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The stock prices of black-owned, publicly traded companies have generally improved in the last four years, but some of these companies have suffered major setbacks and their stock has subsequently fallen off its respective index.
From July 1, 2001, to July 1, 2005, the companies that make up the BLACK ENTERPRISE Black Stock Index (go to www.black enterprise.com) had a portfolio performance of 35.79%. The Dow Jones Industrial Average fell 2.08% and the S&P 500 Index slipped 1.39% during the same period.
Some of the best performances by black stocks were in the banking and healthcare sectors. The stock price of American Shared Hospital Services (AMEX: AMS), a San Francisco-based healthcare company, rose from $4.20 in July 2004 to $6.02 this July. When BE last wrote about the Black Stock Index in 2001, AMS was trading at around $2.65.
American Shared Hospital Services generates almost all of its profit from providing hospitals with the Gamma Knife, an instrument used to treat arteriovenous malfunctions (which involve the body’s circulatory system) and certain brain tumors without making an incision. The company’s revenues inched up 1.3% to $16,389 in 2004 from $16,178 in 2003. But during the last three years, revenues have grown more than 10%, largely due to the placement of the Gamma Knife in more medical centers in 2002 and 2003.
United American Healthcare Corp. (NASDAQ: UAHC), a Detroit-based healthcare company that provides healthcare management and consulting services, is still bouncing back from a major drop in revenues–from $178 million in 2002 to $22.6 million in 2003. Its net income, however, improved drastically, from a loss of $11 million in 2002 to a net gain of $5.2 in 2003. United American’s 2002 drop in revenues and rise in income was due to its amended contract with TennCare, the state of Tennessee’s healthcare plan, which resulted in United American losing $155 million in revenues but reducing its operating expenses. The company also terminated a management agreement with OmniCare-MI in 2002. United American anticipates 2005 revenues to be in the range of $21 million to $23 million.
Black-owned, publicly traded banks have made a lot of noise as well. In late 2004, New York City-based Carver Federal Savings, which is held by Carver Bancorp Inc. (AMEX: CNY), made an attempt to acquire Washington, D.C.-based Independence Federal Savings, another black-owned, publicly traded financial institution, but the deal fell through. The Office of Thrift Supervision ultimately disapproved of the transaction. The stock prices of the two banks took a hit after the deal proved unsuccessful. Around the time of the deal, both Carver and Independence were trading as high as $20.57 and $20.60, respectively. In May, however, Carver was trading at $17.55 and Independence was going for about $10.00.
Broadway Financial Corp. (NASDAQ: BYFC) offers a $0.05 quarterly dividend and was selling at $10.35 per share in July. The Los Angeles-based bank’s earnings per share was $0.99 last year, up from $0.77 per share in 2003. And since executing a 2-for-1 stock split in December 2002, the stock has shown