This is the Oregon Insight, the Oregonian newspaper’s weekly look at the numbers behind the state’s economy. View previous installments here.
Wall Street had an exciting year in 2021, as it shook off the pandemic recession – if not the pandemic itself – and benefited from low interest rates and endless investor optimism. The S&P 500, a broad measure of market performance, has risen an astonishing 27% last year.
By contrast, stocks in Oregon and Southwest Washington were definitely a mixed bag. Most of them underperformed the market in 2021, and many suffered sharp declines.
And while Oregon has had its first major stock offerings since 2004, the fortunes of the region’s five new public companies have varied sharply. Two of them jumped and two fell, underscoring the risks inherent in going public.
Here’s a look at some of the regional companies that saw the biggest changes in stock prices last year, and how other notable companies have fared.
It wasn’t only Dutch brothers The state’s best-performing stock recorded last year, with the small-town Grants Pass series registering the largest initial public offering in Oregon’s history.
Dutch Bros. raised $550 million in its initial public offering in September, and is the first Oregon company to raise at least $100 million in an IPO since 2004. The stock has continued to climb.
Debuting at $23 a share, Dutch Bros stock surged 60% on its first day and jumped above $81 in subsequent weeks. The stock finished the year at $50.91, more than double its IPO price.
Investors love Dutch Bros, which has low overhead costs to run its small kiosks and enthusiasm from its customers. And it’s not just coffee—roughly a quarter of Dutch Bros’ sales come from its Blue Rebel energy drink line.
Dutch Bros aspires to grow from 370 stores at the end of 2019 to more than 650 by the end of next year, and one day to more than 4,000.
“With high-quality, handcrafted, customizable brews served just by curated drive-thru through lively and friendly ‘broistas’, Dutch Bros. has come up with a winning formula that delivers all-day appeal with convenience combined with customer service. Brilliant, William Blair analyst Sharon Zakvia praised in a note to clients in October.
Dutch Bros makes little profit only because it spends massively to fund its expansion. The company’s sales jumped 63% last quarter as the chain expanded rapidly to Texas, California and other states where its presence was negligible until recently.
Dutch Bros investment bankers apparently mispriced the company’s initial public offering, denting Wall Street’s appetite for the stock by tens or hundreds of millions of dollars. But the stock’s exciting market reception leaves open the possibility that Dutch Bros. will sell more shares in the future, offsetting some of what it left on the table when it went public.
While investors agree that Dutch Bros is the winner, they have not come to a consensus on how much it is worth. The company finished the year with a market capitalization of approximately $8.6 billion, making it the fourth most valuable business in Oregon. But sometimes last fall the value of its stock was 50% more than that.
So 2022 will be another major year for Dutch Bros, as it strives to prove that it can realize its lofty ambitions.
Elsewhere, Hillsboro-based semiconductor lattice It was the second largest stockpile in Oregon last year. Its shares are up 68%, ending 2021 at just over $77.
Just four years ago, Lattice launched a long-running effort to sell itself to a Chinese government-backed company for just $8.30 a share. The Trump administration blocked the deal on national security grounds, and Lattiss continued to thrive in spite of itself.
The company, which designs hand-held, programmable chips for all kinds of consumer gadgets and industrial uses, has enjoyed a transformation under new CEO Jim Anderson and has benefited last year from a growing demand for electronics. Sales were up 28% last quarter compared to the same period in 2020.
However, Lattice’s P/E ratio is an odd 117. And the AP/E ratio, a key measure of a company’s value, is usually around 14. Lattice’s high ratio indicates that investors are betting on expansionary growth some time to come. Any slowdown could lead to a sharp drop in its share price.
Among the other big winners last year are:
· Schnitzer Steel, up 66% from a strong global market for recycled metals for Portland Corporation.
Modern public technology company cost, whose technology manages employee expenses. Its sales are booming and investors see a great opportunity. Shares of the Portland company rose 39% after its initial public offering in November.
Wilsonville-based battery manufacturer ESS Tech It gained 39% after it went public through a merger with a publicly traded investment fund known as a special purpose buyout company in October. SPAC deals provide stock listings for companies without the expense — and investor scrutiny — associated with a traditional initial public offering. ESS raised $308 million in its deal, well below the $465 million it was targeting. And the company’s sales are meager; Investors are chasing hope that one day ESS batteries will revolutionize green energy by storing electricity from wind and solar farms.
The largest company in Oregon, nike, by 19% in 2021. That would be a solid return in most years, and Nike’s sales are growing rapidly. But Nike did better in 2020, so there may have been less room for upside last year.
Intel CorporationInc., the largest recruitment firm in Oregon, is headquartered in Silicon Valley, and therefore its stock is not ranked alongside the companies located here. But its performance matters a lot to the regional economy and Intel’s 21,000 employees in Oregon, who receive a portion of their compensation in company stock.
Intel shares rose just 6% last year despite the chip market boom. The company’s sales were flat last year, constrained by limited factory capacity.
And while new CEO Pat Gelsinger has won plaudits within the company for his ambitious plan to rebuild Intel’s engineering and manufacturing enterprises, Gelsinger has spooked investors with its price tag — which includes more than $25 billion annually for the foreseeable future to build and modernize Intel’s factories.
Shares in a vegan food company Laird Superfood It performed worse than any other company in Oregon last year. The Sisters-based company and co-founded by professional Laird Hamilton, saw its shares drop 72% to end 2021 at $13.04.
That’s well below Laird’s initial public offering price of $22 in the fall of 2020, where the stock briefly traded above $50 last February.
What went wrong? Its sales increased nearly 50% in the first nine months of 2021 – but its losses more than doubled.
Investors want to see a path to profitability.
Shares in a Vancouver exercise equipment brand nautilus It fell 66% last year, wiping out most of the gains the company enjoyed during the first year of the pandemic. Many other home fitness companies fell last year, too, as people started returning to gyms after vaccinations arrived and mandatory closures for fitness centers ended.
Two of the region’s new public companies were among the biggest disappointments of 2021.
Biotechnology startup sulky It fell by nearly half after its IPO in July. The company’s AI is designed to speed up the development and approval of new drugs, but it is still in the early stages of proving the value of its technology.
With higher interest rates, investors may have less appetite for speculative investments — and turn to more established companies late in the year.
In the meantime, he shares in a Portland rental rental management company a cow It stumbled when the company hit public markets in its SPAC deal last month, and was down 24%. Vacasa raised $340 million in the deal, well below the $485 million it had been expecting.
Vacasa works strong. Demand for rental homes is rising, and the Portland Corporation’s latest report forecast sales of more than $870 million for 2021, an increase of 78%.
The company’s poor debut on Wall Street may reflect the potential downside of SPAC deals. SPACs have only recently become popular as a public offering mechanism, and it has proven difficult to gauge investor sentiment before companies hit the market.
However, Vacasa’s stock is now worth nearly $3.5 billion, making it among the most valuable companies in Oregon. And despite its ugly first weeks of trading, the company has the business essentials to fuel years of growth.