DAIN BOSWORTH INC.: STOCK MARKET SHOWS MIXED BAG FOR SECOND QUARTER
SEATTLE, June 30 /PRNewswire/ -- The stock market offered opportunity for either very wise or very lucky investors during the year's second quarter,according to analysts at Dain Bosworth Inc. The stocks of many public Northwest companies posted strong gains during the quarter, but just as many stocks had a tough time of it. The strongest performance again this quarter was by natural resources companies, but health care and utility stocks did well, too. "Many industries had some of the quarter's top performers and some of the worst performers, as well," says Dain Research Director Paul Combs in Minneapolis. "So, there was little predictability and it continues to be a stock-picker's market. Still, the market has an upward momentum and for the short term we're generally optimistic. Long-term, we are concerned about the impact which higher taxes and the eventual higher cost of health care will have on consumer attitudes and spending." The new Dain Bosworth Northwest 100 index was up 4.76 percent from the end of the first quarter , more than doubling the best performance of any of the major national indexes, to finish at 431.01. Among the major national indexes, the Dow Jones Industrials (+2.36 percent) gained the most, while the NASDAQ (+2.00 percent) worked hard to stay in the plus column at the end of the quarter. The S&P 500 declined 0.25 percent. The Dain Northwest 100 index is divided into seven segments which reflect the most important sectors of the region's economy. The segments cover Northwest utilities, manufacturing, financial institutions, services, health care, technology and natural resources companies. Dain Bosworth tracks the Northwest stocks as one measure of how well the region's economy is performing when compared with the rest of the nation. During the second quarter, the stocks of 47 companies in the Dain Northwest 100 were up, while 53 were down. The biggest winner was Sunshine Mining Co. (+122.22 percent to 2.50). Others in the top five of the Dain Northwest 100 index included Micron Technology Inc. (+57.14 percent to $37.13), Oregon Metallurgical (+44.44 percent to $6.50), Pegasus Gold Inc. (+39.26 percent to $23.50) and Bioject Medical Technology (+38.24 percent to $5.88). The five worst performing stocks in the Dain Northwest 100 index included Video Lottery Technologies (-26.42 percent to $9.75), Nike (-28.06 percent to $55.13), Immunex Corp. (-31.32 percent to $31.25). The region's largest losers during the second quarter were Data I/O and Digital Systems International, both down 33.33 percent to $3.00 and $4.50 respectively. Four of Dain's seven industry segments were up during the second quarter of 1993 while three were down. The leading segment was Dain's list of natural resources companies (+18.06 percent), which was led by Sunshine Mining, Pegasus Gold and Hecla Mining (+34.15 percent). The stocks of six of the total 12 companies in this segment lost ground during the quarter. Among them were Pope & Talbott (-3.45 percent),
Boise Cascade (-4.08 percent) and Louisiana Pacific (-8.57 percent).
"The zigzag pattern of wood prices during the quarter resulted in tepid performance of the forest products stocks," says Dain's paper and forest products analyst George Haloulakos. "BMC West (+31.25 percent), a forest products oriented company in our manufacturing segment, was an exception. Its position as a distributor, rather than as a manufacturer, enabled it to accrue strong earnings gains on higher sales volume, despite volatile product prices." Dain's list of 14 health care companies (+12.69 percent) is new to the index this quarter. Nine companies enjoyed increases during the quarter, while five declined. The biggest gainers were Bioject Medical Technology, CellPro Inc. (+34.92 percent) and Heart Technology (+31.67 percent), while RIBI Immunochem Research (-10.20 percent) and Immunex lost ground. "In April and May, health care stocks showed signs of life in anticipation of a June rollout by the Clinton administration of the national health care reform package," says Dain health care analyst Deborah Wardwell. "With the health care reform package delayed until September, health care stocks stagnated in June." ProCyte Corporation (+26.03 percent) continued to do well in the second quarter. Clinical trial data for ProCyte's lead drug Iamin for the healing of diabetic foot ulcers were presented to the medical community for the first time at the annual meeting of the American Diabetes Association. For the year-to-date, ProCyte also is up 19.48 percent, Wardwell says. The 13 utility companies (+6.24 percent) in the Dain Northwest 100 index performed well this quarter. The winners included McCaw Cellular (+22.67 percent), Lin Broadcasting (+18.51 percent) and Ackerley Communications (+15.63 percent). This segment's largest losers included Montana Power (-3.17 percent) and Washington Energy Co. (-6.77 percent). Dain's list of 17 Northwest manufacturing companies (+3.78 percent) finished on the positive side of the quarterly ledger. The biggest winner was Oregon Metallurgical. Also finishing strongly were BMC West, Flow