Map

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ana

Depa

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Peter Ricchiuti • Founder & Director of Research • Burkenroad ReportsGoldring/Woldenberg Hall II • Freeman School of Business

Tulane University • New Orleans, LA 70118-5669peter.ricchiuti@tulane.edu • www.burkenroad.org

504.862.8489 • fax 504.865.5430

To receive complete reports on any of the companies we follow, contact:Peter Ricchiuti, Founder & Director of ResearchTulane UniversityA.B. Freeman School of BusinessBURKENROAD REPORTSPhone: (504) 862-8489Fax: (504) 865-5430E-mail: peter.ricchiuti@tulane.eduPlease visit our web site at www.burkenroad.org

A. B. FREEMAN SCHOOL OF BUSINESSPeter Ricchiuti, Founder & Director of ResearchBURKENROAD REPORTSGoldring/Woldenberg Hall II7 McAlister Dr.New Orleans, LA 70118–5669

Non-ProfitOrganizationU.S. Postage

PAIDNew Orleans, La.Permit No. 549

SIN

CE

1 993

____

___

SIN

CE

1 993

____

___

Compendium Shell 2018 finalv3.indd 1 2/7/18 3:46 PM

DJIA: 24,719.62 • S&P 500: 2,673.61 • Russell 2000: 1,535.40

January 2018

Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria.

-Sir John Templeton (Heck, if an investor was knighted he must have been pretty good)

The S&P 500 generated a total return of 21.8% in 2017. But, that’s not nearly as impressive as the fact that each and every month produced a positive total rate of return. That’s unprecedented. Since the dark days of early 2009 the market has risen more than 300%. Now in its 103rd month, this has been the third longest U.S. economic expansion on record (the longest was the 120-month period from 1991-2001). It's now a

synchronized recovery with eight of the world’s ten largest economies growing their GDPs at above a 4% rate. We’re no longer the lonely economic engine of the world.

There seems to be a lot of good news already pumped into today’s share prices. The AAII Investor Sentiment Survey shows that a full 59.8% of individual investors are bullish while the historical average is just 38.5%. It hasn’t been this high since 2007 (uh-oh). Our students at BURKENROAD REPORTS meet top management, visit company sites, and publish investment research reports on 40 stocks under rocks in Louisiana, Texas, Mississippi, Alabama, Georgia, and Florida. Since the inception of this academic program, hundreds of students have moved on to positions in investment related fields. These in-depth research reports, video presentations, and conference registration information are available at www.burkenroad.org.

IT’S LIKE JAZZFEST FOR CAPITALISTS Please join us for our 22nd Annual BURKENROAD REPORTS

Investment Conference on Friday, April 27, 2018 in New Orleans. It’s free, open to the public, and provides individual and

institutional investors an opportunity to meet management and to learn more about some of the region’s top public companies.

Please check our website for registration and additional details.

UPS AND DOWNS

Company/Symbol 2017 Total Return Headquarters Winners:

ION Geophysical/IO +229% Houston, TX Conn’s Incorporated/CONN +181% The Woodlands, TX Sanderson Farms/SAFM +51% McComb, MS LHC Group/LHCG +34% Lafayette, LA RPC, Inc/RES +30% Atlanta, GA

Losers:

Tidewater Incorporated/TDW -78% New Orleans, LA Team, Inc -62% Sugar Land, TX Hornbeck Offshore/HOS -57% Covington, LA Hibbett Sports/HIBB -45% Birmingham, AL PetroQuest Energy/PQ -43% Lafayette, LA Often times the stocks in a particular industry all move in the same direction. Not so much in 2017.

