It has been a pretty rough year so far for the stocks of companies based in the Buffalo Niagara region.
If you owned a portfolio that included a single share in each of the 20 publicly traded companies based here, it would have lost 4.3 percent of its value during the first quarter.
That stands out – and not in a good way – from the rest of the stock market, which got off to an ugly start this year, only to reverse course in mid-February and rally strongly in March to finish the quarter with small gains, with the Standard & Poor’s 500 index up by 1 percent for the quarter.
For the local stocks, the March rally petered out. Just six of the 20 local stocks went up during the quarter, although four of those gainers rallied by more than 12 percent. The biggest gainer – Buffalo venture capital firm Rand Capital Corp. – jumped by more than 20 percent after booking a more than $10 million profit from the acquisition of its biggest single investment, Gemcor, a West Seneca manufacturer of automatic fastening systems.
Graham Corp.’s share price rose by 18 percent. While the Batavia company, which makes condensers and other heat-exchange equipment, said its third-quarter profits were hurt by softening oil and chemical markets, as well as delays caused by engineering changes in some orders, its order bookings for future work have held steady.
On the downside, there was ample ugliness. While 14 of the stocks finished the quarter with a loss, six of those stocks tumbled by 20 percent or more.
The worst hit was taken by fledgling Clarence cigarette-maker 22nd Century Group, which saw its shares plunge by 44 percent. Twenty-second Century hopes to use its technology to manipulate nicotine levels in tobacco into a lucrative business selling very low-nicotine cigarettes as a way to help smokers quit. But that needs approval from federal regulators, and the process will take considerable time.
In the interim, 22nd Century is trying to generate revenue by selling its own brand of cigarettes with very high levels of nicotine. The company is losing money because its small but growing sales have yet to reach a point where it covers the costs at its North Carolina cigarette factory. The company also warned that it had enough cash to fund its operations only through October.
But dealing with federal regulators often takes much longer – and costs more – than expected. Cleveland BioLabs, a Buffalo drug-development company that is trying to gain approval from federal regulators to sell its anti-radiation-sickness drug as an emergency treatment for nuclear accidents or terrorist attacks, saw its stock drop by nearly 28 percent when regulators demanded additional studies be done.