Majority of Local Stocks Decline in 3rd Quarter : Market: Nearly 80% of Valley-area holdings record drops in their prices for the period, mirroring the overall slump on Wall Street.
The third quarter was a dismal time for the stock market, and San Fernando Valley area stocks were no exception. Only 15 out of 73 public companies in the Valley and surrounding areas recorded gains in their stock prices during the third quarter. But 58 stocks, or 79%, declined in price during the three months that ended Sept. 30.
The drop in Valley area stocks mirrored declines in the broader stock market, as the Persian Gulf crisis, record oil prices and fears of a looming recession scared investors. During the third quarter, the Dow Jones Industrial Average fell 15% to 2,452.48, while the broader Standard & Poor’s 500 index fell 15% to 306.05.
Of 73 public companies spanning from Glendale to Oxnard, investors largely rewarded companies with strong earnings gains and punished companies that reported losses.
Pacific Southwest Corp.’s stock was a big gainer for the quarter, rising 62% to close at $5.88 a share on Friday. The Northridge real estate and financial services company said last month it expected to report net income of $800,000 to $950,000 for the fiscal year that ended July 31, on revenue of $5.5 million. In the previous year, the company lost $71,000 on $2.8 million in revenue. Pacific Southwest attributed the turnaround in part to a debt payment in its fourth quarter. The company also got a new chairman last year--Ronald Langley, who worked for New Zealand’s second largest concern. He plans to turn Pacific Southwest into a much bigger company by investing in real estate and mortgage service companies.
Another big winner was American Ecology, whose stock jumped 55% in the latest quarter to $8.50 a share. After two years of poor results, the Agoura Hills waste-disposal services company earned $1.7 million in the second quarter that ended June 30, compared with a $2.8 million loss in the same period in 1989. Revenues in the latest quarter rose 52% to $14.7 million.
Amgen, a biotechnology company in Thousand Oaks, saw its stock rise 15% to $44.75. Amgen’s profits soared to $11.1 million in the quarter that ended June 30 from $835,000 a year earlier. The profit jump came as revenue surged to $71.7 million from $28.5 million, reflecting sales of the company’s anti-anemia drug Epogen.
Investors apparently shrugged off the uncertainty surrounding Amgen’s lengthy court battle against rival Genetics Institute in a patent case involving the rights to sell Epogen in the United States. Amgen is the only company licensed to sell Epogen so far, but Genetics Institute has a rival patent to the drug and has been seeking approval to sell the drug in the United States and invalidate Amgen’s patent.
TransTechnology Corp., a Sherman Oaks defense and industrial products concern, saw its stock end the quarter up 2% to $6.75 a share. It reported a $294,000 profit in its fiscal first quarter that ended June 30, compared with a $3.36 million loss a year earlier and a $4.6 million loss in the fiscal fourth quarter. Revenue increased 5% to $43.2 million. The company attributed the profit turnaround to efforts by its new chief executive, Ralph Hutchins, to realign operations and to the sale of two money-losing divisions.
MCA Inc., the Universal City entertainment conglomerate, finished the quarter up 6% to $58.75 a share. But the stock soared from $34.50 last week on news the giant Japanese concern Matsushita Electrical Industrial Co. is talking about buying MCA.
But a fledgling entertainment company, Ventura Entertainment Group, saw its stock jump 7% to $8 a share despite posting another loss. In the quarter ended April 30 Ventura lost $961,216 on $1.4 million in revenues. Ventura Entertainment’s strategy is to produce TV shows and movies at its low-cost studio in Utah.
House of Fabrics also saw its stock climb 2% in the quarter to $24.88. The Sherman Oaks operator of fabric and sewing stores reported a profit of $703,000 in its fiscal second quarter that ended July 31, contrasted with a $119,000 loss a year before. The turnabout came on an 8% increase in sales to $87.4 million, and reflected the company’s shift from small, shopping-mall outlets to large superstores, the company said. A House of Fabrics spokesman also said investors might be favoring the company because the fabric business is considered relatively recession-resistant.
