SUNBURY, Pa. -- Weis Markets Inc. shares rose 6 percent after the company announced the death of Chairman Emeritus Sigfried Weis, leading investors to believe change could be coming at the conservatively run supermarket chain.
Mr. Weis, who owned 35 percent of the company's outstanding shares, died Sunday night.
Until he was forced to retire in January because of injuries related to a fall, Mr. Weis had co-chaired the supermarket chain with his cousin, Robert Weis, since 1994. Prior to that, Sigfried Weis had served as president since 1961.
Started as a family business, Weis Markets, with stores in the Baltimore area and Western Maryland, has 150 stores with over 16,000 employees.
Many investors in Weis have been concerned with the company's slow growth and large cash reserves, analysts said. While the company has no debt, the cousins have been very cautious about spending money.
"They have all this excess cash, and the question is, what are they going to do with it?" said Jim Barksdale, president of Equity Investment Corp., which owns about 139,000 shares of Weis stock.
Shares in Weis rose $1.50 a share to $27.50, a 52-week high, on trading of 64,200 shares, more than seven times the three-month daily average of 8,500. The stock traded as high as $28 a share.
Investors have questioned why the company has not invested its cash -- valued at $10.50 a share -- or at least returned it to shareholders in dividend payments. The last time Weis increased its dividend was in May of last year, when it raised the payment 1 cent to 19 cents a share.
"Management has done a lot of things that are negative to shareholders by sitting on all that cash," said Mr. Barksdale. "They have to do something with it."
Mr. Barksdale added that he doesn't expect any quick changes.