Generally, those companies servicing the oilfield suffered yet another miserable year. But, not all of them. ION Geophysical produces sophisticated seismic equipment to find oil and gas. RPC Inc is a successful oil services firm with nearly all of its operations in the booming low-cost basins of West Texas. Both rewarded investors in a big way. Meanwhile, the stocks of those companies operating offshore have drained the billfolds of investors. Tidewater (TDW) and Hornbeck (HOS) own big, impressive fleets of oilfield service vessels. Most of these remain at the dock. Oil prices closed the year at their highest point in 2 ½ years. But, industry experts think it will take consistently higher prices to attract energy companies back into the water. Amazon (or even the threat of Amazon) has frightened the bejeezus out of several industries. But, none more than retailers. Hibbett Sports lost almost half of its market value in 2017. Although improved success with their own online site led to a rally late in the year.

HUDDLE UP. Professor Ricchiuti and a team of students learn the finer points on frac sand as they met with the management of RPC a drilling site in West Texas.

On the other hand, Conn’s, a Texas-based retailer in the appliance, furniture, and bedding space might just be Amazon-proof. The Company focuses on the middle and lower middle-class consumer and owns its own financing operation. Marketing experts believe that those products that are heavy and require an entwined relationship between the seller and buyer are best suited to fight-off online encroachment. We’ll have to wait and see. While Amazon captured about 44% of all online sales, it accounted for only 4% of total U.S. sales in 2017. This year we added coverage to include:

Daseke (DSKE), First Guaranty Bank (FGBI), H&E Equipment Services (HEES), Home Bank (HBCP), Lamar Advertising (LAMR), Peoples Financial (PFBX), and SEACOR Marine (SMHI).

TIMBER!! Deltic Timber (DEL) has been an annual presenter at our conference for many years and is being purchased by fellow forester Potlatch (PCH). THE BURKENROAD MUTUAL FUND

Like a sure-handed shortstop in Paris, small cap value stocks were both un-recognized and under-appreciated in 2017. Last year large cap stocks significantly outperformed their small cap brethren, but the Hancock Horizon Small Cap Burkenroad Fund (HHBUX) racked up another positive year, 10.4%, and has outperformed 99% of all equity mutual fund since its inception on 12/21/2001.

Last March, Thomson Reuters Lipper ranked the fund as #1 in the small cap blended category over its first 15 years. In earning that distinction, the fund outperformed 237 funds in the category. Hancock’s portfolio managers utilize the student’s research, as well as other sources, in the management of the fund.

AIRBORNE. Our students left the ground to gain a better perspective on Bristow Group at a site visit in New Iberia, LA

POLITICAL ECONOMICS

It’s usually not a good idea to mix politics with investment decisions, but the stock market has certainly enjoyed an impressive run in the year since the night of Donald Trump’s presidential election.

President Year Return

1 Year after Election (S&P 500)

Clinton (D) 1996 33.1% Roosevelt (D) 1944 30.7% Roosevelt (D) 1932 30.6% Kennedy (D) 1960 27.0% Obama (D) 2012 24.4% Bush (R) 1988 22.2% TRUMP (R) 2016 21.5% Reagan (R) 1984 14.1% Clinton (D) 1992 10.8% Johnson (D) 1964 8.3%

Despite their fattened wallets, Americans have given Donald Trump the lowest approval ratings for a President in modern political history. INFLATION IS THE ENEMY OF FINANCIAL ASSETS

The greatest risk to investors is an unexpected acceleration of inflation. There are plenty of real reasons to believe that this economic villain is hiding right around the corner. These include: • policies leading to possible trade wars and tariffs • tax cuts that are expected to significantly increase the national debt • the weaker dollar raising the prices of commodities and imported goods • potential infrastructure spending (heaven knows that our roads, schools, and bridges need fixing)

stimulating the economy, but increasing the chance of higher inflation • a VERY tight labor market will lead to wage inflation

The current unemployment rate is 4.1% and falling (near a 50 year low!). I speak with business people all day long and their biggest frustration is finding workers in this job market! However, many business owners note that the “workforce participation rate” is only about 60% and there are plenty of potential workers that simply need to “get back in the game.” But, this measure incorporates everyone over 16 years of age including: retired people, those in school or training programs, the disabled and those at home taking care of their families. The unemployment rate is used to measure the current “slack” in the economy. In other words, how much the economy can expand without triggering significant inflation. Add all this to tougher immigration rules and you can see we are precariously close to an inflation tipping point.

