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The Times 100 : The Best Performing Companies in California : VIEW FROM THE STREET : Investors Think Well of State's Big Players : Led by oil companies, California's giants kept pace with the popular stock averages, posting an overall 17% gain in market value.


First, the bad news.

In theory, California's top 100 companies in market value are worth only a bit more than 50 choice acres of downtown Tokyo real estate--or more than half the $500 billion it may cost taxpayers to bail out failing thrifts.

But the good news, and a more meaningful measure, is that California's top companies saw their market value grow a healthy 17% last year, to about $267 billion.

Market value represents the price of a company's stock multiplied by the number of shares outstanding. It differs from book value, which is the worth of a company's assets as recorded in its financial statements.

To put things in perspective, the Dow Jones industrial average gained 18.15% for the same period (the 52 weeks ended April 10), and the Standard & Poor's index of 500 stocks rose 14.6%.

That means that California companies performed roughly on par with the major securities markets, despite some obvious weakness among the state's aerospace and thrift firms.

Not surprising, market value growth in California was heavily concentrated among the very biggest companies, as the stock market continued its five-year tilt toward large-capitalization stocks.

Led by Chevron's 33% jump to a market value of $24 billion, the combined value of the top 10 California companies rose 25%, to $129 billion from $103 billion.

In the top 10, petroleum giants Atlantic Richfield, Unocal and Occidental all watched share prices rise during the year.

That the oil companies have ridden high in the market is a bit of an oddity. After all, oil prices have fallen in the face of a worldwide glut, while U.S. petroleum reserves are dropping, and analysts haven't been especially optimistic about earnings. But market value of the biggest oil companies stayed up as investors looked for consolidation in the industry and predicted that corporations as big as Chevron could become takeover bait.

Elsewhere in the top 10, Disney saw value jump 44%, even as most entertainment stocks softened. Computer maker Hewlett-Packard edged downward slightly amid stiff competition, but three utilities--Pacific Telesis, Pacific Gas & Electric and SCEcorp--all rode the still vigorous California economy to substantial increases in value.

On the down side, Rockwell International dropped from ninth to 13th place on the list, as its market value dipped to $5.6 billion on the threat of tighter defense spending.

But microchip giant Intel, which jumped to No. 7 from No. 13 the previous year, helped boost the top echelon with a 78% increase in market value, as its stock surged on the expectation that the company's microprocessors would have a virtual lock on the business personal computers in the early 1990s.

Outside the top 20, Apple Computer's value rose, despite a first-quarter 1990 earnings dip, as high-tech stocks in general began to perk up during the past few months.

Norman Mains, research director for Los Angeles-based Bateman Eichler, Hill Richards, believes that such movements may signal a market swing back toward smaller-capitalization, high-growth stocks like Apple. "People have been waiting to see if the market will tilt (toward the smaller stocks). Maybe it already is," Mains said.

Last year, however, there was some distinct shrinkage at the bottom of the Market Value 100 list, where the 10 lowest-ranked companies saw value decline 5% to about $4.2 billion.

Part of the problem: Calfed, a big S&L holding company, posted a huge drop in value, while Glenfed, another thrift, dropped off altogether, even while surviving the savings industry debacle.

Farther up, two larger thrifts, Great Western and H. F. Ahmanson, saw value hold steady, however.

Teradata Inc., a fast-growing Los Angeles computer systems designer, edged on to the very bottom of this year's list, with about $404 million in value. That threshold is up slightly from the $391 million that put Cypress Semiconductor in the same slot last year.

Cypress, for its part, jumped to No. 90 this year, as its market value rose 13%, thanks to a burst of new products.

But Ashton-Tate disappeared as it wrestled with some disastrous bugs in a key software product. Similarly, Applied Biosystems, Armor All and LSI Logic dropped off for reasons that ranged from a decline in government funding for Applied, a research-oriented firm, to a big restructuring charge last year at LSI, which makes computer chips.

Aerospace giants Lockheed and Northrop, like Rockwell, got clipped in the market as the Cold War thawed (even if the Air Force did unleash a couple of Lockheed-built stealth fighters on Panama).

The major bank holding companies split, as BankAmerica, at No. 12, continued its climb toward the top 10, while Security Pacific and Wells Fargo saw value drop somewhat.

Meanwhile, some important entertainment and media businesses went soft in the stock market.

Times Mirror Co., parent of The Times, turned laggard, largely because of weakness in advertising. MCA also dropped as takeover speculation eased, and MGM/UA Communications eked up only a fraction as a $20-a-share acquisition bid by Pathe Communications, the latest in a long line of suitors, remained pending at press time.

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