Orange County’s largest publicly traded companies combined for a cool $20 billion boost to their market valuations over the past year, thanks to strong gains by Allergan Inc. and Western Digital Corp., the largest representatives of the local healthcare and technology sectors.
The 100 largest public companies based here account for $134 billion in market value overall, according to the Business Journal’s annual list, the centerpiece of this week’s Special Issue (list starts on page 10; related stories throughout).
That’s an 18.7% increase compared with the 100 companies on last year’s list, which had a slightly different roster of companies.
The list ranks OC-based companies by their market capitalization as of March 31.
Three-quarters of the companies had increases in their stock prices over the preceding 12 months, and slightly more than 20% of the field saw shares more than double.
The $134 billion in combined market value compares with Foster City-based Visa Inc., the 25th largest company in the U.S. by market value.
The percentage increase in total market value outpaced strong revenue gains for the companies on the list. This year’s crop combined for $113 billion in revenue during 2013, a 10.5% increase from the prior year.
Nearly 70% had year-over-year gains in sales, including nine of the 10 largest public companies. It’s the fourth year running that companies on the list have had a cumulative increase in sales.
Profitability was a little harder to achieve for many of the companies; about 40% reported losses in 2013, including five of OC’s 25 largest public companies.
The companies combined for net income of $4.1 billion last year, a 30% decline from 2012 levels.
Gains at Top
The $20 billion year-over-year jump in the combined market capitalization for the companies—the increase alone is the equivalent of the estimated fortune of George Soros, the 19th wealthiest person in the U.S.—was in line with gains seen on Wall Street over the past year.
The S&P 500 index, for example, is up more than 20% over the past 12 months and last week hit a record high, while the Nasdaq Composite Index is up nearly 33% over the same period.
Nearly two-thirds of the $20 billion in stock gains came from the top two spots on the list.
Irvine-based drug maker Allergan consolidated its position as OC’s largest public company last year, with a $3.7 billion or 11% increase in its capitalization to $37 billion (see story, page 1).
Shares of the company are now trading near their highest-ever levels, and an analyst with Citigroup late last month said the maker of Botox and other drugs could see its stock increase another 13% in the near term.
The gain by Western Digital, meanwhile, came to a $9.6 billion jump in market value over the past year. The surge sent the company past Irvine-based chipmaker Broadcom Corp. as OC’s most valuable technology company by market value last October.
Shares of Western Digital have continued to surge since then; its stock hit a 52-week high last week, and shares are up about 13% so far this year to a market value of about $21.7 billion. Its gains are partly due to the company’s expansion of cloud-based storage products and less reliance on products geared for personal computers, driven in part by several recent acquisitions.
Broadcom—whose shares are down about 7% over the past year, giving it a market value of $18.3 billion—had been the county’s most valuable technology company for nearly a decade until last October.
Shares of Broadcom peaked in 2000 when the company’s market value reached $60 billion.
Not including the gains of Allergan and Western Digital, the remaining 98 companies on the list saw an average gain of about 11.6% in market value over the prior year, lagging most general stock indexes over that period.
Other Gains
There were some standout performers outside of the top two entries.
Santa Ana-based Ingram Micro Inc., No. 5, had a 54% increase in its stock over the past year, boosting the distribution company’s market value to nearly $4.6 billion (see story, page 1).
Ingram also had a 12.5% jump in revenue last year—no small feat for a company whose traditionally high-volume, low-margin business brought in $42.5 billion in revenue last year, accounting for nearly 37% of the total sales on the list.
Anaheim-based Questcor Pharmaceuticals Inc., No. 6, had a 103% stock jump last year, the biggest of any company among the top 10.
Notable gains for Allergan, Questcor and Newport Beach-based Alliance HealthCare Services Inc.—No. 38 with a 335% jump in market value to $350 million—echoed what was seen across the country for healthcare companies lately.
The S&P Health Care Index 500 is up 55% over the past two years, compared to the S&P 500’s 32% gain, the Wall Street Journal noted last week.
Irvine Leads
This week’s list includes 18 companies that had a market value of more than $1 billion as of March 31, compared with 20 a year ago.
No. 17, CorVel Corp. in Irvine, which provides workers’ compensation software and services to the healthcare industry, was the lone new entry among companies topping the $1 billion mark this year.
Declines in share prices for Irvine-based Endologix Inc., No. 24, and two Newport Beach-based companies, Clean Energy Fuels Corp., No. 26, and Acacia Research Corp., No. 27, knocked each from the ranks of the $1 billion club the list.
Forty-four of the public companies on the list are based in Irvine, the most of any city. Newport Beach is second with 11 companies, followed by Santa Ana with 10.
