'Graduating to the next level' Investors respond to Evergreen's breakthroughs
Every day, Wall Street shrugs off thousands of overhyped company press releases. But when a firm reaches a genuine strategic milestone, investors are likely to respond enthusiastically, as this year's top-performing Globe 100 companies have learned with pleasure.
Evergreen Solar Inc., for example, gained 191 percent in the 12 months ended March 31, making it the second-best performing stock during that period.
After years of trying, the Marlborough company, which makes solar electric generating gear, finally reached a cost-reduction breakthrough last year in producing its photovoltaic panels. The commercialization milestone helped Evergreen forge a partnership with German solar giant Q-Cells AG to build a new factory this year outside Berlin.
Another company that reached a major milestone was American Science & Engineering Inc. which makes bomb- and weapons-detection equipment. In October, the Billerica company's stock began trading on the Nasdaq national market instead of the American Stock Exchange, giving the company access to a wider universe of potential investors.
''It's like graduating to the next level," said chief executive Anthony R. Fabiano. The company's shares gained 171 percent, making it the third best-performer of the period.
The leader among publicly traded Massachusetts companies was Sonesta International Hotels Corp., up 476 percent. In January, the Boston company unveiled plans to redevelop property in Key Biscayne, Fla., which would net Sonesta $120 million.
Losing stocks for the period, meanwhile, included underperformers in two volatile industries, semiconductors and biotechnology: Ibis Technology Corp., LTX Corp. Dyax Corp., and EPIX Pharmaceuticals Inc.
While hype almost never makes a Wall Street winner, shrewd marketing can. American Science & Engineering's Fabiano said the company has benefited from an effort to market more aggressively, especially to law enforcement and military customers. ''The technology's been there. The thing we haven't done is a good job of bringing it to the customers," Fabiano said.
Shares of UFP Technologies Inc., a Georgetown maker of packaging material, surged nearly 150 percent after the company decided to focus marketing on six fast-growing industries.
Extensive research, UFP chief executive R. Jeffrey Bailly said, revealed that it didn't pay to fill factories with low-margin orders for the sake of staying busy. ''It takes some discipline," Bailly said, ''to wait for the good stuff."
Already, Bailly said, one deal that started out as $77 million worth of component parts over eight years with an undisclosed automotive customer has grown to $95 million.
The lessons about marketing and industry focus demonstrated by American Science and UFP are lessons already being absorbed by some companies on the Wall Street loser list, too.
Avici Systems Inc. of Billerica, which makes high-capacity equipment for directing Internet traffic and suffered a nearly 70 percent share price drop, committed itself to conducting what it called a ''root-cause analysis" of why it lost -- and even won -- specific deals with phone and Internet carriers.
What that analysis showed, new chief executive William Leighton said, was that Avici has been failing to distinguish its gear from competitors such as Cisco Systems Inc. and Juniper Networks Inc. and educate potential customers on how Avici gear can best serve their network. Put another way: Avici needs better marketing. ''The conversations we're having with customers are at a different level now," said Leighton.
Andrew Caffrey can be reached at caffrey@globe.com.
