59% of Area Firms Report Stock Gains for 3rd Quarter
Stock prices for 59% of San Fernando Valley-area companies rose during the third quarter, following the broader increase in the overall stock market.
Out of 61 major publicly held companies in the area, 36 saw their stock prices rise in the three months that ended Friday. Twenty-two of those stocks appreciated 10% or more in the quarter.
There were 22 stocks that lost ground, and three were unchanged. Stocks included in the survey include those with headquarters between Glendale and Camarillo, and include stocks that traded for at least $2 at the begining of the quarter.
It was another strong quarter for the Dow Jones Industrial Average, the most widely followed stock indicator, which gained 252.76 points or 10.4% during the period, finally closing the period at 2,692.82 Friday.
36% Gain
The biggest Valley-area gainer for the latest quarter was Lincoln Bancorp, the Encino-based holding company for Lincoln National Bank, which saw its stock rise 36% from $14.38 a share to $19.50.
Lincoln reported in July that its profits for the quarter that ended June 30 rose 82% from a year earlier, to $1.6 million from $881,865.
A number of bank stocks have been rising since a series of California bank mergers were announced in August and September, reigniting speculation about more takeovers in the industry, according to Dan B. Williams, a banking analyst for Sutro & Co. in San Francisco. That speculation has centered around a change in rules that will allow out-of-state banks to acquire California banking institutions beginning in 1991.
Dick Clark Productions’ stock rose 33%, from $4.88 a share to $6.50. The Burbank-based television production company has staged a modest comeback, earning about $2.6 million on sales of $25.6 million in the year that ended June 30, contrasted with a loss of $2.4 million on sales of $21.2 million in 1988. Dick Clark also announced last week that it was developing 11 television specials for the fall season.
Another large percentage gainer during the quarter was HCC Industries, the Encino maker of hermetically sealed electrical connection devices, whose stock rose 30% from $5.75 a share to $7.50.
In August a group of top HCC managers announced an $8.50-per-share leveraged buyout offer. Shortly afterward, a group of public stockholders filed suit to block the bid, but there have been no major developments since. Before the offer, the stock had traded for about $6.25 per share.
Citadel Up
The stock of Citadel Holding Corp., the Glendale holding company for Fidelity Federal Savings & Loan, which Monday changed its name to Fidelity Federal Bank, rose 30% from $39.13 a share to $51. The stock seemed little affected by the announcement Friday that Citadel had decided after two years of consideration not to acquire Valley Federal Savings & Loan.
But Citadel apparently rode the general upward trend of S & L stocks during the quarter. Thrift stocks have risen since it became apparent that Congress would pass a bill bailing out the industry, according to Williams. Investors believe that healthy S & Ls such as Fidelity Federal will be able to lower the interest rates they offer on deposits once the federal government liquidates or sells off the most sickly thrifts. That should improve the S & Ls’ profit margins.
Entertainment giant Walt Disney’s stock rose 28%, from $94.63 a share to $120.88. The Burbank-based company released a number of summertime hit movies, including “Honey, I Shrunk the Kids,” “Dead Poets Society” and “Turner & Hooch.”
Entertainment stocks have also risen, fueled by mergers and acquisitions in the industry, such as last week’s announcement that Sony Corp. would purchase Columbia Pictures.
Superior Gains
Superior Industries International’s stock rose 25%, from $20 a share to $25. Profits for the Van Nuys maker of aluminum and steel automobile wheels increased about 30% in its first and second quarters, contrasted with the same periods last year.
As a maker of aluminum wheels, Superior has positioned itself to take advantage of “one of the few growth trends in the auto industry,” according to Todd Berko, an industry analyst for Drexel Burnham Lambert in New York. Berko said the aluminum wheels are more popular with car makers because they are lighter and more easily machined than steel.
The biggest loser in the area was Valley Federal Savings & Loan, whose stock fell 41%, from $11 a share to $6.50. Much of that drop came Friday when the stock fell 32% on news that Citadel had decided not to acquire the ailing S & L. Valley Federal has been hurt by losses in its All Valley Acceptance Co., a division that makes loans for manufactured housing.
Traditional Industries, an Agoura Hills company that markets camera and film-processing packages, also saw its stock fall precipitously during the period. Traditional’s stock dropped 40% from $9 a share to $5.38. In August, the Federal Trade Commission said Traditional could lose up to $50 million in sales as the cost of complying with an agreement that the company signed with the federal agency--an estimate that Traditional disputed.
Alter Sales Practices
Traditional had earlier agreed to alter certain sales practices after the FTC had alleged that the company made false claims in advertising the packages.
United Education and Software’s stock fell 38% in the latest quarter from $2.63 a share to $1.63. The Encino company, which operates trade schools, said it lost $5 million on sales of $17.5 million for the second quarter, which ended July 31, contrasted with a profit of $1.2 million on sales of $20.1 million a year earlier.
UES’ profits have plunged since last year when a government review uncovered massive problems at a former subsidiary that serviced student loans. The stock has plummeted too, from a high in 1988 of $16.38 per share.
Datametrics Corp. saw its stock fall 31% from $2 a share to $1.38. The Chatsworth maker of computer printers for the military reported that it lost $278,906 on sales of $8.3 million in the period that ended July 29. It was the company’s third straight quarter of losses.
Closing Price on Percent Stock 9/29/89 Change Line of Business Lincoln Bancorp $19.50 +36 Banking Dick Clark Prod $6.50 +33 TV, films HCC Industries $7.50 +30 Electronics Citadel Hldg $51.00 +30 S&L; Holding co. Walt Disney Co. $120.88 +28 Entertainment Superior Ind $25.00 +25 Car wheels Columbia Pict $26.63 +25 Entertainment Am. Magnetic $6.50 +24 Electronic equip. Syncor Intl $6.50 +24 Pharmacy Hemacare Cp $3.69 +23 Medical
Note: Excludes stocks whose Jun. 30, 1989, price was below $2.00 a share
Source: Media General Financial Services, Inc., Richmond, Virginia
10 BIGGEST VALLEY AREA STOCK LOSERS FOR 3RD QUARTER
Closing Price on Percent Stock 9/29/89 Change Line of Business Valley Fed $6.50 -41 Savings & loan Traditional Ind $5.38 -40 Photog. Utd Educ & Soft $1.63 -38 Career schools Datametrics $1.38 -31 Computer printer Semtech Cp $2.25 -28 Electronics Micropolis Cp $3.63 -27 Disk drive Dataproducts $9.63 -26 Computer printer Com Systs $3.63 -24 L-D carrier Saint Ives Labs $12.13 -21 Hair care Nu-Med $6.63 -15 Hospital
Note: Excludes stocks whose Jun. 30, 1989 price was below $2.00 a share
