Another strong year for stocks here, nationwide

The U.S. stock market defied analysts’ downbeat outlook for 2024, producing another banner year for investors. The benchmark S&P 500 rose more than 23 percent—roughly matching its performance the year before and marking the first time in a quarter-century with back-to-back annual gains of more than 20 percent.

In this region, the picture was more mixed. Among two dozen stocks of local interest tracked by the Rochester Beacon—publicly held companies based in the Rochester area or with sizable operations here—nine outpaced the S&P 500 and another three posted lesser double-digit returns. But nine ended the year in negative territory.

Together, a composite of the two dozen stocks was up 6 percent. All returns are adjusted for splits and dividends and/or capital gains distributions.

Graham Corp. was the top performer, surging 134 percent. The company designs and manufactures a range of products for defense, space, energy, and process industry customers. It is based in Batavia, where surface condensers and ejectors are produced for the defense, energy, and petrochemical industries.

At the end of its 2024 fiscal year last March, the company had 595 employees, up from 331 in 2021. In August, it broke ground on a new 29,000-square-foot facility in Batavia, an investment of roughly $17.6 million that is expected to create an additional 24 full-time jobs.

Graham’s stock has been trending upward since the start of 2023. After the company reported strong quarterly results in early November, its shares surged. Revenue increased 19 percent to a record $53.6 million, its operating profit jumped more than 400 percent, and its full-year guidance was raised to reflect improved profitability. On Friday, its stock reached a 52-week high.

Gannett Co. Inc. ranked second among the two dozen stocks. Its shares, which traded below $2 in March and less than a decade ago topped $25, turned strongly upward in May, finishing the year above $5—producing a total return of 120 percent for 2024.

When it reported third-quarter results at the end of October, Chairman and CEO Michael Reed highlighted the fact that Gannett’s audience “surpassed 200 million average monthly unique visitors for the first time in our history.” He also said the company had completed its debt refinancing transactions, “an important milestone in our long-term strategic plan.”

The Democrat and Chronicle owner, which is attempting to transform its business for the digital era, reported a 5.2 percent quarterly increase in total digital revenues, while total revenues fell 6.2 percent and its net loss was nearly $20 million. Investors seem more focused on the future; Gannett expects total digital revenues to accelerate and make up 50 percent of total revenues in 2025.

Paychex Inc., the Rochester area’s top public-company employer with some 4,500 local staffers, turned in another solid year for investors. Its total return rose 19 percent. On Dec. 19, it reported another strong quarter, with both revenues and net income up 5 percent, and it began 2025 with a bang: the acquisition of Paycor HCM Inc. in a $4.1 billion deal announced Tuesday. Paychex serves more than 745,000 customers in the U.S. and Europe and pays one out of every 12 American private-sector employees. Cincinnati-based Paycor has more than 49,000 clients and is focused on larger enterprise businesses. Paychex’s share price rose more than 2 percent in the hours after the deal was announced.

The biggest loser among the 24 stocks tracked by the Beacon was Xerox Holdings Corp., one of Rochester’s traditional Big Three. Like Eastman Kodak Co. and Bausch Health Cos. Inc., Xerox is much diminished from its glory days but remains an important local employer.

For investors, Xerox stock has brought only disappointment lately. While its share price reached nearly $20 in early 2024, it finished the year below $8.50—a loss of half of its value since the end of 2023.

Xerox began 2024 by rolling out its latest restructuring effort, with plans to cut its global workforce by 15 percent and install a new leadership team. The news triggered a 12 percent drop in its share price. The stock rebounded and gained steam during the first quarter, but then began a downward slide.

Two days before Christmas, Xerox reported it had agreed to purchase Lexmark International Inc., a Xerox partner and supplier that creates cloud-enabled imaging and IoT technologies, in a deal valued at $1.5 billion. The announcement sparked a brief uptick in Xerox’s stock price, but it has since retreated and is trading near its 52-week low.

Looking ahead, analysts think the stock market will continue to rise in 2025, though not at the pace of the last two years. Much could depend on the fortunes of the tech sector, which have driven gains in the S&P 500 and the tech-heavy Nasdaq Composite, which jumped nearly 29 percent in 2024. By comparison, gains posted by the Dow Jones Industrial Average (up 12.9 percent) and the small-company benchmark Russell 2000 (up 10 percent) were more modest.

Inflation could also be a big factor. The Federal Reserve cut interest rates three times in 2024 as inflation cooled, but President-elect Donald Trump’s vows to impose tariffs on imported goods and begin massive deportations are causing concern that prices could surge again.

The underlying mood among U.S. businesses appears to be generally positive, though. The Paychex Small Business Employment Watch tracks sentiment among smaller companies, which account for nearly half of total U.S. employment. Through November, said John Gibson, Paychex president and CEO, modest growth continued as “small businesses remain resilient and generally optimistic heading into the new year.”

Paul Ericson is Rochester Beacon executive editor. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. See “Leave a Reply” below to discuss on this post. Comments of a general nature may be submitted to the Letters page by emailing  [email protected].