A big loser for the quarter was New Image Industries, whose stock soared after it went public in August, 1989, from an offering price of $6.50 a share to $16. But the Canoga Park company, which makes computer systems for hair stylists and landscape architects, saw its stock fall 71% in the third quarter to $2.50. The company also reported a loss of $741,000 in its fourth quarter that ended June 30 as sales slipped 2% to $2.81 million. New Image also recently said it expected to report a loss for the quarter that ended Sept. 30, and announced plans to buy back up to 500,000 shares of its common stock.
The stock of ATI Medical, a Glendale-based concern that rents medical equipment to hospitals and the entertainment industry, nose-dived 58% in the quarter to $5.25. The company said in late August it would report a loss for its fourth quarter that ended July 31 because of softer demand for its products and $500,000 in costs related to starting a home health-care subsidiary. Also in August, an investment group that includes Roxbury Partners, a Washington investment partnership, cut its stake in ATI to 3.46%.
Stock in HemaCare Corp., Sherman Oaks, tumbled 56% to $1.50. The company, which provides blood-related services, lost $295,576 in the second quarter that ended June 30, compared with a profit of $27,804 a year earlier. The loss came despite a 31% increase in revenues to $1.87 million, and was blamed on the costs of beginning clinical trials for a proposed AIDS treatment and on losses at its new laboratory division.
Valencia-based Huntway Partners, a limited partnership that produces liquid asphalt and other oil products, saw its unit price drop 55% to $4.25, in keeping with declines in many stocks that are sensitive to climbing oil prices. In August, the company said it was cutting its quarterly distribution to unit holders despite reporting a second-quarter profit of $3.38 million, compared with a year-earlier loss of $475,000. It said the distribution cut reflected an expected deterioration in operating margins because of lower liquid asphalt prices and “rapidly rising crude oil costs,” the key ingredient in asphalt.
Struggling Camarillo wheelchair maker Everest & Jennings saw its stock fall 53% in the quarter to $1.88. The company, once the nation’s dominant wheelchair manufacturer, has been trying to recover from a disastrous attempt to diversify into other medical products during the 1980s. In an attempt to stay solvent, the company last month laid off 200 workers--about a third of its local work force. The layoffs came after Industrial Equity Pacific Ltd., a major shareholder in Everest & Jennings, said payments on $14 million in loans it made to the wheelchair maker were overdue.
10 BIGGEST VALLEY AREA STOCK WINNERS FOR 3RD QUARTER
Closing Price on Percent Stock 9/28/90 Change Line of Business Pac. Southwest Corp. $5.88 +62% Real Estate Amer. Ecology $8.50 +55% Waste disposal Amgen $44.75 +15% Biotechnology Litton Industries $79.00 +11% Defense California Amplifier $1.75 +7% Satellite dishes Ventura Entertainment $8.00 +7% Entertainment MCA Inc. $58.75 +6% Entertainment Spear Finan. Services $2.94 +2% Stock brokerage TransTechnology $6.75 +2% Defense House of Fabrics $24.88 +2% Fabric stores
Note: Excludes stocks whose June 29, 1990, price was below $1.50 a share
Source: Media General Financial Services, Inc., Richmond, Virginia
10 BIGGEST VALLEY AREA STOCK LOSERS FOR 3RD QUARTER
Closing Price on Percent Stock 9/28/90 Change Line of Business New Image Industries $2.50 -71% Computer systems ATI Medical $5.25 -58% Medical equipment HemaCare $1.50 -56% Blood services Huntway Partners $4.25 -55% Liquid asphalt Everest & Jennings A $1.88 -53% Wheelchairs Dick Clark Productions $3.50 -48% Entertainment Tandon $1.63 -47% Computers Live Entertainment $12.88 -46% Entertainment CU Bancorp $8.00 -43% Bank Brajdas $1.75 -42% Electronics
Note: Excludes stocks whose June 29, 1990, price was below $1.50 a share
