Interest Bearing

Business, North Carolina, Aug 2007 by Maley, Frank

Bank of America's name carries a lot of weight in corporate circles, but it's the Charlotte-based giant's size that dominates the Top 75, our annual ranking of the state's largest public companies. BofA accounts for 38% of the list's market capitalization. An anemic 1.6% increase in stock price and a decrease in shares outstanding caused BofA to shed 1% of its market cap in the 52 weeks ended June 29.

That's the big reason Top 75 market cap grew just 5% while the S&P 500 Index shot up 18.4%. But by mid-July, BofA market cap was growing, an early indication Top 75 performance could be better next year, as is the fact financial-service providers are legion on the list, occupying 17 spots this year, 23% of the total. The outlook for the sector is bright, says Moultrie Dotterer, director of equity strategy for Scott & Stringfellow, which is part of Winston-Salem-based BB&T and compiled the ranking. Banks have been hurt by a flat yield curve, where rates for long-term loans are about the same as short-term ones. That started changing early this year. Another sector expected to prosper is health care, which has nine representatives on the list. Analysts expect earnings for health-care companies in the S&P 500 to increase about 10% in 2007, Dotterer says. But it can get dicey with young drug companies. Investors in Chapel Hill-based Pozen were rewarded with good news about an arthritis treatment and a 157% return, the Top 75's highest. But Morrisville-based Trimeris, facing uncertainty about its next-generation AIDS treatments, dropped 40%, second only to Carlisle, a Charlotte-based industrial conglomerate.