Investors in Shift4, Freshpet, Carpenter Technology and OraSure celebrated 2023. These four companies with Lehigh Valley ties enjoyed big stock gains.
Cash shareholders in the region’s two largest companies, PPL Corp. and Air Products, didn’t do as well, although quarterly dividends pared some of their losses.
Freshpet, which produces fresh pet food in the town of Hanover (Northampton County), went through some turmoil before the year ended.
The Secaucus, New Jersey-based company is enduring a battle with Jana Investors. This activist shareholder criticized the company’s management and board. Activist shareholders invest in the business and demand changes ranging from changes in operations to the sale of the company.
That dispute was resolved in August with the appointment of two directors. Both parties, along with all shareholders, ultimately won.
Shares in Freshpet (NASDAQ FRPT) started the year at $52.77 (based on the closing price on December 30, 2022). At the close of trading on Friday at 4:00 p.m., 2023 shares rose to $86.76, up 64%. Freshpet ended the year with a market capitalization (share price times the number of shares outstanding) of $4.18 billion.
Measures of the broader market posted gains for 2024, with the S&P 500 up 24% and the NASDAQ up 44%. The Dow Jones Industrial Average gained 14%.
Back in the Lehigh Valley, Shift4, which processes payments for hotels, restaurants, stadiums and other venues, added high-profile clients during the year and began expanding into Europe. The company also moved its headquarters from Hanover Township (Lehigh County) to Upper Saucon Township.
The company is enduring a negative report from a short seller (an investor who bets on the stock going down). In April, Blue Orca Capital questioned Shift4’s accounting and technology. Shares fell after the report.
Founder and CEO Jared Isaacman hit back at his critics — “they got it wrong” — and the company rebounded, adding clients including the National Football League’s Miami Dolphins, the National Hockey League’s St. Louis Blues, and the National Basketball Association’s Cleveland Cavaliers .
Isaacman was right. At last close on Friday, Shift4 was at $74.34, up 33% for the year. The stock trades under the symbol FOUR on the New York Stock Exchange. Shift4’s market cap is $6.13 billion.
Carpenter Technology, a Philadelphia-based metal alloy maker with operations in Berks County, finished strong, nearly doubling the value of its stock in 2023.
In May, CEO Tony Tene said demand was strong and Carpenter could sell every ton of metal it made for customers in the aerospace, consumer, defense, transportation and other industries.
The company also announced a plan to double adjusted operating income (which excludes certain one-time items) to $500 million by fiscal 2027, and yet the stock fell that day.
Since then, Carpenter has posted solid earnings and raised prices, and the stock has rallied. The last 2023 close for the stock (NYSE CRS) was $70.80, up 92% YTD. Shareholders also received 80 cents in dividends during the year. The company’s market capitalization at the end of the year was $3.5 billion.
OraSure, the Bethlehem-based maker of medical test kits and collection devices, started the year at $4.82 a share (NASDAQ’s OSUR). Under CEO Carrie Eglinton Manner, the company pushed for efficiency and cost-cutting and moved work to its new Bethlehem Township plant, which was built with $109 million in federal funds.
OraSure, maker of the InteliSwab rapid test for COVID-19 and other diagnostic tools, is pushing for more tests on patients at home. It reported second- and third-quarter earnings that beat analysts’ estimates and built its cash position. As of Sept. 30, OraSure had $224.9 million in cash.
OraSure shares ended 2023 at $8.20, up 70%. This gave the company a market capitalization of $603 million.
Larger domestic companies did not fare as well, as shares of PPL and Air Products declined in 2023.
PPL Corp. began the year in controversy with billing issues. In December 2022, the billing system did not communicate with the meters. This resulted in a combination of high bills, low bills, late bills and sometimes no bills at all for about 800,000 customers. By the end of May, normal billing was restored.
In November, the Pennsylvania Public Utilities Commission proposed a $17 million settlement with the company over the matter. PPL also said it has invested in staff and equipment to prevent future problems.
The Allentown-based utility has also taken steps to become more environmentally friendly, which has been a challenge for it because of different attitudes to being “green” in different parts of its operations. PPL operates in Rhode Island, which has set ambitious goals to move away from fossil fuels and the greenhouse gases they emit, while in Kentucky some state lawmakers are fighting to support the coal industry.
The energy company also decided this month to pay $115 million to Talen Energy, a company it spun off in 2015. Talen took PPL to court to seek more than $900 million in proceeds from a 2014 sale of hydroelectric plants in Montana . PPL claims it acted properly in the deal, but agreed to pay Talen to end the litigation.
The company’s growth outlook remains stable. In November, CEO and President Vincent Sorgi said PPL could achieve 6% to 8% annual earnings and dividend growth through at least 2026.
Even better for existing shareholders, Chief Financial Officer Joe Bergstein said PPL can meet its financial goals and make $12 billion in capital investments without having to sell new shares.
New shares mean “dilution” of existing shares, which can hurt long-term holders as the gain is spread across more shares.
Shares of PPL ( NYSE PPL ) opened the year at $29.22 and ended at $27.10, down 7%. During the year, shareholders were paid 96 cents in dividends.
Air Products started 2023 at $308.26. Seifi Ghasemi, chairman, CEO and president, says the Upper Macungie Township-based industrial gases producer is leading the way to a clean energy future. Air Products is the world’s largest producer of hydrogen and is investing billions in plants to produce the gas without generating carbon dioxide, which is linked to climate change.
The US Inflation Reduction Act of 2022 provides subsidies for the production of “green” fuels, spurring Air Products’ transition to clean energy.
Still, stocks took a hit. In February, Air Products’ fiscal first-quarter earnings came in at the low end of the company’s forecast, and shares fell. Shares fell 3.1% in March after the company said it was abandoning a coal-to-methanol project in Indonesia.
Then in November, Air Products reported adjusted fourth-quarter earnings per share that beat Wall Street estimates, which Ghassemi said showed the success of the company’s strategy to promote hydrogen as a replacement for fossil fuels.
“Our growth strategy is evident in the results,” he said in a Nov. 7 statement.
Gassemi said Air Products ( NYSE APD ) can serve a higher purpose by helping build a clean energy economy and still make money.
The stock price has fallen this year, ending 2023 at $273.80, down $34.46, or 11%. Shareholders received $7 in dividends during the year.
At the 2023 closing price, Air Products is still a giant in its industry with a market cap of $60.9 billion.