Of course, some industries (including energy, materials, and banking) fare better than others in a more inflationary environment. Burkenroad Reports has about half of its coverage focused on these kinds of companies. MUSINGS

It’s been a bull market for everything and 2017 was a really good year to be rich with the values of stocks, bonds, and real estate all moving up. (OK, every year is a good year to be rich!) But, it’s the middle class consumer that really drives the economy and an ever-widening wealth gap is both troubling and economically dangerous. Ray Dalio is the founder of the world’s largest hedge fund and recently said: “Economically, America is now two separate countries. Income inequality is the greatest issue facing the U.S.” Strong returns and very little volatility have made investors complacent and self-assured. I wouldn’t be surprised if 2018 brings a far bumpier ride and a bull market in antacids. And as for Bitcoin and cryptocurrency, do you smell tulips??? THIS YEAR’S INVESTMENT CONFERENCE It’s New Orleans’ Tricentennial and the New York Times just named our fair town the number one city in the world to visit in 2018. Join us at the 22nd Annual Burkenroad Reports Investment Conference on Friday, April 27, 2018. Perhaps this year’s lineup of speakers and presenting companies can help everyone make heads or tails of this highly unusual stock market. STAY OPEN,

Peter Ricchiuti Founder & Director Burkenroad Reports

This button was given to me about eight years ago by Fenimore Asset Management. It has graced my desk ever since!

POULTRY IN MOTION. Our student team gets a feel for transporting chicken at Sanderson Farms in Laurel, MS.

To get a better feel for our program take a look at: Stocks Under Rocks; How to Uncover Overlooked, Profitable Market Opportunities. The book chronicles the Burkenroad Reports program and is filled with entertaining stories and important bits of investment wisdom we have learned over the past two decades.

Company

Ticker

Headquarters

INDU

STRY

EXCH

ANGE

StockPrice@

12/29/2017

Price

atR

eport/

TargetPrice

REPO

RTDAT

EBU

RKEN

ROAD

RAT

ING

DIVIDE

ND

YIELD

EV/EBITD

A(TTM

)RO

EM

ARKET

CAP(m

m)

YTD

RETU

RN

2017

Amerisa

feAM

SFDe

Ridder,LA

Insurance

NASD

AQ$6

1.60

$66.45

/$7

0.00

March2017

MarketP

erform

6.98

%11

.84

12.78%

$1,185

.27%

Bristow

Group

BRS

Houston,TX

OilfieldService

sNY

SE

$13.47

$14.07

/$1

3.00

November2

017

MarketU

nderperform

0.00

%24

.57

-13.75

%$4

76.4

-33%

CallonPetroleum

CPE

Natchez,MS

Oil&

Gas

Exploration

NYSE

$12.15

$11.82

/$1

2.00

November2

017

MarketP

erform

0.00

%13

.56

6.89

%$2

,452

.3-21%

Cal-M

aineFoods

CALM

Jackson,M

SEggDistrib

utor

NASD

AQ$4

4.45

$43.70

/$4

0.00

November2

017

MarketU

nderperform

0.00

%76

.57

-10.25

%$2

,159

.01%

ComputerP

rogram

s&S

ystems,Inc.

CPSI

Mobile,A

LHe

althcare

Service

sNA

SDAQ

$30.05

$28.15

/29

April2017

MarketP

erform

2.83

%19

.89

3.41

%$4

04.1

34%

Conn'sInc.

CONN

Woodlands,TX

RetailElectronics

NASD

AQ$3

5.55

$29.95

/$3

5.00

November2

017

MarketP

erform

0.00

%41

.37

0.83

%$1

,115

.218

1%

Crow

nCrafts

CRWS

Gonzalez,LA

JuvenileProducts

NASD

AQ$6

.45

$5.95/$

6.00

November2

017

MarketP

erform

11.16%

6.41

6.39

%$6

5.1

-11%

DasekeInc.

