IBM Earnings Projections Jolt AST Research Stock
They say in the high-technology business that when IBM sneezes, everyone else catches cold. This turned out to be the case last week, when common shares of Irvine-based AST Research Inc. dipped sharply on Wall Street projections of lower earnings for IBM.
On Friday, AST stock fell from $18 at the opening to a low for the day of $15.75 a share, before rebounding to close at $16.375 a share on moderate trading volume of 296,400 shares.
For the week, AST was off $4 a share on volume of 636,400 shares.
AST makes enhancement products which boost the performance of IBM’s popular line of personal computers. Not a direct competitor of Big Blue, AST nonetheless is directly affected by the Armonk, N.Y.-based computer giant.
“It’s been crazy today,” commented Shari Pierce, an AST spokeswoman. “Nothing has changed here, but whenever something is said about IBM it affects our stock. It’s just people being skittish about IBM,” Pierce said confidently Friday. “We’re used to it and we know that it will go back up.”
Among Orange County winners on the Big Board was HealthCare USA, the Orange health maintenance organization operator, whose stock price has been creeping back up after a steep fall to a new 12-month low of $5 a share in early February.
Despite the sizable drops in the Dow Jones industrial average on Thursday and Friday, HealthCare USA posted modest gains, making the NYSE’s percentage-gainer list on both days.
On Friday alone, it gained 50 cents to close at $9.125 a share, a 6% gain. For the week, HealthCare USA gained 25 cents a share on volume of 326,800 shares traded.
Harlan Loomas, HealthCare USA’s chairman and chief executive, attributed the improvement to renewed interest in the company among securities analysts, who tended to lose interest in the company as its losses deepened last year.
Although HealthCare USA has in the past made wide swings in price amid rumors on Wall Street of takeover bids by larger HMOs, no negotiations are under way, Loomas said. In September, the issue surged to a high of more than $22 a share on takeover rumors.
On the American Exchange, Bergen Brunswig Corp. made the most-active list last week, when 553,000 shares changed hands. By the close of trading Friday, the Orange-based pharmaceuticals and electronics distributor lost $1.375 a share to close at $29.25.
Local winners on the AMEX included Odetics Inc., whose Class A common stock gained $1.625 to finish the week at $9.75 a share, or an increase in market value of 20%. The Anaheim high-tech firm’s Class B common posted a similar gain. It closed Friday at $10.625 a share, up $1.50 for the week, or an increase in value of 16%.
EECO Inc. was also a strong performer, closing Friday at $17 a share, up $1.625 for the week. The Santa Ana electrical switch maker’s common stock increased in price by nearly 11% for the week.
Tustin-based Wespercorp, which manufactures computer peripherals, also was an AMEX winner, gaining 14% in value for the week.
