fin-tech,” Fox added.
The Philadelphia region’s publicly traded stocks have bounced back from their skid early in the pandemic, as stocks have nationally, an Inquirer locally weighted index shows. But the region’s climb in stock prices is lagging behind the overall Nasdaq Composite Index.
Inovio, based in Plymouth Meeting, Montgomery County, topped the list along with a cluster of biotech firms for the largest percentage gainer among The Inquirer’s group. At least in terms of percentage growth in their stock prices, these high fliers seemed immune to the economic turmoil roiling more earthbound firms.
Inovio’s coronavirus vaccine trials made headlines and were the subject of a 60 Minutes segment in March. That surely did not harm to its stock. Its share price climbed from $5.70 to $14.27, a rise of 150 percent.
Last week, Inovio received a $71 million federal grant to help pay for large-scale manufacturing of the company’s hand-held and needle-free injection device, designed to shoot an anti-coronavirus vaccine into the body through pores in the skin. The device also got a $5 million boost from the Bill & Melinda Gates Foundation.
As yet, though, Inovio lacks something crucial: an actual product for sale. Though the firm has numerous vaccines for various diseases in clinical trials and is making progress on its injection device, it has yet to sell anything.
A competitor, Moderna, based in Cambridge, Mass., also profiled in that 60 Minutes report, saw its stock soar initially after it got a $483 million federal grant to develop a virus vaccine. Slightly more federal money, $500 million, went to New Jersey-based Johnson & Johnson to help finance its vaccine research. Cambridge, U.K.-based AstraZeneca landed the biggest federal grant of all — up to $1.2 billion — for its vaccine candidate.
Though not among the big three recipients of vaccine government money, Inovio says the company remains hard in the global hunt for a way to end the threat of COVID-19. Joseph Kim, the firm’s chief executive and co-founder, said it hoped to release the first test results on its virus vaccine within days. That study, on a small human group, focused on the vaccine’s safety, not whether it worked
“We’ve expanded Phase I with additional volunteers testing older and more vulnerable populations,” Kim said last week. “The larger efficacy trials we hope to start later in the U.S. this summer.”
“The timeline is unprecedented. We’re doing it under duress,” he said. “ All of our employees are working from home.”
Inovio has received about $20 million in private and government help for its virus vaccine research. Its staff has grown about 25% year to date, to about 250 people.
The firm has been testing its product in trials run by the University of Pennsylvania and a firm in Kansas City, Mo. Inovio is also launching clinical trials in South Korea and China, to take place simultaneously in a bid to speed things along.
While heavy brick-and-mortar retailers such as Macy’s had to close its stores, online retailers such as Qurate Retail were well-positioned to excel in a pandemic.
Qurate, the parent company behind QVC and Home Shopping Network, reported higher viewership on its networks from March through the end of April. Its stock jumped by nearly 75 percent during The Inquirer’s review period.
Qurate has numerous retail brands — QVC, HSN, Ballard Designs, Frontgate, among others — reaching about 380 million homes through 15 television networks and e-commerce sites, print catalogs and, in pre-pandemic times, old-fashioned in-person stores.
Its networks struggled to find new customers last year. But with Americans locked in their homes in 2020, the firm says demand for vitamins, supplements and the like took off, as well as sales of laptops, tablets, printers and monitors.
HSN also saw a boom in sales of home office equipment and video-calling devices. And, “We’ve seen strong sales for Shark, iRobot, and Dyson vacuum cleaners and Hunter air purifiers,” a spokeswoman said.
Aramark, the big supplier of food and uniforms to stadiums, schools, and other businesses, saw its share price drop as major customers either closed or cut operations.
Aramark cut back, too.
“We are substantially reducing the compensation of our senior leadership team and some managers across our businesses. We are also placing some of our colleagues across the company on temporary furlough,” Aramark CEO John Zillmer said in a memo to employees earlier this year.
The firm’s stock fell $6.28 to $23.67, a 21 percent fall, during the review period.
Also seeing shares drop were Universal Health Services, which runs psychiatric and acute-care hospitals, and Genesis Healthcare, the nursing home operator.
COVID-19 popped up in 187 of Genesis’ 361 facilities, largely concentrated in eastern states that were early hot-spots for the virus. For nursing homes, the pandemic drove up costs for staffing and protective gear while limiting admissions of patients from hospitals, which had greatly curtailed elective surgeries.
Debt restructuring, and a pause in cash payments on certain debt, helped bring some relief to Kennett Square’s Genesis, which has more than 30 nursing homes in the Philadelphia region.
Its share price fell 39 percent, from $1.26 to 77 cents. As for Universal Health Services, headquartered in King of Prussia, its stock fell 19 percent, from $119.46 to $96.70.
Small regional banks such as Malvern Bancorp and 1st Colonial Bank also saw shares drop sharply amid the pandemic. With the Federal Reserve cutting interest rates to zero, this spring has hardly been an easy time for lenders.
Joe Gladue, CEO of Bluestone Capital, an asset manager in Wayne, follows the banking sector closely and said that trend is “fairly representative of the industry as a whole. The larger names have performed better.”
The S&P and Nasdaq Bank indices, which represent large national banks and smaller regional banks respectively, reflected that in performance: the S&P Bank benchmark dropped 19% year to date, while the Nasdaq Bank benchmark dropped 28%.
“A lot of the worry has been that in times of turmoil, larger-cap [bank] stocks have access to capital and bigger balance sheets to get through this trouble,” Gladue said.
The massive small-business financing effort, known as the Paycheck Protection Program, “could provide some banks with a boost to net interest income, as the government provides loan forgiveness on many of these loans and the fee income is accelerated,” he added.
With home sales, construction and the like quelled, firms in the real estate and office sector have not had an easy time of it, either
In this area, Brandywine Realty Trust saw its stock fall in value 20%. Stock of PREIT, owner of major malls in Philadelphia, Plymouth Meeting, Willow Grove, Cherry Hill and elsewhere, held steady during the review period. But the per-share price of $1.36 as of June 19 was a far cry from the nearly $20 that shares sold for in 2017.
Another real estate trust, Exantas Capital Corp, with offices in New York and Philadelphia and holdings in commercial properties, saw its stock plummet 72 percent, from $9.33 to $2.65.
In the end, it’s important to note that the stock market is different from the economy. They don’t move in tandem, said Nikolai Roussanov, a Wharton professor of finance.