In the few days after Ducommun Inc.’s announcement that board Chairman Joseph Berenato would relinquish his title, shares of the Carson aerospace and defense industry parts supplier jumped.
That made it one of the biggest gainers on the LABJ Stock Index last week, up 9 percent to $9.49 on June 6. (See page 32.) The stock fell June 7 to $8.65, giving back all its gains from the previous week and more as the market cooled. The stock remains down significantly from its 52-week high of $23.54 in July.
Jeremy Devaney, who follows Ducommun as a vice president and senior analyst at BB&T Capital Markets in Richmond, Va., said the announcement might not have driven the stock’s rise and fall, but was significant nevertheless.
Berenato has served as Ducommun’s chairman since 1999 and was chief executive from 1997 to 2009. The June 4 announcement marks the end of a transition of power within Ducommun. When Berenato steps down July 27, he’ll hand the chairman title to Anthony Reardon, Ducommun president and chief executive.
Joseph Bellino, Ducommun’s chief financial officer, said Berenato will stay on as a director.
Reardon will inherit his new responsibility during a trying time for Ducommun. The company made a huge acquisition last summer, buying LaBarge Inc. of St. Louis, a company close to its own size. Share prices soon slid.
Devaney said investors had believed the acquisition would go more smoothly. Ducommun in May reported first quarter earnings of 23 cents per share, well below analysts’ consensus estimate of 32 cents.
But he added that Reardon is a clear communicator and the new title could lead to a better understanding with Wall Street.
“Moving (Reardon) to where he can really capture the full communication bullhorn for the company is a positive thing,” he said.
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