NYSE-listed Smith International Inc. started 1986 at $6.75 a share before plunging to an all-time low of $1.25 a share in March after the Newport Beach-based company filed for bankruptcy. Since mid-1986, Smith rebounded somewhat, closing the year at $4.50 a share, down $2.25 a share, or 33.3% in price. The partial recovery appears to be the result of Hong Kong interests acquiring a large stake in Smith and investor speculation that the crushing $204-million judgment lodged against the company will be lowered.
Despite analysts' opinions that Baker International Corp. of Orange has been among the best managed of oil-service concerns, its share price nevertheless fell 33.6% to close 1986 at $11.875 a share on the NYSE.
Also hard-hit was Orange-based Varco International Inc. That oil-patch dependent company fell 38.2% to a NYSE closing price of $2.625 a share Wednesday.
Seahawk Oil International Inc. of Newport Beach fell 54% to close Wednesday at 62.5 cents a share, while Petrominerals Corp., a Stanton-based oil company, fell 52.2% to close at $1.375 a share, reflecting the havoc that cheap foreign oil has wrought on domestic producers.
Among Orange County's health-care companies, the consistent profit makers fared best on Wall Street. Irvine-based Caremark Inc., whose in-home brand of health care has been popular with hospitals and insurers, increased 54.7% on NASDAQ to close Wednesday at $22.65 a share, up $8 for the year.
Investor Confidence
Companies that faltered lost investor confidence rapidly and suffered steep drops in stock price.
For example, the share price of Lake Forest-based Westworld Community Healthcare Inc. fell 92.6% after it began losing money in early 1986. Westworld closed Wednesday on NASDAQ at 87.5 cents a share, down sharply from its 1986 high of $15.375 a share.
Safeguard Health Enterprises Inc. fell 53.2% during 1986 as the Anaheim-based prepaid dental plan continued to report sharply lower net earnings despite increased revenues. Safeguard closed Wednesday on NASDAQ at $5.50 a share. Its high for the year was $13.25 a share.
During 1986, investors placed high premiums on stocks of drug companies with potentially promising products. As a consequence, Viratek Inc., its sister company, SPI Pharmaceuticals Inc. and their parent, ICN Pharmaceuticals Inc., enjoyed a hefty run-up last year.
All three are involved in the manufacture, sale and distribution of the anti-viral drug Virazole, which is being touted as a treatment for AIDS and a possible influenza medication.
Viratek gained 492% in price to close at $63 a share on NASDAQ. Its restated closing price in 1985 was $10.625 a share.
SPI, also listed on NASDAQ, increased in market value by 138.3%, closing Wednesday at $28 a share. ICN, which is traded on the NYSE, increased in price by 31.5% to close at $17.75 a share.
FDA Rejection
At the opposite end of the spectrum was Newport Pharmaceuticals International Inc., a Newport Beach company whose drug Isoprinosine was rejected last February by federal regulators as an AIDS treatment.
Speculation that Isoprinosine was a miracle drug for acquired immune deficiency syndrome boosted Newport's price to a 1986 high of $15.125 a share. But after the Food and Drug Administration rejected Isoprinosine, the company's price plunged to a 1986 low of $4.125 a share. It closed Wednesday at $4.25.
In general, real estate and construction firms benefited from the strong housing market during 1986.
Home builder Standard Pacific Corp. of Costa Mesa increased 66.9% in price to close the year at $26.50 a share on the NYSE. It closed a year earlier at $15.875 a share, adjusted for a 3-for-2 stock split last year.
Santa Ana-based First American Financial Corp., which provides title insurance, increased by 36.6% in price to close Wednesday on NASDAQ at $48.50 a share. The Hammond Co., a Newport Beach mortgage banking firm, saw its price increase by more than 25% to a closing price Wednesday of $5 a share.
In the heavy engineering and construction arena, Fluor Corp.--once Orange County's most richly capitalized public company--fell 25% to a 1986 closing price of $11.50 on the NYSE. Fluor's low for the year was $11.125 a share.
Helped along by the real estate boom and low interest rates, most of Orange County's financial service companies enjoyed modest gains in stock price during 1986.
However, Financial Corp. of America, the troubled Irvine-based holding company for American Savings & Loan Assn., fell 25% on the NYSE to close Wednesday at $7.50 a share, off $2.50 for the year. Far West Financial Corp. of Newport Beach fell 15.9% to close Wednesday at $13.875, down $2.625 for the year.
Glass Maker Wins Big
Among manufacturing concerns, AFG Industries was the biggest winner. The Irvine-based glass maker, which realized a $23-million profit from its failed bid to acquire Lear Siegler, enjoyed a 72.4% increase in its share price during 1986.
