For a good while now, we have brought back our weekly supply chain and logistics stock market index.
It was something SCDigest had published for many years along while back, then we dropped for reasons that aren’t especially clear to me now.
But once again, every weekend we now published to SCDigest.com the results for the past week for our index as a whole and for each of the 23 stocks that make up our portfolio, from the week ending on that Friday.
Gilmore Says.... |
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On the downside, the only stock in our portfolio that saw a price decline last year was FedEx, and that just barely.
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We populate our portfolio with companies from three main groups: supply chain software providers, supply chain “hardware” companies, and freight carriers/logistics service providers. Obviously, each must be a publicly traded company, and for now at least be trading on US exchanges to be included.
I should probably add a few entries, notably it seems to me carrier/LSP Schneider, but some others as well. I would like to add a couple materials handling companies, but most are either not public or are just parts of parent companies and thus the stock price is not focused enough on supply chain for inclusion (e.g., Intelligrated, owned by industrial giant Honeywell).
That said, I think our portfolio does a pretty a good job of capturing the pulse of supply chain and logistics stock performance.
So now, in what I promise will be the last of any sort of 2021 review, I am going to take a look at how companies and the index as a whole faired last year. Fortunately, the last day of trading for the year was Friday Dec. 31, so we already had a spreadsheet that cleanly captured end of year results.
As can be seen below in the chart from that week, for all of 2021 our supply chain index thumped the S&P 500 performance, rising 41.8% in an unweighted average, versus an increase of 25.8% for the S&P.
Source: SCDigest
The unweighted average though is key, meaning the average total result doesn’t consider market capitalization. So, a given rise or fall in a smaller company say like RFID firm Impinj has the exact same impact on average performance the same change would have for a giant such as UPS. To replicate our index results, you would need to buy the same dollar amount of each stock in the index, and then keep rebalancing over time.
This biggest share price winners from our portfolio in 2021? That would be LTL carrier Yellow Freight, up a huge 184%, rising from a share price of $4.43 at the beginning of the year to $12.59 at the end.
Runner up was the aforementioned Impinj, which makes RFID chips and readers, and which saw its share price jump 112% in 2031.
Finally in third place was another LTL carrier, Old Dominion, up 83%.
On the downside, the only stock in our portfolio that saw a price decline last year was FedEx, and that just barely, dropping 0.4%. Supply chain software firm Kinaxsis was not negative, but saw its share price rise just 0.1%.
16 of the 23 stocks we follow were up at least 20%.
A few other comments:
After a long time of seeing its stock price stay largely flat, ERP and database giant Oracle saw a jump of 35% in 2021, taking off early in the year from the low sixties to $87 at year end.
Rival SAP had much lower results, increasing its share price just 7.5% in the year.
FedEx’s weak full year performance is largely the result of a major stock price swoon in October, when it dropped to $222 per share after a steady decline from $314 in May, but recovering about half that drop by the end of the year.
Finally, I have said many times to consider buying Impinj on the dips. In mid-July, its share price fell to $43, from $72 in February, almost cutting the value in half. But if you bought in July you would have seen the price rise to $89 at year’s end for a really nice gain.
It’s been a wild ride for the markets here in 2022. Keep up with how supply chain and logistics stocks are doing every weekend on SCDigest.com.
Any reaction to this supply stock discussion? Let us know your thoughts at the Feedback email link in the box area above.
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