Investors’ increasing appetite for risk continued to lift Colorado stocks during the third quarter.
“Some people were willing to put more on the table,” said Michael Gegen, a first vice president with RBC Wealth Management in the Denver Tech Center. “As much as anything, there was less fear.”
The Bloomberg Colorado Index, a basket of 96 companies based in the state, rose 20.3 percent during the July-September period, beating the gains of 15 percent or so in the major U.S. indexes during the quarter.
UQM Technologies Inc., a Frederick-based maker of power and control systems for electric vehicles — in business since 1967 — led the quarterly performance charts with a 122.9 percent return.
“We have been chasing markets that we had hoped would emerge,” UQM treasurer Don French said. “The market for the type of products we make is really starting to develop in a meaningful way.”
Coda Automotive selected UQM to provide propulsion systems for its electric vehicles, and the U.S. Department of Energy awarded the company $45 million in stimulus funds.
Ramtron International, a Colorado Springs maker of memory chips, was close behind with a 121.9 percent return.
Several small energy companies also did well during the quarter. Kodiak Oil & Gas returned 120.2 percent, American Oil & Gas rose 97 percent, and Gasco Energy was up 75 percent.
Besides petroleum companies, investors in general seemed to favor riskier, small-cap stocks over large- cap companies during the quarter, Gegen said.
Shoemaker Crocs Inc. managed a 95.6 percent gain in the third quarter after rising 185.7 percent in the second.
Among Colorado companies with a market value above $1 million, Liberty Media International, Whiting Petroleum and Apartment Investment Management did best.
But most of the state’s larger companies lagged, including Intrepid Potash, Qwest Communications and Level 3 Communications.
And bank and biotech stocks were the cellar dwellers for performance during the quarter.
United Western Bancorp shares fell 58 percent during the quarter, reflecting an offering of 20 million shares last month that severely diluted existing shares.
CoBiz Financial, parent of Colorado Business Bank, was down 22.3 percent, and Guaranty Bancorp lost 22.5 percent.
“There is another wave of losses coming for smaller banks,” said Paul Kasriel, chief economist with Northern Trust in Chicago.
In particular, more commercial- real-estate and consumer loans are expected to go bad as an anemic recovery fails to halt rising delinquencies, Kasriel said.
Uncertainty around health-care-reform efforts is weighing on biotech stocks, said Barbara Walchli, portfolio manager of the Aquila Rocky Mountain Equity Fund.
“Investors are waiting to see how health-care reform impacts the drug companies and drug innovation,” she said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