DSKE

Addison,TX

Trucking

NASD

AQ$1

4.29

NA

April2018

NA

0.00

%12

.32

-13.99

%$6

34.4

42%

DenburyResources

DNR

Plano,TX

Oil&

Gas

Exploration

NYSE

$2.21

$2.50/$3.77

April2017

MarketO

utperform

0.00

%11

.37

9.84

%$8

67.1

-40%

EastGroupPropertie

sEG

PJackson,M

SIndustria

lREIT

NYSE

$88.38

$73.01

/$78

March2017

MarketP

erform

2.90

%24

.98

12.87%

$3,028

.926

%

EvolutionPetroleum

EPM

Houston,TX

Oil&

Gas

Exploration

NYSE

$6.85

$7.05/$

8.00

November2

017

MarketP

erform

4.38

%10

.57

12.50%

$223

.8-28%

FirstB

ancshares

FBMS

Hattiesburg,M

SCommunity

Banking

NASD

AQ$3

4.20

$27.80

/$2

7.00

April2017

MarketP

erform

0.44

%NM

6.80

%$3

81.9

25%

FirstG

uaranty

Bancshares,Inc.

FGBI

Hammond,LA

Banking

NASD

AQ$2

5.00

$26.00

/$3

3.00

November2

017

MarketO

utperform

2.33

%NM

9.23

%$2

20.2

20%

GulfIsland

Fabrica

tion

GIFI

Houm

a,LA

OilfieldService

sNA

SDAQ

$13.43

$10.30

/$1

1March2017

MarketP

erform

0.30

%-9.68

-10.73

%$2

00.0

13%

Globalstar,Inc.

GSAT

Covington,LA

Wire

less

Communica

tions

NYSE

$1.31

$1.62/$

2.50

November2

017

MarketO

utperform

0.00

%95

.92

-49.41

%$1

,651

.5-17%

H&EEquipm

entS

ervices

HEES

BatonRouge,LA

Rental&Le

asing

Service

sNA

SDAQ

$40.65

NA

April2018

NA

2.71

%16

.23

22.39%

$1,449

.287

%

HibbettS

ports

HIBB

Birm

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,AL

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ods

NASD

AQ$2

0.40

$17.10

/$1

6.00

November2

017

MarketU

nderperform

0.00

%4.03

10.34%

$389

.4-45%

HomeBancorp,Inc.

HBCP

Lafayette,LA

Banking

NASD

AQ$4

3.22

NA

April2018

NA

1.30

%NM

9.72

%$3

21.8

15%

HornbeckOffshore

HOS

Covington,LA

OilfieldService

sNY

SE$3

.11

$4.63/$

4.00

November2

017

MarketP

erform

0.00

%98

.74

-6.44%

$115

.2-57%

IBERIABA

NKCorporatio

nIBKC

Lafayette,LA

Banking

NASD

AQ$7

7.50

$71.60

/$8

2.00

November2

017

MarketO

utperform

1.91

%NM

5.12

%$4

,174

.9-4%

Investar

ISTR

BatonRouge,LA

Banking

NASD

AQ$2

4.07

$23.40

/$2

7.00

November2

017

MarketP

erform

0.52

%NM

5.94

%$2

10.1

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Cov

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Perf

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as

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9, 2

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Company

Ticker

Headquarters

INDU

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EXCH

ANGE

StockPrice@

12/29/2017

Price

atR

eport/

TargetPrice

REPO

RTDAT

EBU

RKEN

ROAD

RA

TING

DIVIDE

ND

YIELD

EV/EBITD

A(TTM

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ARKET

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YTD

RETU

RN

2017

IONGe

ophysical

IOHo

uston,TX

OilfieldService

sNA

SDAQ

$19.75

$4.55/$

1.60

April2017

MarketU

nderperform

0.00

%7.12

-94.25

%$2

34.9

229%

LamarAdvertisingCo.

