B-to-B DMers Suffer from Market Woes
BUSINESS-TO-business DMers couldn’t escape the stock market’s downturns during the last three months.
The 32 B-to-B direct marketers tracked by Gruppo, Levey & Capell Inc. in its GLC Portfolio recorded a 4% drop in average stock price for the three-month period ended July 31, compared with a 26% average stock price increase in the comparable period of 1997.
The Standard & Poor’s 500 didn’t fare much better, going up less than 1% over the period, compared with a 19% increase in the same 1997 time frame.
Only 12 of the 32 stocks rose in price-and three of those went up 4% or less. Niche market catalogers, in such segments as medical supplies and maintenance, repair and operations (MRO) equipment, had the most consistent gains.
Henry Schein Inc., for example, jumped 23% during the period, while Wilmar Industries Inc. and Barnett Inc. each had single-digit hikes.
Bucking the Trend Several computer products marketers also bucked the trend, with Micro Warehouse Inc., Creative Computers Inc., Dell Computer Corp. and Insight Enterprises Inc. all achieving double-digit improvement. However, six of the eight computer products catalogers tracked by GLC recorded an average 12.3% dip in stock price.
Those companies had to work hard for their growth.
Micro Warehouse recently underwent some restructuring, closing down several unprofitable foreign operations to focus the business and gain investors’ favor. Creative Computer’s showing could be attributed to its new online auction unit uBid Inc., which has posted significant profits since debuting last December.
B-to-B stocks have lagged the overall market over the past year. The S&P 500 was up 17.4% for the 12 months ended July 31, while the average stock prices of the 32 publicly traded B-to-B companies sank 0.5%.
The best performing stocks in the business-to-business sector were computer hardware and peripherals marketers Dell Computer and Insight Enterprises, which both turned in impressive 12-month increases of 155% and 85%, respectively.
