Summer melts Los Angeles-area financial stocks: top loser is Coast Savings; top gainer is Valley Fed.

Summer melts Los Angeles-area financial stocks

Top loser is Coast Savings; top gainer is Valley Fed

Local financial stocks were hammered in a shaky July on Wall Street, as investors worried about hidden sour loans in lending institution's portfolios.

The biggest loser among local stocks in July was Coast Savings, the $10.9 billion Los Angeles-based thrift.

Coast closed at $3.50 a share on July 31, off 47.17 percent from June. At the end of July, Coast was off 82.8 percent from a 52-week high of $20.375.

A Coast spokesman said "the weak performance of financial institutions in the market generally, and the preceived weakness of California real estate in East Coast media," was responsible for the Coast price action in July.

At current prices, Coast Saving stock is offering a dividend yield near 12 percent a year.

No. 2 loser for the month was CalFed Inc., another big Los Angeles-based thrift, which fell 38.06 percent in July to $10.37 a share.

"CalFed traded as high as $42 in 1986," said Robert Maltbie, vice president with brokerage house PaineWebber in downtown Los Angeles. "Its closing price of $16.75 represented an all-time low."

The entire thrift industry has been under duress for poorly performing loans to the nation's Sunbelt, and, more recently, the Northeast. Some investors have speculated that California real estate will be the next to tumble, taking down local thrifts with it.

Some short-traders (speculators who bet the price of a stock will go down) are said to be amassing short positions in the stock of Security Pacific Corp., the big Los Angeles-based bank, because of suspected bad loans yet uncounted on the books.

Four stocks on the July most-down list were also in June's list of biggest losers, noted Maltbie: computer imaging company New Image Industries; electronics designer and manufacturer Network Electronics; senior homebuilder Leisure Technology; and computer software maker Software Toolworks.

The West Los Angeles-based Leisure Technology Inc., brainchild of chairman and chief executive Michael Tenzer, has been battling a heavy debt load but declining sales in its senior home developments in New Jersey. The stock is off from a 52-week high of $5 a share (in late trading last week, Leisure Technology sank to 75 cents a share).

Big gainers for July included, remarkably, Valley Federal Savings in Van Nuys, which investors presumably assume has weathered the worst.

The thrift's stock was up 75 percent. The company announced better earnings in July and recently had a business plan approved by federal regulators. Still, Valley Federal traded at $14 a share last year, noted Maltbie. (Los Angeles Mayor Tom Bradley is a former member of the Valley Federal board of directors).

The Woodland Hills-based manufacturer of military training simulators Perceptonics Inc. was the month's second-best performer, leaping 64.10 percent. The $28.9 million (annual revenues) company has posted four consecutive profitable quarters after losses in earlier years, and has landed several large contracts. "It is the second straight month Perceptronics made the most-up list," said Maltbie of PaineWebber. In the last two months, Perceptronics is up 100 percent.

The No. 3 gainer in July was MAXXAM Inc., up a hefty 51.95 percent. The West Los Angeles-based manufacturing conglomerate, with $2.24 billion in revenues, has been bouyed by good earnings reports.

For the month, Los Angeles stocks pretty much mirrored the nation, said Maltbie. Declines led advances by a 2-1 ratio. In July reported company earnings have fallen below expectations or failed to outperform earlier quarters, he said.

PHOTO : CalFed: July's second biggest loser