The Newsday Long Island Bloomberg Index of 30 publicly traded companies, led by a 75.6 percent surge in shares of BioSpecifics Technologies Corp., outperformed the venerable Dow Jones industrial average and the Standard & Poor's 500 index in 2014 but fell short of its own torrid 2013 rally, according to data from Bloomberg.
As of the close Wednesday, the index of top Long Island companies returned 12.6 percent for the year, not counting dividends. That compared with 7.5 percent for the widely followed 30 U.S. blue chips in the 118-year-old Dow. Both indexes are price-weighted, meaning a company whose stock price is $100 per share would have twice the impact on the index of a $50 equity.
The S&P 500, a widely used U.S. benchmark whose component stocks are weighted by market capitalization, gained 11.4 percent, not including dividends. A stock's market capitalization is calculated by multiplying the number of shares outstanding by the share price.
David H. Schwartz, chief executive of FCE Group, a Great Neck wealth management firm, said he thinks 2014's broad-based rally is unlikely to continue and 2015 will favor companies with a strong balance sheet and little debt such as Melville-based health care products distributor Henry Schein Inc.
"Companies with more debt will be exposed to higher interest rates," he said. "You could see a huge move against the stocks."
On the other hand, he said, manufacturers and consumer products companies that benefit most from recent declines in energy costs could get a boost.
"You're going to get a split" in the performance of the Long Island index, he said. "A lot of companies are going to get a wind under their sails, and others are going to hit a headwind."
BioSpecifics, a Lynbrook-based developer of an enzyme that breaks down excess collagen to treat a variety of ailments, was the top performer in the Long Island index in 2014.
In 2013 the Long Island index had its best performance in a decade, climbing 37.2 percent, excluding dividends, while the Dow Jones industrials ended 2013 with a 26.5 percent increase.
The Long Island companies with the highest stock prices and the biggest impact on the Long Island index are: Henry Schein Inc. (whose stock gained 20.5 percent), Pall Corp (up 21.4 percent), and MSC Industrial Direct Co. Inc. (up 7.3 percent).
The total market cap of the Long Island index, which includes many micro- or small-capitalization stocks, is about $76 billion. That compares with the $668 billion market cap of tech giant Apple Inc.
A small-cap stock is often defined as having a market capitalization of $300 million to $2 billion. Mid-cap stocks are in the $2 billion to $10 billion range. Anything above a mid-cap stock is a large-cap stock. Anything below the small-cap range is a micro-cap stock.
LONG ISLAND INDEX
Here are the 30 companies that make up the Newsday Long Island Bloomberg Index:
Arbor Realty Trust Inc.
Astoria Financial Corp.
BioSpecifics Technologies Corp.
Bridge Bancorp Inc.
Broadridge Financial Solutions Inc.
Cablevision Systems Corp.
Cedar Realty Trust Inc.
Comtech Telecommunications Corp.
Dealertrack Technologies Inc.
First of Long Island Corp.
Flushing Financial Corp.
Getty Realty Corp.
Hain Celestial Group Inc.
Henry Schein Inc.
Kimco Realty Corp.
Lifetime Brands Inc.
MSC Industrial Direct Co Inc.
Nathan's Famous Inc.
New York Community Bancorp Inc.
One Liberty Properties Inc.
Park Electrochemical Corp.
Research Frontiers Inc.
Veeco Instruments Inc.
Verint Systems Inc.
VOXX International Corp.