Globalstar, a Covington-based communications company, saw its share price rise 75% in the fourth quarter.
Business editor
Globalstar, a Covington-based communications company, saw its share price rise 75% in the fourth quarter.
Wall Street was boosted in 2024 by the promise of artificial intelligence, and the publicly traded Louisiana companies tied to the booming technology sector also saw their stock soar.
Shares of Lumen Technologies, the Monroe-based company that builds the fiber optic networks that connect data centers and other critical components of the internet, rose 190% in 2024. Lumen has surged after Microsoft said it would use the company’s products to expand its AI infrastructure.
That made Lumen by far the best performer out of the 20 companies in The Times-Picayune | The Advocate’s Pelican State Portfolio. The portfolio outpaced the rest of the U.S. stock market in the fourth quarter and performed better for the year than two of the major indexes.
The Pelican State Portfolio rose 7.25% for the final three months of 2024 and 17.53% for the year. That was better than the Dow Jones Industrial Average, an index of 30 top businesses, which was up .67% for the quarter and 12.88% for the year, and the Russell 2000 small-cap index, which fell by .32% for the quarter and rose 10.02% for the year. The S&P 500, which tracks 500 large businesses, rose 2.15% for the quarter and 23.31% for the year.
“It was quite a fourth quarter and quite a year,” said Peter Ricchiuti, a finance professor at Tulane University who tracks regional stocks across the South through the university’s Burkenroad Reports. “For two years back-to-back, the S&P 500 was up over 20% each year. I hope people don’t expect that going forward.”
Globalstar, the Covington-based satellite company, was the big winner during the quarter, with its price rising 75%. The company announced it would do a reverse stock split early this year in an attempt to reduce the number of shares and potentially raise the price further. The stock will be reduced at a ratio of between 10-for-1 and 25-for-1. The company also plans to transfer its stock listing to the tech-focused Nasdaq; it is currently listed on the New York Stock Exchange.
Globalstar has seen its fortunes improve due to a partnership with Apple, which owns a 20% stake in the business and uses the company as the satellite operator for its emergency SOS service. “It has the most potential of any of the Louisiana stocks,” Ricchiuti said.
Another big winner related to AI was Entergy. The utility company saw its share price rise by nearly 50% in 2024.
AI requires airport-sized data centers, filled with thousands of computers to help train systems and algorithms and deliver insights on them. To keep those computers running, the centers use massive amounts of power.
Meta has announced plans to build a massive data center in Richland Parish, and Hut 8 received zoning approval for a $2.5 billion facility in West Feliciana Parish. To meet the demand of those centers and any others that could be headed to the state, Entergy has asked the Louisiana Public Service Commission to approve construction of three new gas power plants. Those plants would cost at least $3.2 billion to build.
“Utility stocks were very, very dull for decades,” Ricchiuti said. “But the AI play has made utilities sexy again.”
One stock that fell in the quarter and for the year was Pool Corp., despite Warren Buffett’s Berkshire Hathaway buying more than 400,000 shares. The Covington-based wholesale distributor of swimming pool equipment and supplies saw its share price fall by 9% for the quarter and 14.5% for the year.
Pool Corp. stock closed the year at around $340 a share, well below the all-time high of $574 it reached during the COVID pandemic, when people were confined to their homes and making improvements around the house.
Despite the drop in share price, Ricchiuti said Pool Corp. is working in the right direction, as evidenced by Buffett putting a $152 million stake in the company.
“Maybe COVID time might have been their peak,” he said.
Email Timothy Boone at tboone@theadvocate.com.
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