Clearfield Inc., the Brooklyn Park-based optical fiber company that began as a corporate spinoff in 2008, has never had an unprofitable year. It also has never had a year like 2021.
Revenue climbed 50% to $140 million in Clearfield's fiscal year ended September. Expenses didn't rise nearly as much, and its bottom line doubled to just over $20 million.
Investors saw not just performance at Clearfield but, with broadband heading to individual homes, more opportunity ahead.
Clearfield's share price more than tripled from $24 to $84.42 at the close Friday, pushing its market value above $1 billion and making it the second-best performer of Minnesota's 77 major public companies in 2021.
"We saw an explosion of demand. We executed," Cheri Beranek, the company's co-founder and chief executive, said last week. "We're going to deploy as much fiber in the next five years as the last 20 ... We are as much a value at $80 as we were at a fraction of that."
In a year when the S&P 500 delivered a total return of around 27%, the Piper Sandler Minnesota index rose 23%. That difference is shaped by some big Minnesota names that underperformed the S&P including Best Buy, which was down about 5% in 2021, and Medtronic, whose shares are down more than 10%.
The best Minnesota stock performer? Late-charging Brooklyn Park-based Insignia Systems, the provider of digital and in-store advertising displays for consumer goods companies. The company announced it was exploring strategic alternatives on Dec. 6, and speculators have since driven up the share. Its share price nearly tripled for the year with all of the growth in the last weeks.
The Russell 2000 index, a broader survey of smaller-capitalization stocks worth $2 billion or less, jumped 14% in 2021.
Broad-market indexes like the S&P 500 hit new records many times in 2021, as stock values rose on strong corporate earnings, low interest rates and the lingering effects of government stimulus originally aimed at getting the country through the coronavirus pandemic.
Three out of four Minnesota public companies saw their share prices advance.
Some big gainers were Northern Oil and Gas, which more than doubled in value in 2021. The Minnetonka-based company's performance reflects the revived oil and gas sector that led the S&P 500 with a 49% increase in value.
BBQ Holdings, parent of Famous Dave's and Granite City Food and Brewery, increased value by 230% last year, topping $15 per share; albeit well-below its all-time high of $30 in 2015. The Minnetonka company most recently acquired six California Tahoe Joe's restaurants for $4.2 million in cash, following the $13.5 million acquisition in June of Village Inn and Bakers Square restaurants.
Minneapolis-based investment bank Piper Sandler, reflecting the hot mergers and public-offering markets, rose 87% last year. Ameriprise Financial, the giant financial planning and asset management firm in Minneapolis, saw its shares rise 59%.
Vista Outdoor, the Anoka-based owner of Federal Ammunition, was up 91% last year, as it diversifies through acquisitions under CEO Chris Metz, who moved the company from Utah to Minnesota in 2019. Vista Outdoor last month acquired Stone Glacier, a Montana-based maker of clothing and gear. It is the seventh acquisition in 16 months for Vista.
On the other side of the performance chart, Minneapolis-based Regis Corp., the hair salon company in the midst of a transformation, was the worst-performing Minnesota stock this year, down more than 81%.
The company is still dealing with affects of the COVID-19 pandemic, first with mandated closures of salons in 2020 and a shortage of stylists in 2021 that affected volume. A transition to an all-franchise model has been essentially completed. New leadership is coming; Regis CEO Felipe Athayde resigned on Dec. 23 after little more than 15 months on the job.
Bright Health, run by United HealthGroup veterans who raised a Minnesota-record $924 million in a IPO in June, then another $750 million recently, saw its shares drop about 80% since the IPO.
A venture unit of giant Cigna made the most recent investment. The deal most immediately resolves liquidity needs at Bright Health, Kevin Fischbeck, an analyst with Bank of America, said in December. He estimated the health insurer would have run out of cash by the end of 2022.
Bright Health has laid out plans for further growth.
So has Clearfield.
With about 250 employees, it plans to add 150 more as its list of business, utility and municipal customers grows. The company announced in 2021 that it will double the size of its Brooklyn Park research, manufacturing-distribution hub and headquarters. And it will help with a major expansion of a Mexican contract manufacturer on which it relies.
Needham & Co. analyst Ryan Koontz initiated coverage of Clearfield in December with a "buy" rating and a 12-month target price of $92 per share, above the $90 consensus estimate.
"We view 'CLFD' as a relatively undiscovered story, already benefiting from a surge in rural broadband infrastructure investment with the vast majority yet to be deployed," Koontz said in a report. "And a clear leader in the [smaller] markets where we estimate they have 50%-plus share with minimal competition."
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