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2013 was a great year for the stock market. It was a spectacular year for the stocks of companies based in the Buffalo Niagara region.

Coming off two straight years of lagging behind the market, the Buffalo Portfolio came roaring back last year, posting its strongest gains in more than 25 years in a rebound that was led by some of the region’s leaders in advanced manufacturing.

A portfolio that owned a single share in each of the Buffalo Niagara region’s 20 publicly traded stocks would have gained a whopping 39.7 percent last year, easily outpacing the 29.6 percent gain by the benchmark Standard & Poor’s 500 index and edging out the 38.3 percent rise in the technology-laden Nasdaq Composite index.

It was a pretty good year all around for the Buffalo Portfolio. More than half of the local stocks had outstanding years, jumping by 30 percent or more, led by the near tripling in the shares of East Aurora-based aircraft lighting and electronics maker Astronics Corp. More than half of the local stocks did better than the S&P 500.

It was a year when the stock market’s rising tide lifted the vast majority of the local stocks. Only a fifth of the members of the Buffalo Portfolio lost money last year, and only two had double-digit declines, led by the 54 percent plunge in the value of Buffalo-based Internet content provider Synacor Inc.’s shares.

For the Buffalo Portfolio, it was the best year since 1985, in a surprisingly strong rally fueled by a steadily strengthening economy that expanded at a 4.1 percent annual pace during the third quarter. The market even managed to keep rising despite the turmoil caused by October’s federal government shutdown and the decision last month by the Federal Reserve to begin scaling back the bond purchases it has been using to keep short-term interest rates at historic lows.

“Who would have thought entering 2013, on the heels of the fiscal cliff, that the market would have had double digit growth, let alone returns approaching 30 percent for the stock market and well over that for small company stocks,” said Thomas R. Emmerling, the managing partner at Dopkins Wealth Management in Amherst.

In fact, the stock market weathered a variety of unforeseen events that could have derailed the rally, from the federal government shutdown in October to unrest in Syria and Egypt.

“Judging by the headlines in the financial press, investors spent much of the past year awaiting one calamity after another,” Emmerling said.

“I think the magnitude of the gains came as a surprise,” said Cynthia Vance, a certified financial planner at Jensen, Marks, Langer & Vance, a Buffalo money management firm. “At the end of 2012, there was still a lot of uncertainty that gripped the global markets. Analysts were revising profit estimates downward, and there was concern about a number of fiscal, tax and regulatory policies.”

No local company had a better year than Astronics, which enjoyed a stunning 179 percent surge after finishing 2012 as the third-worst stock in the Buffalo Portfolio. The company’s shares rose steadily throughout the year as sales continued to grow for the equipment it makes that allow airline passengers to plug their electronic gadgets into a power supply built into their seats.

Astronics also moved to bolster its business with a pair of acquisitions, purchasing an Oregon company that makes the aircraft cabin lighting and air flow components located above passenger seats, as well as a French company that makes seat motion and lighting systems for business jets and first-class passenger seats.

Greatbatch Ltd. had the second-best year among the local stocks, surging by 90 percent. The medical device and battery maker, whose profits jumped by 30 percent through the first nine months of last year, after excluding one-time expenses, even though its sales were fairly flat.

Greatbatch executives said the company’s cost-cutting efforts, combined with a more lucrative sales mix has helped increase the company’s profitability for four straight quarters.

Not far behind was Graham Corp., which had the third-best year with its shares surging by 86 percent. The Batavia manufacturer took advantage of a surge in the chemical and petrochemical industries that is being fueled by today’s low natural gas prices. That’s led in a surge in orders flowing to Graham, and a swelling number of proposed projects for the company to bid on.

James Lines, Graham’s president and chief executive officer, said the “record bid pipeline” is expected to lead to plenty of new work flowing to the company. “We expect this to translate into strong order growth and revenue expansion over the next few years,” he said.

The expectation for improved profitablity also gave a nice boost to Moog Inc.’s shares, which rose by 67 percent as the Elma motion control equipment maker revamped some of its operations.

Moog chief executive John Scannell described 2013 as a year of restructuring and write-downs, including a $38 million hit against its profits during the summer quarter. But he said the restructuring should begin to pay off with higher profits in the current fiscal year, during which Moog expects its earnings to strengthen by 14 percent on sales that are expected to rise by just 2 percent.

Columbus McKinnon’s shares had their second straight strong year, jumping by 64 percent, as the Amherst-based material handling equipment manufacturer also managed to bolster its earnings through cost-cutting and productivity improvements that allowed it to weather a decline in overall sales.

On the downside, Synacor Inc.’s shares tumbled by 55 percent as the Buffalo-based Internet content provider continues to be battered by changes in the Windows 8 operating system that made Microsoft’s Bing search engine the default search provider and set its MSN site as the home page on computers using the operating system.

That change relegated the start pages that Synacor designs for its customers, such as computer-makers Toshiba and Lenovo, along with a handful of cable TV providers, to a secondary tab on those computers’ Internet browsers. That hurts Synacor because the company generates revenue every time a subscriber uses the Google search box on the start pages that it designs, while a reduction in page views also hurts Synacor’s advertising sales on those start pages.

Cleveland BioLabs also had a rough year, with the Buffalo drug development company’s shares sliding by 12 percent while it continued its lengthy quest to win funding from a key federal agency to complete the final stages of clinical testing on a drug that has shown promise in earlier trials for treating people with radiation sickness.

The uncertainty over the funding has unnerved investors, some of whom have grown impatient with the time-consuming process and lingering doubts over whether the financial support will ultimately be obtained.

email: drobinson@buffnews.com