Most Regional Stocks Fall as Market Changes Course : Trends: Investor skittishness over rising interest rates and a slowdown in takeovers have reduced stock prices.
Prices of most regional stocks fell in this year’s first quarter, matching an overall decline in the stock market.
A survey of 70 local companies showed losers outpaced gainers by more than 2 to 1, with 46 stocks declining and 22 advancing. Two were unchanged in the quarter ended March 31. Among the stocks losing ground, 29 lost 10% or more of their value.
The survey, conducted by Media General Financial Services of Richmond, Va., covered publicly held concerns in the San Fernando and Santa Clarita valleys and in Ventura County, with headquarters located from Glendale to Ventura.
The losses were in step with the first-quarter downturn in the market generally, where a slowdown in takeover activity and investor skittishness over rising interest rates pushed stocks lower.
The Dow Jones Industrial Average, which rose 27% last year, slipped 1.7% in the latest quarter, while the broader Standard & Poor’s 500 composite index fell 3.8%.
The NASDAQ composite index, a broad measure of the over-the-counter market--where most of the local stocks trade--dropped 4.2% in the quarter.
The biggest winners and losers in the region came from an eclectic mix of industries. The gainers included stocks in the computer products, telecommunications and entertainment industries. Some of the poor performers included savings and loans, hospitals, real estate, waste disposal and financial services.
The biggest gainer in the quarter among local issues, just as it was for all of 1989, was Software Toolworks, a Chatsworth producer of games, teaching exercises and other software for personal computers. After nearly tripling in price last year, the company climbed another 75% in the quarter to $26 a share.
In the nine months ended Dec. 31, Software Toolworks’ profit and sales more than doubled from year-earlier levels. And last month the company bought Mindscape Inc., which makes games for the popular Nintendo computer-game system, in a $20-million stock swap.
The worst showing was turned in by Valley Federal Savings & Loan, an ailing Van Nuys-based thrift whose stock tumbled 74% in the quarter to 81 cents a share. Federal regulators, having imposed new capital requirements on S&Ls; to cushion them against future losses, ordered Valley Federal to stop making loans and investments until the thrift designs a plan to bolster its capital.
Nu-Med’s stock also suffered a setback, falling 41% to $3.38 a share. The Encino-based hospital operator has continued to post losses--in the six months that ended Oct. 31 it lost $1.9 million on revenue of $139.4 million. Also, Nu-Med said last month that although it completed the sale of a Florida hospital for $68 million, its negotiations to sell three other hospitals collapsed.
Everest & Jennings International’s Class A stock fell 33% to $5.38 a share after the Ventura-based wheelchair maker said it expects to post a net loss of $33 million for its fiscal year ended Dec. 1, including $18.5 million for restructuring costs.
Dataproducts’ shares also fell despite the company’s restructuring efforts, which included the Woodland Hills company’s repurchase of 20% of its stock for $10 a share. The remaining shares closed the quarter at $6.50 a share, down 28%. The stock has drifted lower since the computer-printer maker fought off a takeover threat a few months ago.
In contrast, Micropolis, whose financial health and stock price slumped in 1989, rebounded in this year’s first quarter. Its stock rose 32% to $4.63 a share as the Chatsworth producer of disk drives, which store computer data, reported a smaller loss in its fourth quarter ended Dec. 29, compared with a year earlier. The company also has built up its cash reserves, and announced it secured $33 million of new credit with its lenders.
The stock of Tekelec, a maker of telecommunications testing equipment, also gained even though Tekelec’s earnings have been slumping of late. The stock climbed 27% to $10.75 a share despite the Calabasas company’s February announcement that its fourth-quarter 1989 profit dropped 36% on a 9% decline in revenue.
Flamemaster, a Sun Valley producer of coatings and sealants, joined the biggest gainers when its stock rose sharply in the last few days of the quarter. It finished the period with a 24% gain to $5.75 a share.
The jump came after Flamemaster chairman Joseph Mazin said the company expects a 59% increase in second-quarter profit, and that he planned to recommend that Flamemaster’s directors raise the company’s common-stock dividend.
TOP 10 VALLEY AREA STOCK WINNERS FOR 1ST QUARTER
Closing Price on Percent Stock 3/31/90 Change Line of Business Software Toolworks $26.00 +75 Software Micropolis $4.63 +32 Disk drives Tekelec $10.75 +27 Telecommunications Amgen $61.75 +26 Biotechnology Flamemaster $5.75 +24 Coatings ATI Medical $9.50 +13 Medical equipment Superior Industries $21.25 +10 Car wheels General Motors $45.88 +9 Autos Com Systems $3.25 +4 Telecommunications Teledyne $70.00 +2 Aerospace
Note: Excludes stocks whose Dec. 31, 1989, price was below $2.00 a share
Source: Media General Financial Services, Richmond, Va.
TOP 10 VALLEY AREA STOCK LOSERS FOR 1ST QUARTER
Closing Price on Percent Stock 3/31/90 Change Line of Business Valley Federal $0.81 -74 Savings and loan Nu-Med $3.38 -41 Hospitals Everest & Jennings A $5.38 -33 Wheelchairs Networks Electronic $4.50 -31 Aerospace American Ecology $4.50 -28 Waste disposal Dataproducts $6.50 -28 Printers Hotel Investors $5.00 -26 Real estate St. Ives Labs $7.63 -24 Shampoos Huntway Partners $8.75 -21 Asphalt Datron Systems $9.75 -20 Communications
Note: Excludes stocks whose Dec. 31, 1989 price was below $2.00 a share
