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After 2-Year Climb, Local Stocks Post a Slight Gain : Market: An index of 91 companies rose only 2.9% compared to the Dow Jones Industrial Average, which went up 4.1% in the first quarter.

April 06, 1993|JAMES F. PELTZ | TIMES STAFF WRITER

Small came up short in this year's first quarter.

Prices of the local area's stocks, which mostly represent relatively small companies, posted a modest gain in the three months ended March 31 to trail several broader measures of the stock market.

It was a pause for the small local issues after two straight years of sharp gains. But the region's showing was in step with the general trend in small-capitalization stocks, which also slowed from their sterling performance of the past two years.

While the widely followed Dow Jones average of 30 industrial stocks advanced 4.1% in the latest quarter, an index of shares of 91 companies in the San Fernando, Santa Clarita and Conejo valleys and Ventura County rose only 2.9%, according to Media General Financial Services, a Richmond, Va., firm that compiles the index for The Times.

The region's stocks also were unable to match the 3.7% gain registered by the Standard & Poor's 500 composite index, a benchmark gauge of the market. However, the local issues did manage to outperform the 1.95% advance of the NASDAQ composite index, which includes about 4,000 stocks of mostly smaller companies.

(The index of regional stocks had risen 19.5% in 1992 after soaring 26.2% the previous year.)

The local stock index turned in its meager performance in the latest quarter even though its tally of gainers, at 57, easily outpaced its number of losers, 30, while four issues were unchanged.

Top performers in the quarter came from a variety of industries, from oil to financial services. And their improvement typically reflected an upsurge in what Wall Street calls their "fundamentals," meaning their sales and profits, or from major shifts in their strategies that were embraced by Wall Street.

The biggest gainer was CU Bancorp, the Encino-based parent of California United Bank that's been recovering from sharp losses and management turmoil during 1992. CU's stock nearly doubled, to $6.25 a share as of March 31.

Players International Inc.'s stock surged 82%, to $11.38 a share, as investors continued to applaud the Calabasas-based company's shift to riverboat casinos. (Players' stock also was among the top gainers for 1992.) The company, which formerly focused on a membership discount-gaming service, opened its first riverboat casino, on the Ohio River, in late-February and is making plans for a second.

Likewise, Spear Financial Services Inc. in Glendale is shifting its focus solely toward its James Mitchell & Co. unit, which markets insurance-related investments, while planning to shed its brokerage firm and other financial operations. Spear's stock jumped 50% in the quarter, to $9.38 a share.

Shares of Benton Oil & Gas Co. and H&H Oil Tool Co. also climbed as crude-oil prices firmed during the quarter, even though both companies have lost money lately.

Benton, an Oxnard-based producer of oil and gas, rose 36% to $8 a share, despite announcing a $1.18-million loss for the fourth quarter of 1992. The stock of Santa Paula-based H&H Oil Tool, an energy-equipment supplier that lost $827,000 in the last quarter of 1992, gained 46% in this year's first quarter, to $6.03 a share.

Shares of Superior Industries International Inc., a Van Nuys-based manufacturer of automobile wheels, kept rolling along after a strong 1992. The stock gained 54%, to $43.63, in the latest quarter as Superior, among other steps, announced plans to build a $30-million wheel plant in Mexico.

But just as the gainers benefited from improvement in their fundamental outlooks, setbacks in the fundamentals of other companies drove their stocks sharply lower.

The best example was Amgen Inc., the biotechnology giant based in Thousand Oaks that reached $1 billion in sales for the first time in 1992.

In late February, Amgen said the sales growth rate of one of its two drugs, Neupogen, was slowing a bit and so was trailing Wall Street analysts' expectations. Amgen's stock, which had been slumping since December, plunged an additional 25% that day alone and hasn't recovered much since. It ended the quarter as the region's worst loser, down 47% at $37.75 a share.

Struggling technology concerns also suffered declines. The stock of Tekelec, a Calabasas-based producer of telecommunications testing equipment, fell 25% to $6.75 a share, and shares of Micropolis Corp., a Chatsworth manufacturer of computer data-storage drives, also fell 25%, to $6.63 a share.

The stock of Summit Health Corp., a Burbank-based operator of hospitals, dropped 28% during the quarter to $5.88 despite the company's growing profits of late.

Summit's shares joined those of many other health-care and pharmaceutical issues that were pummeled during the quarter because of concerns about the Clinton Administration's plans for health-care reform, which might include some price constraints.

Hamburger Hamlet Restaurants Inc., meanwhile, fell 34% to $12 a share in a sharp reversal from 1992, when shares of the Sherman Oaks-based restaurant operator were among the region's top performers.

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