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Stock gains show early leaders for the next Star 50* rankings

Recent winners Cerner and O’Reilly are off to a good start in 2012, too.

By MARK DAVIS
The Kansas City Star

Next year’s Star 50* contenders already are flexing their financial muscles. The early leaders rank prominently in the accompanying chart.

It was that way last year, too.

Last May, shares of Cerner Corp., this year’s Star 50* winner, had climbed by 26.6 percent from the start of 2011. It was one of the best showings among larger companies in the group, which have a head start in rankings because of size.

Cerner’s market value continued to climb and helped lift it to the top Star 50* spot this year from a No. 6 rank a year ago.

H&R Block Inc.’s strong stock at this point last year helped boost its rank to No. 9 from a weak No. 23 a year ago. Block is having a rough spring on Wall Street, though, and may struggle in the next rankings.

Watching stock prices is a good way to handicap the Star 50* competition.

Stock price rising? Revenues and profits might be beating expectations, and that’s going to help in the four other Star 50* categories – revenues, income and the growth in each.

Stock slumping? Something’s possibly wrong, and it probably will show in next year’s finish.

Layne Christensen Co. in Mission Woods is a good example of a bad turn. Its shares were down 15.5 percent through early May last year, and its Star 50* ranking tumbled to No. 40 this year from a No. 9 tie a year ago.

So who’s got the hot stock this spring?

It’s a race between Cerner and O’Reilly Automotive Inc., which won Star 50* the two previous years. Both companies’ shares were up more than 30 percent through Monday.

Waddell & Reed Financial Inc. and DST Systems Inc. are both seeing stronger stock performances this spring than last, a hopeful sign for next year’s rankings.

Banks may fare better overall in next year’s rankings because their stocks are off to a fast start this spring.

UMB Financial Corp. shares, for example, were up 28.4 percent through Monday. They were roughly unchanged at this point last year, though UMB still climbed in the Star 50* rankings.

Smaller banking companies such as NASB Financial Inc., Southern Missouri Bancorp Inc. and Guaranty Federal Bancshares Inc. are helping their cause with big stock gains.

Tougher Star 50* times may lie ahead for NIC Inc., the eGovernment company based in Olathe. Its early stock performance a year ago helped its ranking, but this year’s performance is working against NIC’s ranking next year.

Other categories are important, too. Euronet Worldwide Inc. in Leawood jumped to No. 8 this year after a No. 40 rank a year ago. Its stock price didn’t account for much of that. Credit instead the big income swing to a profit in 2011 from a loss in 2010. More often than not, stock prices react quickly to such changes and can make the wait until next year’s Star 50* standings more interesting.

Enjoy watching the race.

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