The economy apparently is entering a recession,...
The economy apparently is entering a recession, causing flutters in the hearts of stock market investors, said Irving Katz, director of research at Thomas Green/San Diego Securities. With this being the time to take losses for tax purposes or gains if they are available, stocks continue the move downwards, he said.
Some San Diego stocks managed to buck the trend and made significant moves. A new high was recorded by San Diego Gas & Electric at $44.125, an indication that investors are seeking a safe haven for their money. SCEcorp, its proposed merger partner, likewise hit a new high of $38.625. Magma Power, an alternative geothermal energy company, also reached a new high, $24.50.
Price Co. gained $4.75 for the week as investors began to realize that, of the entire group of wholesale clubs, the Price Co. has the lowest price-earnings multiple, the largest sales per outlet and highest gross margins. Price Co.’s multiple is 21.7 times earnings. That’s cheaper than the 30 times earnings multiple of Pace Membership, which is to be purchased by K mart, and the 32 times earnings multiple of Costco Wholesale.
HomeFed gained $1.50 as analysts began to realize that the recent sell-off from a high of $47.50 was overdone. The stock is now selling at 20% below its tangible book value and at a price-earnings ratio of six times earnings.
Biomagnetic Technologies recovered somewhat from the previous week’s low of $5.25 and closed at $6.50. The company went public at $9 a share last summer.
Many of the nation’s defense contractors were devastated in Monday’s market as defense cutbacks loom on the horizon. San Diego defense stocks, which were already selling near their 52-week lows, have not yet reacted. In fact, Maxwell Laboratories reported strong first-quarter earnings of 38 cents a share, versus 29 cents a share the previous year, and the stock gained $1.50 for the week.
Among the new lows was TCS Enterprises at $3.125. One of the company’s major shareholders is Lincoln Savings, whose assets are now in the hands of the Resolution Trust Corp. Another company hitting a new low was Great American Bank, which dropped to $7.125, where it is selling at less than 50% of its tangible book value.
A new addition to the new list of lows was Henley Group, whose headquarters are being transferred out of San Diego. Apparently all the spinoffs and lack of earnings haven’t raised investor confidence, as Henley stock recorded a new low of $55.75, down from its high this year of $74.
