The stock market has been really humming in 2012, but the rally has left the Buffalo Portfolio largely in the dust.
The stocks of the publicly traded companies based in the Buffalo Niagara region rose by a little less than 5 percent during the first three months of the year. That's a solid gain that, if it kept pace for the entire year, would yield a nearly 15 increase in the value of the local stocks.
But solid gains couldn't hold a candle to the souped-up rally that swept across Wall Street during the first quarter, leaving the Buffalo Portfolio with gains that were less than half the rise in the Standard & Poor's 500 index and less than a third of the spike by the Nasdaq Composite Index.
While the local stocks were lagging, they still managed to show fairly widespread improvement to start the year.
Two of every three local stocks went up during the quarter, led by the 52 percent surge in the value of the latest addition to the Buffalo Portfolio, Buffalo-based Internet content provider Synacor.
Just seven of the 21 local stocks went down, and only two of those -- Amherst-based energy company National Fuel Gas Co. and Buffalo life sciences firm Cleveland BioLabs -- lost more than 6 percent.
It was the second straight quarter that the Buffalo Portfolio gained value since last summer's painful swoon, and the fifth increase in the last seven quarters.
The gains also helped extend the Buffalo Portfolio's recovery from the devastating declines it experienced in 2008 and early 2009. An investor who owned a single share of each of the locally based companies would now see the value of those investments be worth 4 percent more than they were at the end of September 2008.
Still, the first-quarter gains couldn't keep pace with the overall market. The Dow gained 8.1 percent in the quarter, while the Standard & Poor's 500 index rose 12 percent. Yet even those gains couldn't compare with the Nasdaq's 18.7 percent jump. Even the Russell 2000 index, which is a better benchmark for the Buffalo Portfolio because it is made up of smaller company stocks, far outpaced the Buffalo Portfolio with a 12.1 percent gain.
Synacor was the shining star among the local stocks. The company's initial public offering managed to go off in mid-February, even though the market for new stock sales has been up and down.
Synacor's initial reception by investors was lukewarm. Company executives, as recently as late January, had been optimistic that its sale would get an even stronger reception than they had expected in the fall, when the offering was first announced. But the market quickly doused those dreams and Synacor's shares went public at a price that was less than half of what the company had hoped for in the weeks leading up to the offering.
Still, the stock has shown resiliency since. Synacor was profitable in its first quarter as a public company, with its revenues jumping by 59 percent as it added new customers and brought in more money from search and display advertising. Synacor's shares have jumped by more than 40 percent since its earnings were released in mid-March, and a handful of brokerage firms have initiated coverage of the stock with positive ratings and price targets between $8 and $10 a share.
"This is impressive growth and proof that consumers continue to use the personalized Internet start pages we provide," said Ronald Frankel, Synacor's chief executive officer.
Strong profits also gave a big boost to Taylor Devices stock, which jumped by 32 percent. The surge came after the North Tonawanda shock absorber manufacturer reported that its second-quarter profits more than tripled from a spike in Asian sales of its earthquake-protection equipment after last year's earthquake in Japan.
It was a similar story at Columbus McKinnon, whose stock jumped by 28 percent after the material handling equipment maker's fourth-quarter profits easily topped analyst forecasts and company executives said they were seeing double-digit order growth globally.
On the downside, Cleveland BioLabs had the roughest quarter, dropping by 14 percent because of a nearly 5 percent decline on Friday. The company still is facing questions from investors over the impact of a drop in funding from a key government agency that has been funding some of its research.
National Fuel stock also stumbled, dropping by 13 percent as natural gas prices dropped to a 10-year low, cutting into the profitability of its expanding oil and gas drilling business and prompted the company to twice scale back its drilling plans.
National Fuel is "preserving the value of our assets for the future, when we anticipate higher natural gas prices," said David F. Smith, chairman and chief executive officer.