Local Stocks Cool Down Amid Fears of Stalled Growth : Market: Composite index of area firms’ performance shows second-quarter slowdown.
A boom in local stocks that started earlier this year subsided in the second quarter as fears took hold that economic recovery is sputtering.
The composite index of 105 companies in the San Fernando, Santa Clarita and Conejo valleys and Ventura County climbed a modest 7% in the quarter that ended June 30, according to Media General Financial Services, a Richmond, Ga., firm that compiles the list for The Times. That’s well behind the rate of growth of several national indexes, including the Dow Jones industrial average, which rose by nearly 10% in the same period. And it’s in sharp contrast with the previous quarter, when local stocks surged 11.5%, steaming past the national indexes, and fueling hopes that a rosier local economy was at hand.
Those hopes have now given way to rumblings of gloom. The Dow’s continued strong performance has occurred despite nervousness about a pending economic lull. The growth has been driven by strong earnings across the board, and especially growth in high-tech industries such as semiconductors. But some market analysts are uncomfortable with investors’ seemingly blind optimism, unchecked by forebodings about the economy’s next cycle. They warn that an unsteady economic environment, rocked by rising interest rates, is setting the stage for increased volatility in national markets in the quarter to come.
The more tempered growth of local stocks was helped by healthy results in regional technology firms. Overall, a majority of local stocks--60--increased in value in the second quarter, while 39 decreased.
Leading the pack was American Mobile Systems Inc., a Woodland Hills provider of digital mobile radio systems. Price per share in American Mobile Systems rose 109% to $8.50 in the second quarter as the company announced it would be acquired by Nextel Communications Inc. Nextel hopes its products, digital two-way radios that provide paging as well as voice communications, will compete with cellular phones, opening a new battlefield in the ongoing information-technology revolution.
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Diodes Inc., a Westlake Village maker of semiconductor components, came in second, its per-share price rising 100% to $11.25. The semiconductor market worldwide keeps surprising with its breathless pace of growth--nearly 30% last year--and projections are that growth will continue only slightly more slowly this year.
Diodes Inc. makes semiconductor components for a variety of electronic equipment, targeting some of the fastest growing semiconductor markets, such as the automotive, computer and telecommunications industries. Its profit nearly doubled in the first quarter that ended March 31 to $982,764 on a 62% increase in revenues to $14.2 million.
Interlink Electronics, a Camarillo maker of computer pointing devices, was the third-place winner. Its stock price increased by 89% to $13.75 per share.
Other technology firms dominate the remainder of the winners list, which includes firms such as Vitesse Semiconductors, a Camarillo maker of powerful, high-performance integrated circuits; Chad Therapeutics, a Chatsworth maker of portable oxygen units for lung patients, and Newbury Park-based Semtech Corp., a semiconductor company.
The big loser of the second quarter was Positive Response Television Inc., a Sherman Oaks firm that produces infomercials, which was slapped with a shareholder lawsuit in May. Positive Response’s stock price fell 64% to $4.88 per share as the quarter ended.
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Astro Sciences Corp., a Chatsworth maker of computer networking products, watched its stock price plummet 41% to $3.38 per share despite narrowing its loss to $37,930 and posting record revenues of $5.16 million in the fourth fiscal quarter that ended March 31.
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10 Biggest Regional Stock Winners for 2nd Quarter
Closing price on Percent change in Stock 6/30/95 2nd quarter Am Mobile Systems $8.50 +109 Diodes Inc. $11.25 +100 Interlink $13.75 +89 Electronics Vitesse Semicon $7.63 +61 Chad Therapeutics $14.88 +57 Semtech Cp $16.75 +46 Eltron Internat $20.25 +45 Voice Powered $3.25 +44 3-D Systems Cp $18.50 +39 Syncor Intl $10.88 +38
Stock Line of business Am Mobile Systems Mobile radios Diodes Inc. Semiconductors Interlink Computer products Electronics Vitesse Semicon Semiconductors Chad Therapeutics Medical Semtech Cp Semiconductors Eltron Internat Bar codes Voice Powered Electronics 3-D Systems Cp Stereolithography Syncor Intl Nuclear Pharmacies
Note: Excludes stocks whose March. 31, 1995, price was below $2.00 a share
Source: Media General Financial Services Inc., Richmond, Va.
10 Biggest Regional Stock Losers for 2nd Quarter
Closing price on Percent change in Stock 6/30/95 2nd quarter Positive Resp TV $4.88 -64 Astro Sciences $3.38 -41 T HQ Inc. $1.94 -37 Xircom $10.13 -29 OroAmerica Inc. $3.63 -27 Haskel Intl Cl A $7.00 -26 Summit Care Cp $18.25 -23 Variflex Inc. $12.00 -23 Wellpoint Hlth $28.25 -19 Ntwk Cosmetic Group USA $2.00 -18
Stock Line of business Positive Resp TV Infomercials Astro Sciences Computer networks T HQ Inc. Video games Xircom Computer networks OroAmerica Inc. Jewelry Haskel Intl Cl A Hydraulic equipment Summit Care Cp Nursing homes Variflex Inc. Skates Wellpoint Hlth Health care Ntwk Cosmetic Group USA Cosmetics
Note: Excludes stocks whose March. 31, 1995, price was below $2.00 a share
Source: Media General Financial Services Inc., Richmond, Va.
