THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : VIEW FROM THE STREET : Spreading the Wealth : Fast-Rising Stocks Include Makers of Pools, Lingerie
You don’t necesarily have to be high tech to be a hot stock. The high flyers on Wall Street included a wide range of California companies, among them the state’s largest bank, a maker of swimming pools and fishing tackle, and an exotic lingerie maker.
To be sure, the shares of California high-technology firms were among the fastest rising. Cadence Design Systems, a computer software company, saw its stock soar 119% for the year ended April 3.
But Cadence was the only high-tech firm among the top 10 stocks on the “Charging Ahead” list that posted the greatest increases in value. Last year, seven companies involved in high technology dominated the top 10.
Investors “believe the only way to make meaningful gains in the stock market is to invest in high tech,” said securities analyst David S. Leibowitz at American Securities, a New York brokerage firm. “That’s part of the misconception of investors. Many of the biggest winners are in mundane or prosaic businesses.”
It also helps if the company is on the road to recovery or a takeover target.
Ailing New World Entertainment saw its stock appreciate 117.4% during the year, mostly as a result of takeover efforts. Last month the company was sold to Ronald O. Perelman for $145 million.
After struggling for years, a resurgent BankAmerica Corp. impressed investors with a stunning turnaround. As a result, BankAmerica stock--ranked No. 5--leaped 134.9%.
The No. 1 ranked company, Maxxam Inc. of Los Angeles, saw its stock shoot up 225% in the wake of major acquisitions that changed the face of the company. Last May, the firm bought a real estate management and forest products company and later acquired KaiserTech.
“The company has undergone tremendous change in 1988 as a result of a number of acquisitions and mergers,” said Maxxam Senior Vice President Howard Bressler. “It’s really a different company today.”
Some companies have benefited by trying to sharpen a muddled image among investors. Los Angeles-based Anthony Industries, which began as a builder of swimming pools, has become a small conglomerate that makes everything from fishing tackle to fibers used for industrial purposes.
In recent years, however, Anthony has emerged as a company with an emphasis on leisure products. The company-owned subsidiaries that make Shakespeare fishing tackle and K2 skis are leaders in their industries.
“We’ve been quietly trying to get our house in order,” said John Rangel, senior vice president at Anthony. “What we are trying to do now is focus on businesses and try and expand on our strengths.”
Womens’ lingerie also proved a hot seller on Wall Street. From its purple outlet on Hollywood Boulevard, Frederick’s of Hollywood has grown into approximately 150 stores nationwide and a large mail-order operation.
The company has dropped sportswear and swimwear in its stores and now carries only lingerie. It has boosted sales in its catalog by dropping more risque products--a process a company executive described as “desleazing”--to appeal to a broader group of customers.
The strategy has been well received on Wall Street. Frederick’s stock soared 104.8%, placing the company No. 12 in stock appreciation.
“The management team has clearly been putting the right program into position,” said Leibowitz at American Securities.
High-tech firms, far from dominating the list of stocks “Charging Ahead,” made up a significant portion of stocks on the “Falling Behind” list.
Micropolis Corp., ranked No. 3, saw its stock fall 71% after stiff competition in the computer disk-drive business ate into profits.
The stock of Wyse Technology,ranked No. 5, dropped 70%. The company has been hit hard by a drop in demand for its personal computers. Wyse President Philip E. White resigned in January.
United Education & Software suffered the most severe drop. The stock of the Encino-based firm dropped 89% during the year ended April 3.
United’s stock, which traded as high as $16 a share last year, has fallen sharply after a government-led probe found major problems at a former company unit that tracked student loans for lenders.
CHARGING AHEAD Companies ranked by percent gain in stock price.
% change 4/3/89 4/4/88 stock stock stock Rank Company price price price 1 Maxxam Inc. 225.0 27.63 8.50 2 Pacificare Health Systems 175.8 22.75 8.25 3 Ross Stores Inc. 151.1 14.13 5.63 4 FHP International Corp. 137.7 22.88 9.63 5 BankAmerica Corp. 134.9 24.38 10.38 6 St. Ives Laboratories Corp. 127.8 15.38 6.75 7 Vons Cos.** 124.1 16.25 7.25 8 Anthony Industries Inc. 122.6 17.25 7.75 9 Cadence Design Systems 119.0 14.88 6.79 10 New World Entertainment 117.4 6.25 2.88 11 Casablanca Industries Inc. 112.2 10.88 5.13 12 Fredericks of Hollywood 104.8 16.13 7.88 13 Boole & Babbage Inc. 100.0 15.00 7.50 14 International Technology 100.0 6.50 3.25 15 P. Leiner Nutritional* 97.2 17.50 8.88 16 Gradco Systems Inc.* 96.6 14.50 7.38 17 Gap Inc. 96.3 39.75 20.25 18 PhoneMate Inc. 95.0 7.31 3.75 19 Superior Industries Intl. 91.8 23.75 12.39 20 Bridgford Foods Corp. 91.4 18.50 9.67 21 Good Guys Inc. 89.2 8.75 4.63 22 Dataproducts Corp. 88.9 17.00 9.00 23 Digital Microwave Corp. 88.9 29.75 15.75 24 ICN Biomedicals Inc. 88.6 10.38 5.50 25 Barry’s Jewelers Inc.* 85.3 15.75 8.50
*See exceptions, page 38. FALLING BEHIND
Companies ranked by percentage decline in stock price.
4/3/89 4/4/88 Percent stock stock Rank Company change price price 1 United Educ. & Software* -89.3 1.50 14.00 2 Gibraltar Financial Corp.** -85.9 0.56 4.00 3 Micropolis Corp. -70.7 6.88 23.50 4 Inmac Corp. -70.6 6.25 21.25 5 Wyse Technology Inc.* -69.6 5.63 18.50 6 Diceon Electronics Inc. -69.3 8.75 28.50 7 Western Health Plans -67.4 0.94 2.88 8 Computer & Commun.* -64.6 2.13 6.00 9 Olson Industries Inc. -64.5 2.75 7.75 10 Cooper Cos. -64.0 4.50 12.50 11 Thortec International Inc. -64.0 2.25 6.25 12 Fincl. Corp., Santa Barbara -63.8 2.13 5.88 13 Flextronics Inc. -63.5 2.38 6.50 14 Westwood One Inc. -60.4 9.00 22.75 15 Tandon Corp. -58.3 0.94 2.25 16 Ducommun Inc.* -57.1 1.88 4.38 17 Mediagenic -54.6 7.38 16.25 18 Genentech Inc. -54.3 17.13 37.50 19 MAI Basic Four Inc. -52.9 8.00 17.00 20 International Microelectronic -50.0 1.63 3.25 21 Silvercrest Corp. -50.0 1.38 2.75 22 Sunrise Medical Inc. -50.0 3.63 7.25 23 Priam Corp. -50.0 1.06 2.13 24 International Rectifier Corp. -49.2 4.00 7.88 25 System Industries Inc. -48.1 3.50 6.75
*See exceptions, page 38.
**See company notes, page 29.
