Many Area Stocks Climb From Abyss of ’87 Crash
More than 70% of the stocks of major San Fernando Valley area companies rose in price during the first three months of the year, reflecting a partial recovery from the pummeling they took in last October’s stock market crash.
Gainers outnumbered losers by more than 5 to 2, with 50 stocks increasing in value, 17 falling and two unchanged. Despite the recovery, few stocks approached their lofty pre-crash prices.
Companies included in the list are those with headquarters from Burbank to Camarillo and with publicly traded shares that are readily available to investors.
Overall, the Dow Jones Industrial Average, the most widely followed market measurement, closed out the first quarter at 1,988.06 last Thursday, up 2.5% from its closing level of 1,938.83 on Dec. 31. Although the DJIA registered a modest quarterly gain, it was up 14% from its closing level of 1,738.74 on Oct. 19, the day it fell a stunning 508 points.
Stocks of larger companies in the area generally recovered well in the first quarter. Aerospace giant Lockheed, based in Calabasas, rose 28% in price to end the quarter at $44.25 a share, while the entertainment conglomerate MCA of Universal City climbed 25% in price to $43.25 a share.
But Walt Disney, the Burbank entertainment giant that was one of last year’s biggest winners, closed the quarter virtually unchanged at $59.13 a share.
Stocks for three of the top gainers rose in price because of financial restructurings or, in one case, a disclosure that the firm may be acquired. The rest of the largest stock gains were due to companies showing healthy earnings increases.
The area’s biggest gainer was Compact Video, a Burbank video services company that was renamed Andrews Group during the quarter. Its stock price rose 156% during the quarter to $5.75 a share.
The company’s stock price began climbing as investors started speculating on the next move of high-flying New York financier Ronald O. Perelman, who controls the company through one of his subsidiaries. Perelman has been liquidating the company’s assets and has disclosed plans to raise $850 million through it to finance a future takeover. Analysts also had considered the company’s assets to be undervalued in the stock market.
Price Pfister, a Pacoima faucet maker, rose 150% in price to close at $17.50. The jump was due to the company’s announcement last week that it is negotiating to be acquired by Emhart Corp., a Farmington, Conn.-based industrial products company, for $18.50 a share, or $211 million.
The stock price of Micom Systems, a Simi Valley computer communications equipment maker, climbed 69% in the quarter to close at $13.13 a share. Last week, Micom disclosed it would spend $144 million, or $16 a share, to buy back 9 million of its shares, or nearly half of its stock outstanding.
Micom is buying back about 4.2 million shares from three dissident directors, with the remaining 4.8 million to be bought on the open market. Shares of Micom, which was hit hard in the computer industry slowdown in 1985 and 1986, had fallen to as low as $6.50 a share after last fall’s crash.
United Education and Software, an Encino operator of trade schools that has been aggressively acquiring schools, rose 75% in price to $21.63 a share. The company reported that its profit in the fiscal year ended Jan. 31 rose to $4.4 million from $1.7 million a year earlier, while revenue more than doubled to $80.7 million from $37 million in the previous year.
Sierracin, a Sylmar aerospace company, jumped 82% to close at $7.50 a share. The company’s profit in the fourth quarter ended Dec. 31 nearly quadrupled to $530,000 from $134,000 a year earlier, in part because of cost cutting, higher productivity and increased export sales.
Diodes, a Chatsworth semiconductor company that has benefited from the recovery in semiconductors as orders industrywide have surged, increased 63% in price to $3.25 a share. The company reported its profit nearly tripled in the third quarter ended Jan. 31 to $80,373 with sales rising 20% to $3.5 million.
Those stocks that declined did not fall very far. Only eight stocks lost 10% or more in value, and only two of them sell at $2 a share or above, meaning that in most cases the percentages represent a drop of only a few cents a share in price.
Nu-Med’s stock price fell from $1.87 a share to $1.50, or about 20%. The Encino-based hospital chain reported a $19.1 million loss in the third quarter ended Jan. 31, which included a $9.2 million loss from the sale of an unprofitable Florida hospital.
Dick Clark Productions’ stock fell nearly 13% in price to $5.25 a share after the Burbank television producer reported it lost $1.2 million in the second quarter ended Dec. 31, in part because of the softening of the market for syndicated, or non-network, television shows.
Patlex, a Chatsworth laser company whose stock soared last year after important patent victories by the company that allows the company to collect more royalties, gave back some of those gains, dropping 13% in price to close at $13 a share from $15 on Dec. 31.
10 BIGGEST VALLEY AREA STOCK WINNERS FOR 1ST QUARTER
Closing Price on Percent Line of Stock 3-31-88 Change Business Compact Video* $5.75 156 Video services Price Pfister $17.50 150 Faucets Tekelec $7.63 91 Telecommunications Sierracin $7.50 82 Aerospace United Education $21.63 75 Schools Micom Systems $13.13 69 Computer equipment Diodes $3.25 63 Semiconductor National Technical $3.75 58 Testing equipment Trio-Tech $1.75 56 Chip testing Perceptronics $4.00 45 Defense simulators
* Company’s name has been changed to Andrews Group.
Note: Excludes stocks whose closing price was below $1.50.
10 BIGGEST VALLEY AREA STOCK LOSERS 1ST QUARTER
Closing Price on Percent Line of Stock 3-31-88 Change Business Nu-Med $1.50 -20 Hospitals SFE Technologies $1.50 -20 Electronics Dick Clark $5.25 -13 Entertainment Patlex $13.00 -13 Laser technology Valley Federal $16.00 -9 Savings & loan Amwest $9.50 -8 Insurance 20th Century $16.88 -4 Insurance St. Ives $6.75 -4 Hair care Datametrics $2.94 -2 Computer printers Redken $20.75 -1 Hair Care
Note: Excludes stocks whose closing price was below $1.50.
Source: Lomas Publications, Austin, Tex.
