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Gazette Premium Content Stock show: Public companies in El Paso, Douglas counties see mixed results in '13

By Wayne Heilman Updated: January 12, 2014 at 11:25 am

El Paso and Douglas counties don't have a lot of public companies traded on major exchanges, but the ones they do have outperformed the rest of the stock market last year, led by a Highlands Ranch-based business that more than tripled its share price.

The combined prices of shares in the seven companies jumped 42.5 percent from a year earlier to $144.93 on Dec. 31, outperforming the 26.5 percent gain recorded by the blue-chip Dow Jones industrial average, the 29.6 percent increase by the broader Standard & Poor's 500 index and the 38.3 percent surge by the Nasdaq composite index.

The seven stocks performed much better last year than they did in 2012, when the combined price increased by just 2.6 percent and trailed the Dow, S&P 500 and Nasdaq composite indexes by a wide margin, even as Spectranetics Corp. in Colorado Springs and Venaxis Inc. in Castle Rock doubled in price.

Still, it wasn't an across-the-board win last year. Share prices increased for only four of the companies, while prices declined for the others - including a Colorado Springs-based gold mine operator that lost 70 percent of its value.

Winners

Advanced Emissions Solutions Inc., Highlands Ranch: This was the star of the show last year. Shares in the company surged 221.3 percent to $54.23, accounting for most of the gain in the combined price of the seven stocks and ranking the stock as the fourth best performer among the 83 Colorado public companies tracked by Bloomberg LP.

Advanced Emissions is a holding company for a family of firms that help owners of coal-burning power plants cut emissions of mercury, sulfur dioxide and acid gases through a variety of technologies. The company has benefitted from federal regulations enacted in 2012 that will force utilities to reduce mercury emissions starting in April 2015.

The company expects to generate $100 million annually beginning next year from a system that will be installed at 28 plants by the end of this year. The system cuts mercury emissions by 40 percent.

"We are just beginning to reach the potential that we have been working on for a decade or so," said Michael Durham, Advanced Emissions CEO. "We have been working on mercury control (technology) since 1990, but the EPA didn't finalize its regulation until 2012."

Much of the company's revenue results from federal tax credits for so-called "refined coal" - coal that is treated with chemicals to reduce mercury emissions when it is burned. Those credits expire in 2021. Advanced Emissions makes the equipment to treat the coal with the chemicals, and manufactures other equipment to remove mercury, sulfur dioxide and acid gases. The company also is developing technology to remove carbon dioxide from coal plant emissions.

Century Casinos Inc., Colorado Springs: Shares in the owner and operator of gaming facilities in Colorado, Canada, Poland and aboard cruise ships jumped 83.5 percent to $5.21 last year, making it the best performer of the three companies based in Colorado Springs.

The stock reached a nearly six-year high of $6.26 in November, just before the company announced that September floods in Colorado and Canada resulted in the company's third-quarter profits falling a penny short of stock analysts' forecasts.

But the one-week, 25 percent price drop that followed the third-quarter earnings announcement didn't erase all of the gains the company notched from a big second quarter. The company's profits more than tripled from a year earlier during the April-to-June quarter, largely from raising its stake in a Polish gaming operation and including profits from that operation in its financial results for the first time.

Century also broke ground last month on a $23 million racetrack and casino it will operate 4? miles north of Calgary International Airport. The company is developing Century Downs Racetrack and Casino with United Horseman of Alberta and is financing the project through a credit agreement with Bank of Montreal.

Spectranetics Corp., Colorado Springs: Stock in the medical laser manufacturer rose 69.3 percent during 2013 to $25, or 43 cents less than its record price set Dec. 26. Still, at year's end, the total value of its shares was more than $1 billion for the first time in the nearly 22 years its stock has been publicly traded.

The company's shares have more than tripled in the past two years as revenue has grown. In 2011, revenue was $127 million; For 2013, revenue was forecast to be $157 million to $158 million. But profits were expected to decline to a break-even level from a five-year high reached in 2012 because of a new medical device tax imposed as part of the Affordable Care Act. Spectranetics also raised more than $90 million after commissions in a secondary stock offering in May.

"We believe in taking care of our teammates at our core, and they take care of our customers. If we do that, everything else takes care of itself," Spectranetics CEO Scott Drake said. "We have accelerated our growth rate from 3 percent in 2010 to the low teens today. That is very impressive."

More growth is on the horizon for Spectranetics, including the addition of 55 people to its sales staff by the end of March, a 40 percent increase. The expanded staff is expected to help the company market new products and expand into markets Drake said should result in "meaningful profits" by next year.

The company is rolling out a one-step solution to remove infected leads from pacemakers and defibrillators, and hopes to get federal approval to use its laser to treat narrowing in arteries previously treated with stents.

TW Telecom Inc., Littleton: The company, which sells phone and Internet services to businesses, saw its stock rise 19.6 percent last year to $30.47. Much of the gain came in May, when an investor bought a 6 percent stake in the company and called it a takeover target.

The company said in November it planned to extend its fiber-optic network into five new cities and expand it in 27 others while adding sales, support and operational personnel to its staff to enable the expansion. TW Telecom signed a lease early last year to move its national operations center to Lone Tree by 2015 to house many of its 1,200 Colorado employees. The company also refinanced $800 million in debt in August to cut its interest rates from 8 percent to 5? percent and 6? percent.

Losers

UDR Inc., Highlands Ranch: The shares of this real estate investment trust, which owns more than 50,000 apartment units in 200 complexes nationwide, fell 1.8 percent last year to $23.35, reflecting a slight decline in funds from operations it expected for the year.

The company announced plans last month to build a $108 million, upscale apartment building next to the Cherry Creek Shopping Center that will become its second Colorado holding, along with the Acoma Luxury Apartment Homes in Denver. UDR is spending more than $1 billion to develop complexes with more than 2,000 units.

Venaxis Inc., Castle Rock: Shares in the biotechnology firm went on a roller coaster ride in 2013, declining by more than 50 percent to a low of $1.20 at midyear before jumping nearly 80 percent during the second half of the year to finish at $2.14, which was still down 16.4 percent from where it started the year.

The company told investors in November that it was nearing completion of U.S. clinical trials for its promising appendicitis test, which already has been approved by European Union regulators. Venaxis told investors at a conference in New York in November that the test could significantly reduce the number of expensive imaging tests resulting from more than 22 million emergency room visits annually in the U.S. and Europe for abdominal pain.

In May, Venaxis raised $14.4 million in a public offering and refinanced a $1.6 million loan with FirstBank. The company has said it likely will have to raise more money this year to gain approval from federal regulators to use its test on U.S. patients.

Gold Resource Corp.: Like most gold mining stocks, the company's shares were hammered as gold prices dropped. Gold Resource's stock fell 70.6 percent in 2013 to $4.53 a share, its lowest closing price in more than four years.

The company cut its monthly dividend twice last year by two-thirds to 1 cent a share, citing "continued precious metal price weakness and volatility"; gold prices fell nearly 30 percent during 2013 to $1,200 an ounce, the lowest price in 3? years.

The CEO, chief financial officer and another director also left Gold Resource as the company's largest shareholder, Hochschild Mining Holdings Ltd. of Lima, Peru, sold 3.4 million shares of the company's stock, or near the maximum it could sell during any three-month period.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

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