Top 10 Firms’ Share Prices Up 50% or More

If you assembled an All-Star team that included a third baseman, a beautician, an accountant and an acrobat, you’d be approaching the variety of this year’s top 10 San Fernando Valley-area publicly traded companies.

The much-discussed diversity of the Valley’s business community is immediately evident as you glance at the list of companies with the region’s top performing stocks: a group that includes a jeweler, a baker and an insulin pump maker.

The firms hail from communities as disparate as Burbank and Calabasas, Lancaster and Woodland Hills.

With the assistance of Media General Information Services, The Times tracks nearly 90 publicly traded companies either based in or with substantial operations in the San Fernando, Santa Clarita, Antelope and Conejo valleys and Ventura County.

Not counting the Ventura County firms or companies that have moved out of the Valley since the list was compiled, 10 members of the 1998 group had share price gains of about 50% or better compared with December of 1997. Seven increased their share prices by about $10 or more.

On the flip side, nearly 60% of the stocks in the Valley index posted a loss for the year, though for most, the seepage was less than $10 per share.

Five of the firms with the weakest share performance are technology-related, even though the tech-heavy Nasdaq index rose nearly 40%.

And in a circumstance that appears to have been designed by A Just Universe to level the playing field, nearly every community represented in the top 10 also has at least one player in the bottom 10.

In terms of the greatest percentage gain, the top pick would be Image Entertainment, the Chatsworth-based firm that licenses and distributes “optical disc programming,” including movies and other entertainment on laserdiscs and DVDs. The firm’s share price went from $3.44 in December 1997 to $10.50 at the close of ‘98, for a gain of 205.2%, or $7.06.

Last year marked somewhat of a turnaround for the 23-year-old company, which is now reinventing itself as a major distributor of DVDs, after serving for years as the largest independent licensee and distributor of laserdiscs in North America.

Just two years ago, the company was grouped with the 10 biggest regional losers, as its share price closed out 1996 with a showing of $3.38, a 55% loss for that year. By December 1997, the share price had gained only 6 cents.

These days, the focus is on the growing market for DVDs, which outsold Image’s laserdiscs for the first time during the quarter that ended in December. DVDs accounted for an estimated 65% of total sales during the quarter.

Another standout on the ’98 squad was MiniMed, the Sylmar-based insulin pump maker that is planning to build an $80-million biomedical center on the North Campus of Cal State Northridge.

It boasted a $66.25 gain in share price value, the largest of any of the companies tracked, for a year-to-year gain of 172.07%.

“The company has done what investors love, which is: Do what you promised and a little bit more,” said Robert Faulkner, a senior analyst with New York-based Hambrecht & Quist.

Faulkner, who has been tracking MiniMed’s stock for almost three years, called 1998 a “breakout year” for MiniMed’s flagship product: its insulin pump.

He said there is “great demand” for the pumps as awareness of diabetes treatments increases, and said of MiniMed, “they have consistently beaten expectations.”

At the other end of the scorecard was PacificAmerica Money Center, a Woodland Hills-based lender in the “sub-prime” segment, in which firms make loans to customers with less-than-stellar credit records.

PacificAmerica earned the dubious distinction of having lost the most share value of the stocks tracked--97.6%--to close out the year at a price of 44 cents, down from $18.25.

“In August, things really turned sour for this segment,” said Richard Fremed, executive vice president of the beleaguered company, which posted a third-quarter 1998 loss of $22.4 million.

The company, which was left at the merger altar last year when Fremont General Corp. pulled out of a proposed deal, is now looking at debt restructuring and is shedding its wholesale loan division to concentrate on the retail market.

“We’re trying to position ourselves where we can start as clean as possible going into 1999,” said Fremed, who’s been with the firm or its ancestors for 20 years. “We feel comfortable that we are going to be able to progress.”

One notch up from PacificAmerica was Spatializer Audio Laboratories, the Woodland Hills developer and marketer of technologies for consumer electronics and computers. Spatializer lost 94% of its share value, to close out the year with a share price of just 9 cents, the lowest-priced stock on the list. Earlier this month, the company announced it would be delisted from the Nasdaq small cap market because of its sagging asset values and bid price.

In terms of the overall outlook for the region’s publicly traded firms, last year some of the parts definitely looked greater than the whole.

As a group, the index of Valley stocks rose by only 5.3%, about a third of the gain of the Dow Industrials and not even a quarter the showing of the broader S&P; 500 index.

That’s due at least in part to the makeup of the Valley team: mostly small to mid-size players. Nationwide, that’s the group hammered hardest by the market’s wild ride last year, as evidenced by the 3.5% dip in the Russell 2,000 index, which tracks smaller stocks.

How concerned should we be with the Valley’s performance?

Not overly.

For one thing, while it’s interesting to track the Valley-area stocks as a group, it’s dangerous to read too much into the aggregate figures because publicly traded companies represent such a small part of the Valley business base--less than 1% by some estimates.

