Crystal balls & construction helmets:
Our oracle looks at Maine’s investment opportunities.

By William Hall

“If you invested $1,000 in IDEXX June 1, 1991, and held it, your investment would be worth $262,000 (split-adjusted) today. If you invested $1,000 in WEX, formerly Wright Express, on February 1, 2005, it would now be worth $12,365.” —Evan Livada

Predicting the rising and falling fortunes of Maine businesses is as chancy as finding Friday-afternoon parking spots in the Old Port.

For much of his career, Evan Livada ran Livada Securities, Maine’s largest independent stock brokerage firm before it was acquired by Bangor Savings Bank, with over $200M in investments under management. Today, he has rare insights about the local mix.

The most dramatic player to watch is Maine’s newest publicly held company. Covetrus Inc. (Nasdaq: CVET) launched in February from the merger of Portland-based Vets First Choice and the veterinary division of Henry Schein Inc., a medical supplier based in New York. The new animal-health company is currently building a 170,000-square-foot headquarters in Portland that may house over 1,100 employees after completion in 2020. The headquarters are just three blocks from WEX. The businesses that formed Covetrus had combined sales of about $4B in 2018, making it Maine’s largest public company in terms of revenue.

But in its first full quarter of business, the rookie stumbled. After reporting a net loss of $10M from April to June, Covetrus shares fell nearly 40 percent overnight. “Their stock was just creamed,” Livada says. “Still, I see potential ahead. Covetrus had early growing pains, but they have a lot of things going for them, including manageable debt and exploding demand for veterinary products and services.”

While Covetrus has dominated the public eye recently, another Maine company Livada recommends has been absent from it. Unum Group (NYSE: UNM) is an employee benefits provider that traces its roots to the 1848 incorporation of Union Mutual Life Insurance Co. in Portland. The company went public in 1986 and remained headquartered in Portland until 2002, three years after merging with the Provident Cos., an insurer based in Chattanooga, Tennessee. Although Chattanooga is home to Unum’s main offices, the company’s largest base is still Portland with nearly 3,000 employees.

A$42M renovation of Unum’s campus on outer Congress Street last year never drew the same attention as the new WEX, Covetrus, and IDEXX projects. While Unum’s stock was trading at historic highs less than two years ago, it’s since generally tracked downward. “The recent decline may be a reflection of skepticism about the financial health of long-term care insurers,” according to Livada. “The stock’s taken it on the chin recently, but there are some pretty good upsides.” As they say, s/he who does not risk cannot win.

Sure-fire winners are WEX Inc. (NYSE: WEX)—payment processing systems for commercial vehicle fleets—and IDEXX Laboratories (Nasdaq: IDXX), of Westbrook, purveyors of diagnostic products and technology for the veterinary industry. “They’re both the darlings of Wall Street,” says Livada. In March, WEX moved its headquarters from South Portland to a new 100,000-square-foot, four-story complex in Portland’s East End. Last year, IDEXX broke ground on a 135,000-square-foot addition to its Westbrook campus after completing a similar addition in 2014.

Amid Portland’s shapeshifting, where construction cranes sprout from every street corner, Livada sees more reason for optimism despite recent volatility in the global economy. “People thought the world was going to come to an end back in December,” he says. “But there’s certainly no sign of a downturn in Portland.”