International Corp. (+26.04 percent) and Morrison Knudsen (+21.56 percent). The biggest losers included Todd Shipyards (-11.90 percent), Oregon Steel Mills (-13.78 percent) and Nike. "Continued strength in transit car shipments and improvement in the engineering and construction business fueled a strong gain in Morrison Knudsen's stock price," Haloulakos says. "Boeing's stock (+5.71 percent) rebounded in the quarter on the news of aircraft orders from various international customers." Dain's list of 17 Pacific Northwest service companies barely ended up in the red, losing 1.24 percent as a group. The biggest winner was Starbucks (+28.95 percent), while Buttrey Food & Drug Stores (+12.28 percent) and Fred Meyer (+6.82 percent) did respectably during the quarter, as well. Those service businesses which lost ground during the quarter did it in grand style. TRM Copy Centers lost 15.79 percent, while Costco (-16.46 percent) kept going downward. Jay Jacobs dropped 22.22 percent and ended up as this segment's biggest loser during the second quarter. "Although up for the year on the strength of several major contract awards, the stock of Pacific Nuclear (-4.00 percent) dropped during the second quarter as investors awaited news of a pending acquisition," Haloulakos said. "The 16 stocks in Dain's technology index (-1.91 percent) were very mixed," says Dain technology analyst and Northwest research manager Glenn Powers, "with some big gainers and some significant disappointments." Micron Technology and In Focus Systems (+23.08 percent) were the big winners. Only six stocks in the group posted increases, while five of the 16 lost more than twenty percent of their total market value during the quarter. "The cellular stocks, McCaw and Lin Broadcasting, both posted big gains during the quarter. AT&T's investment in McCaw is bringing McCaw's vision of a 'seamless national network' closer to reality," Powers says. "Software companies had another tough quarter. Aldus was down 16.67 percent despite making good on its promise to ship a new version of PageMaker, its flagship product, during the quarter. Microsoft (-4.86 percent) was off slightly, partially because of worries about slow adoption of the new Windows NT operating system." "The worldwide increase in demand for computer memory chips has directly benefited Electro Scientific (+26.15 percent), a semiconductor production equipment maker, and Micron Technology, an important memory chip manufacturer," Haloulakos says. "Early in the second quarter, Data I/O announced a thirty percent decline in first quarter earnings and the stock followed with an equivalent decline in its share price." Dain's index of ten regional financial institutions (-2.24 percent) brought up the tail end of the new Dain NW 100 index during the second quarter. The biggest gainers were Horizon Bank (+10.00 percent) and
Washington Mutual (+7.84 percent). The biggest losers among financial institutions were Safeco (-11.39 percent) and Sterling Financial Corp. (-13.33 percent).
"The financial services index was off compared with last quarter as the strong first quarter performance of local banks and thrifts sparked some investors to take profits," say Dain research analysts R. Jay Tejera and Mary Ekman. "Earnings and profitability ratios reached record levels for many institutions, but margin pressure is expected over the rest of 1993 and into 1994." Worries about inflation and the possibility of rising short-term interest rates caused a further sell-off in financial stocks during the quarter. One notable exception was Washington Mutual, up more than last quarter on the basis of ongoing cost benefits associated with the recent acquisition of Pacific First Bank. "Industry fundamentals remain strong and we expect financial services stocks to continue to rebound as interest rates remain at the current low levels," Tejera and Ekman said. Dain Bosworth is a full-service stock brokerage and investment banking firm with thirteen Pacific Northwest offices located in Bellevue, Bellingham, Bremerton, Everett, Seattle and Spokane, Wash.; in Bend, Eugene, Medford, Portland and Salem, Ore.; and in Billings and Great Falls, Mont. Founded in 1909, the Minneapolis-based corporation has 52 offices nationwide, is a member of the New York Stock Exchange and is a subsidiary of Inter-Regional Financial Group (IFG). The firm has more than $200 million in annual revenues through service to 250,000 investors. -0- 6/30/93 /NOTE TO EDITORS: A complete set of stock performance tables is available for your information. /CONTACT: David Endicott of Communication Northwest, 206-285-7070, or after hours, 206-859-6020 for Dain Bosworth Inc.; or Glenn Powers, 206-621-3116, or George A. Haloulakos, CFA, 206-621-3118, or R. Jay Tejera, 206-621-3125, or Deborah L. Wardwell, CFA, 206-621-3106, or Tricia Reebs 206-621-3121, or Mary Ekman at 206-621-3191, or Paul Combs, 612-371-2728, all of Dain Bosworth Inc./
CO: Dain Bosworth Inc. ST: Washington IN: FIN SU: ECO
JH -- SE016 -- 7458 06/30/93 20:19 EDT
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|Date:||Jun 30, 1993|
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