AST Stock Shone in Lackluster Year for Orange County : Orange County 1990: The Year in Review

Jeffrey Kilpatrick figured he had a great product when he launched the Orange County Growth Fund in 1988: Let investors profit from the area’s booming growth by buying into a fund that included stocks of some of the county’s hottest public companies.

But with just a few exceptions, those stocks tend to be highly volatile. And in 1990 they plunged further and faster than the market as a whole: The Orange County Growth Fund ended the year as one of the poorest-performing mutual funds in the nation.

Still, the Costa Mesa broker’s basic premise was correct--the stocks in his fund echoed the performance of most other public companies in the county.

Unfortunately, 1990 was the year that most everything fell.

The superstar was AST Research Inc., a computer maker whose stock value soared, rising 259% over the year as a series of hot new products propelled the company’s sales and earnings.

The stocks of a handful of medical services and medical products companies also increased during the year, lending credence to the belief that the health industry tends to weather an economic downturn better than most. Or, as some analysts say, people get just as sick when the economy is down as when it is up.

Varco International and Petrominerals, two of the county’s three publicly held, energy-related firms, posted stock price gains in the wake of Iraq’s invasion of Kuwait and the resulting hike in oil prices. The third firm, Fluor Corp.--which is having one of its best years on record--would have posted a slight gain for 1990, except for a 75-cent drop in its common stock price in Monday’s trading.

Of 95 publicly traded Orange County companies followed by The Times for the past 12 months, only 17 finally ended the year with stock prices higher than on the final trading day of 1989. The average price of a share of a county-based company’s stock fell 20.5% over the year--a bigger decline than posted by any of the national indexes.

So, an investor who had bought one share of each stock on The Times list at the end of 1989 and sold those shares as the 1990 market closed Monday would be $170.98 poorer.

Of course, few people buy stocks indiscriminately.

But it took a lot of firsthand knowledge about local companies to make money on Orange County stocks last year.

An example of that is AST Research, which ran counter to the computer and electronics industry as a whole. Only two other companies in those industries, software developer PDA Engineering and high-technology and robotics maker Odetics, posted stock value gains for the year.

And investors who bought shares in real estate-related companies’ stock in 1990--even those who bought at the bottom--are facing a long holding period before they see any appreciation, analysts say.

During the year, two new companies, Birtcher Medical and Nationwide Health, made their debut on The Times’ Orange County stock list, both moving their headquarters to the county. Five other firms joined the list because they went public in 1990.

Offsetting that, 11 companies disappeared from the list, most because of bankruptcies or other financial problems.

Among them were Mercury Savings & Loan; three computer companies: EECO Inc., Metropolitan Circuits and Phoenix Group International; and two construction-related firms: the National Lumber home improvement chain, which went bankrupt, and Silvercrest, a mobile-home maker that was dropped from the over-the-county listings for failure to file necessary financial reports.