Death Care Index drops Year to Date in line with Indices

Since the first of the year there has been a lot in the news. . . . and news that is probably more consequential than other 75-day time periods over the last couple of years.  Let’s see. . . there’s been the Omicron variant, supply shortages, inflation, and the Russian invasion of the Ukraine.  On top of all of that in the United States, much of our financial picture depends on what the Federal Reserve Board will do with interest rates moving forward.  And, the Federal Reserve can’t quite seem to make up its mind on where it will be going with the size of that potential rate increase – bringing another unknown into the market.

So, in a financial world that likes stability, it is not difficult to see why the U.S.’s major stock indices have all taken a hit since we rolled into 2022.  It has seemed almost like a whipsaw for me as on days when good news comes forth the markets move up and on days where news is more ominous the market goes down. . . . .and we have had more of those ominous days than “good” days since the beginning of 2022 resulting in a drop in value of the indices.

Just for the record, here’s where we are at on the three major indices and their performance since January 1, 2022, through last Friday, March 11, 2022:

  • Dow Jones Industrials:  Down about 10%
  • S & P 500:  Down about 12%
  • NASDAQ:  Down about 18%

At Funeral Director Daily we have comprised our proprietary Death Care Index (DCI)which consists of one share of stock of seven public companies with at least part of their business in the Death Care realm.  Those companies are Hillenbrand Industries (casket manufacturing), Mathews International (casket manufacturing, cremation, and memorialization products), Security National Financial Corporation (Preneed insurance, financial products, funeral homes and cemeteries), and the four operators of retail funeral home and cemetery establishments — Service Corporation International, Carriage Services, Park Lawn Corporation, and StoneMor.

If you owned one share of each of those seven stocks on January 1, 2020, your value would have been $265.67.  As of last Friday, March 11, 2022, your value would be down to $228.00. . . .a Year-to-Date drop in value of 14.2%  —  virtually right in line with the average of the three major indices.

Individually, here’s how the stock price performance of the stocks in the DCI have fared since January 1, 2022:

  • Hillenbrand Industries –  Down 14.2%
  • StoneMor –  Up 23.6%
  • Service Corporation International – Down 15.8%
  • Carriage Services – Down 20.6%
  • Security National Financial Corporation (SNFC) – Up 6.2%
  • Matthews International – Down 9.8%
  • Park Lawn Corporation – Down 12.0%

Funeral Director Daily take — It’s interesting to see those numbers, which for the five companies that show to the downward side I believe there is not a “performance” factor in the price drops, but, much like the market indices, just not a sense of enough good news in the world to lift their prices.  Quite frankly, there is a lot of pessimism driving value downwards.

Tom Anderson
Funeral Director Daily

When it comes to SNFC and StoneMor I look at their results with a little different edge.  I think SNFC is not seen as a “Death Care stock” but, because of its financial products, it is seen more like a regional bank to many investors.  And, quite frankly, those types of stocks, according to the S&P Bank Select Industry Index have only had a drop of 2.91% year-to-date.  SNFC’s hybrid business of financial products and death care services help it bring that overall value up.

And, StoneMor has not shown a profit for several years and is in a self-proclaimed turnaround mode.  I believe that company acts much more like a “Value” stock play than its comparable companies -SCI, Carriage, and Park Lawn.   All three of those comparable companies have had excellent financial results over the past several years and I think there are those investors who believe StoneMor will eventually be back in that category and are willing to buy stock now while they think it is at a low valuation.  That thinking has created an upside in that company’s value.

For Hillenbrand Industries and Matthews International who are in the manufacturing and product business, I’m guessing that investors see them in a category where “supply issues” have kept them from reaching their potential in the short-term.

Disclaimer:  The author of this article owns stock positions in the following companies:  Hillenbrand Industries, StoneMor, Service Corporation International, Security National Financial Corporation, and Park Lawn Corporation.

An interesting thought — Markets, including commodity markets have been in an unusual state for these past 75 days. Sometimes, things can get upside down.  As you all know, because of current events, the price of oil has skyrocketed.  That brings into focus the idea that we will be using more electric vehicles going forward.

Electric vehicles need batteries to operate and one of the natural resources to create batteries is Nickel.  So, in a world of supply and demand, Nickel has been increasing in price.

What you don’t maybe know is that the coin, the Nickel, that you may have in your pocket is partially made of real Nickel.  And, while that has a 5 cent value at the store today, as of last Tuesday, the amount of Nickel in that coin, had a commodity price of 12.5 cents.  Interesting.

Here’s an excerpt from Saturday’s edition of Seeking Alpha pointing out that fact:

“The remarkable rally in nickel prices has pushed the price of an actual nickel, a $0.05 piece, way above its worth. While only 25% of a nickel is made from the actual metal, at Tuesday’s prices, it would be worth $0.125 (that’s without the rest of the valuable copper that makes up the coin). While the strange price point has occurred many times throughout history, don’t get too exciting about starting a melting operation. It’s illegal to extract the raw materials in pennies and nickels with the intent of selling them for profit”

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