For another, noted E.B. Gendel, associate professor of economics at Burbank’s Woodbury University, “Stocks are not always an indication of what’s going on in the economy.

“There are times when the economy is doing well and the market isn’t,” he noted. “I don’t think we should look at the Valley [index] and say things aren’t going well. You have to look at unemployment and the rate of business growth and things like that.”

Given those caveats, why pay attention at all?

Because Wall Street is keeping score.

And that’s where the money is.

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Valley Stocks

There were some real success stories in the 1998 portfolio of San Fernando Valley-area publicly traded companies, even though as a group, most firms suffered losses. The Times tracks nearly 90 publicly traded companies either based in or with substantial operations in the San Fernando, Santa Clarita, Antelope and Conejo valleys and Ventura County. The index of those stocks rose only 5.3%, mirroring the drops seen in small and medium-cap stocks nationwide. But firms in the region’s burgeoning biomedical business, especially Sylmar-based MiniMed, saw substantial gains.

Strongest Performers

Company: 1. Image Entertainment (Chatsworth)

Closing Price (12/31/98): $10.50

$ Change in 1998: +7.06

% Change in 1998: 205.2

Type of business: Laserdisc / DVD

*

Company: 2. MiniMed (Sylmar)

Closing Price (12/31/98): 104.75

$ Change in 1998: +66.25

% Change in 1998: 172.07

Type of business: insulin pumps

*

Company: 3. Wellpoint Hlth Ntwk (Woodland Hills)

Closing Price (12/31/98): 87.00

$ Change in 1998: +44.75

% Change in 1998: 105.9

Type of business: health care

*

Company: 4. OroAmerica Inc (Burbank)

Closing Price (12/31/98): 9.88

$ Change in 1998: +4.82

% Change in 1998: 95.3

Type of business: jewelry

*

Company: 5. THQ Inc (Calabasas)

Closing Price (12/31/98): 28.00

$ Change in 1998: +12.66

% Change in 1998: 82.5

Type of business: interactive software

*

Company: 6. Rexhall (Lancaster)

Closing Price (12/31/98): 9.00

$ Change in 1998: +3.88

% Change in 1998: 75.8

Type of business: RVs

*

Company: 7. Syncor Intl (Woodland Hills)

Closing Price (12/31/98): 27.25

$ Change in 1998: +11.12

% Change in 1998: 68.9

Type of business: pharmaceuticals

*

Company: 8. K-Swiss Inc (Westlake Village)

Closing Price (12/31/98): 26.88

$ Change in 1998: +10.63

% Change in 1998: 65.4

Type of business: athletic footware

*

Company: 9. Incomnet Inc (Woodland Hills)

Closing Price (12/31/98): 1.75

$ Change in 1998: +.56

% Change in 1998: 47.1

Type of business: long distance

*

Company: 10. Cheesecake Factry (Calabasas)

Closing Price (12/31/98): 29.66

$ Change in 1998: +9.32

% Change in 1998: 45.8

Type of business: restaurants

*

Weakest Performers

Company: 1. PacAmer Mon ctr (Woodland Hills)

Closing Price (12/31/98): $0.44

$ Change in 1998: -17.81

% Change in 1998: -97.6

Type of business: lender

*

Company: 2. Spatializer Aud Lb (Woodland Hills)

Closing Price (12/31/98): .09

$ Change in 1998: -1.41

% Change in 1998: -97.0

Type of business: audio technology

*

Company: 3. Pico Prods. (Lake View Terrace)

Closing Price (12/31/98): .22

$ Change in 1998: -1.22

% Change in 1998: -84.7

Type of business: electronics/components

*

Company: 4. Chad Therapeutics (Chatsworth)

Closing Price (12/31/98): 1.63

$ Change in 1998: -7.25

% Change in 1998: -81.6

Type of business: medical devices

*

Company: 5. Simulations Plus (Lancaster)

Closing Price (12/31/98): .81

$ Change in 1998: -2.57

% Change in 1998: -76.0

Type of business: software

*

Company: 6. Internat Remote Im (Chatsworth)

Closing Price (12/31/98): .81

$ Change in 1998: -2.57

% Change in 1998: -76.0

Type of business: diagnostic imaging

*

Company: 7. MRV Communicatns (Chatsworth)

Closing Price (12/31/98): 6.19

$ Change in 1998: -17.69

% Change in 1998: -74.1

Type of business: network equipment

*

Company: 8. Vertel Corp (Woodland Hills)

Closing Price (12/31/98): 1.69

$ Change in 1998: -3.00

% Change in 1998: -64.0

Type of business: telecom networking software

*

Company: 9. Golden State Bncp (Glendale)16.63

Closing Price (12/31/98): -20.81

$ Change in 1998: -20.81

% Change in 1998: -55.6

Type of business: banking

*

Company: 10. Iwerks Entertainment

Closing Price (12/31/98): 1.06

$ Change in 1998: -1.19

% Change in 1998: -52.9

Type of business: rides/theaters

Source: Media General Financial Services Inc., Richmond, Va.