LAMR

BatonRouge

REITandEquity

Trust

NASD

AQ$7

4.24

NA

April2018

NA

4.47

%14

.95

28.42%

$7,307

.620

%

LHCGroup

LHCG

Lafayette,LA

HomeHe

althCare

NASD

AQ$6

1.25

$67.65

/$1

21.00

November2

017

MarketO

utperform

0.00

%13

.04

10.25%

$1,119

.634

%MarineProducts

Corporation

MPX

Atlanta,GA

Recreatio

nal

Boats

NYSE

$12.74

$11.04

/$1

3.00

April2017

MarketO

utperform

2.20

%15

.08

29.82%

$443

.1-4%

MidSouthBancorp

MSL

Lafayette,LA

Community

Banking

NYSE

$13.25

$14.75

/$1

6Ap

ril2017

MarketP

erform

0.30

%NM

-2.46%

$219

.30%

NewparkResources

NRWoodlands,TX

OilfieldService

sNY

SE$8

.60

$9.55/$

11.00

November2

017

MarketP

erform

0.00

%20

.03

0.86

%$7

67.4

15%

PeoplesF

inancia

lCo.

PFBX

Biloxi,M

SBanking

NASD

AQ$1

3.00

NA

April2018

NA

0.31

%NM

2.16

%$6

6.6

-19%

PetroQ

uestEnergy

PQLafayette,LA

Oil&

Gas

Exploration

NYSE

$1.89

$2.86/$6.00

April2017

MarketO

utperform

0.00

%7.65

0.00

%$4

0.2

-43%

PoolCorporatio

nPO

OLCovington,LA

PoolProducts

NASD

AQ$1

29.65

$120

.50/$

125.00

November2

017

MarketP

erform

1.14

%19

.03

106.45

%$5

,207

.627

%

PowellIndustries

POWL

Houston,TX

Electrica

lEquipm

ent

NASD

AQ$2

8.65

$33.41

/$3

2Ap

ril2017

MarketU

nderperform

3.63

%-49.62

-2.89%

$327

.4-21%

RPCIncorporated

RES

Atlanta,GA

OilfieldService

sNY

SE$2

5.53

$25.50

/$2

5.00

November2

017

MarketU

nderperform

1.37

%18

.11

16.33%

$5,529

.430

%

Ruth'sHo

spita

lity

RUTH

Heathrow

,FL

Restaurants

NASD

AQ$2

1.65

$20.15

/$2

2Ap

ril2017

MarketP

erform

1.66

%11

.19

34.56%

$651

.522

%

SandersonFarm

sSA

FMLaurel,M

SChick

en

Processin

gNA

SDAQ

$138

.78

$94.72

/$1

04.00

March2017

MarketP

erform

1.64

%5.23

21.00%

$3,167

.751

%

SEAC

ORHoldings

CKH

FortLa

uderdale,

FLOilfieldService

sNY

SE$4

6.22

$64.78

/$6

7.00

April2017

MarketP

erform

0.00

%10

.82

1.96

%$8

25.5

9%

SeacorM

arine

Holdings,Inc.

SMHI

Houm

a,LA

MarineCargo

Holding

NYSE

$11.70

$12.60

/$1

6.00

November2

017

MarketO

utperform

0.00

%-12.93

-16.07

%$2

06.8

0%

SharpsCom

pliance

SMED

Houston,TX

WasteDisp

osal

NASD

AQ$4

.09

$4.77/$

6.00

March2017

MarketO

utperform

0.00

%45

.06

1.18

%$6

5.5

7%

SparkEnergy

SPKE

Houston,TX

Electricity

Marketin

gNA

SDAQ

$12.40

$11.90

/$1

6.00

November2

017

MarketO

utperform

5.85

%2.81

14.42%

$163

.0-10%

Superio

rEnergy

Service

s,Inc.

