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With the threat of a fighting war in the Persian Gulf temporarily moderating, the stock market reversed its downward trend and rallied strongly the past two trading sessions, said Irving Katz, director of research at Thomas Green/San Diego Securities.
Whether stock prices continue to go up still depends on the depth of recession, whether the budget deficit increases and in which direction interest rates go, Katz said.
San Diego stocks remained lackluster except for companies that announced stock buy-backs. Price Co., which last week fell to a 1990 low of $30.25, closed Monday at $34.125 after announcing that its board authorized a purchase of an additional $50 million worth of its stock. Under a prior authorization, the company had already acquired 1.5 million shares at an average price of $35.92
Cubic Corp. said it was continuing to buy back its own stock with an authorization to buy up to 500,000 more shares. This is in addition to the 1 million shares Cubic purchased over the past five years. Cubic stock gained $1.375 after the announcement and, at its current price, is selling at only 4.5 times its trailing 12-month earnings of $3.66 and at a 20% discount to its book value of $20.93 as of June 30.
The major casualty of the week was Magma Power, which fell $7.25 to close at $27.75. This geothermal energy stock is now selling at 25.4 times its trailing 12-month earnings. The stock, which recently hit an all-time high of $37, apparently attracted profit-taking.
La Jolla Bancorp has been dropped from the stock listings because its merger with Security Pacific Bank has been made final.
Annual meetings this week include GTI today and Intermark and Computer & Communications Technology Corp. Aug. 30.
A conference on life science stocks will be held Sept. 12 at the La Jolla Marriott from 4 to 7 p.m. The following San Diego companies will make presentations: Agouron Pharmaceuticals, Biomagnetic Technologies, Marrow-Tech and Synbiotics. For reservations, call Keith Diffenderffer at 236-0460.
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