SPN

Houston,TX

OilfieldService

sNY

SE$9

.63

$9.61/$

11.00

November2

017

MarketP

erform

0.00

%39

.50

-23.03

%$1

,474

.2-43%

Team

Incorporated

TISI

SugarLand,TX

Industria

lServices

NYSE

$14.90

$13.05

/$1

3.00

November2

017

MarketU

nderperform

0.00

%99

.78

-28.07

%$4

45.7

-62%

Tidewater

TDW

NewOrle

ans,LA

OilfieldService

sNY

SE$2

4.40

$54.25

/$3

6.27

November2

016

MarketU

nderperform

0.00

%46

.53

-2.35%

$732

.0-78%

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OH, THE PLACES THEY WILL GO!

Burkenroad Student Company Site Visits

The Burkenroad Reports program is named in honor of William B. Burkenroad Jr., an alumnus and a longtime supporter of Tulane’s business school. Funded through contributions from his family and friends, BURKENROAD REPORTS is a nationally recognized program, publishing objective, investment research reports on public companies in our region.

The late Aaron Selber was the program’s best friend and benefactor. A native of Shreveport, he was a family man, investor, business man, civic leader, philanthropist, and graduate of Tulane’s Business School (and a darn good first baseman.) When Aaron first came to us in 1995 we were a small non- credit course

with a handful of students producing research on just the public companies we could reach on the St. Charles Avenue streetcar. The generosity of Aaron and his wife Peggy Burkenroad Selber allowed us to become what we are.

Burkenroad KreweBurkenroad Team (Left to Right): Peter Ricchiuti, Marie Daigle, Anthony Wood, Jennifer Brady, Deirdre Fuchs, Robert Morton

We keep getting bigger and better. The Goldring/Woldenberg Business Complex opened in January 2018.

Come by and take a look.

The Friends of BURKENROAD REPORTS

For information about becoming a supporterplease contact Marie Daigle, 504-862-8496

Arnof Family Foundation B.A.”Red” Adams, Sr.

Invest with pride.Invest in your region.

Mutual fund investing involves risk, including possible loss of principal. Current and future holdings are subject to risk. Smaller companies typically exhibit higher volatility.

To determine if this Fund is an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Fund’s full or summary prospectus, which may be obtained by calling 800-990-2434 or visiting hancockhorizonfunds.com. Please read it carefully before investing.The Hancock Horizon Family of Funds is distributed by SEI Investments Distribution Co., which is not affiliated with Hancock Holding Company, or any of its affiliates.

Hancock Horizon Funds:

NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

The Hancock Horizon Burkenroad Small Cap Fund (HIBUX and HHBUX) invests in small companies located or doing business in Texas, Louisiana, Mississippi, Alabama, Florida and Georgia. In addition to our own research and analysis, we use Tulane University’s Burkenroad Reports for individual company research. To learn more about the Hancock Horizon Burkenroad Small Cap Fund please visit our website, hancockhorizon.com.

Map

cou

rtesy

of L

ouis

iana

Dep

artm

ent o

f Tra

nspo

rtatio

n

Peter Ricchiuti • Founder & Director of Research • Burkenroad ReportsGoldring/Woldenberg Hall II • Freeman School of Business

Tulane University • New Orleans, LA 70118-5669peter.ricchiuti@tulane.edu • www.burkenroad.org

504.862.8489 • fax 504.865.5430

To receive complete reports on any of the companies we follow, contact:Peter Ricchiuti, Founder & Director of ResearchTulane UniversityA.B. Freeman School of BusinessBURKENROAD REPORTSPhone: (504) 862-8489Fax: (504) 865-5430E-mail: peter.ricchiuti@tulane.eduPlease visit our web site at www.burkenroad.org

A. B. FREEMAN SCHOOL OF BUSINESSPeter Ricchiuti, Founder & Director of ResearchBURKENROAD REPORTSGoldring/Woldenberg Hall II7 McAlister Dr.New Orleans, LA 70118–5669

Non-ProfitOrganizationU.S. Postage

PAIDNew Orleans, La.Permit No. 549

SIN

CE

1 993

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SIN

CE

1 993

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Compendium Shell 2018 finalv3.indd 1 2/7/18 3:46 PM