June turned out to be a pretty good month for Orange County technology and other stocks in their climb back from the spring market meltdown.
The Business Journal’s Roth Capital Partners Billion-Dollar Club posted a 19% increase for the four weeks through June 29. The index, which includes companies with $1 billion or more in market capitalization, was driven by solid June run-ups at leading tech companies: DDI Corp., up 140%; Newport Corp., up 88%; Broad-com Corp., which was added to the S & P; 500 index after the close Friday, up 41%; Quest Software Inc., 32%; Emulex Corp., 32%; QLogic Corp., 22%; and Conexant Systems Inc., 14%.
Still, only one of the eight technology stocks in the Billion-Dollar Club,high-flying fiber-optic gear maker Newport,has exceeded its March highs.
“In June, people became comfortable that the growth really lies in technology,” said Russ Tolander, director of research for Irvine-based Roth Capital Partners.
One thing the big gainers have in common: they all play a big role in moving data faster.
“Those building the pipe in the new economy behaved much better than the dot-coms,” Tolander said. “The institutional world has far more conviction in infrastructure plays vs. service or traffic providers.”
The Billion-Dollar Club outperformed its peers, such as the Nasdaq, which was up 8% in the same period. The S & P; 500 was down 0.4%, while the Dow Jones Industrial Average was down 2.4%.
The Roth Capital Partners OC 100, which tracks OC companies with market caps of $25 million to $1 billion, also posted a sizable June gain: 9.5%.
The OC 100 had several outstanding performances by tech companies: software maker Starbase Corp., up 107%; memory products maker Dense-Pac Microsystems Inc., up 77%; and data storage products maker Procom Technology Inc., up 81%.
The dogs of June on the OC 100 included: MindArrow Systems Inc., down 33%; eMachines Inc., down 34%; and Emergent Information Technologies Inc., down 22%.
Five of the county’s eight biggest tech stocks by market cap followed similar patterns,a huge rise to the middle of March followed by a steeper decline, bottoming out in late April, then a re-grouping trend in May, followed by a move upward in June.
Emulex reached the lofty heights of 225 on March 27, only to plummet to a low of 35 by April 17. It has since rebounded 65 as of late last week. Rival QLogic, which also makes electronics to speed data among computers and networks, also did well for the month after getting hammered in April.
“People are coming back to the network storage group,” Tolander said.
Broadcom, whose chips allow for data to flow faster over networks, cable modems and other devices, got a boost from index fund buying before its shares joined the S & P; 500 last week. On Thursday alone, Broadcom was up 9% to 204 3/4. Meanwhile, its chip-making rival Conexant was moving upward for most of the month, but its stock fell for most of last week after it said it was buying privately held high-speed network chip maker HotRail Inc. for about $394 million in stock.
To be sure, though, OC’s hottest stock is Newport Corp., which bulled its way through June like it was a walk in the park. Its year-to-date gain: 581%.
Another notable is PairGain Technologies Inc., which increased 13% in June in advance of its acquisition by ADC Telecommunications Inc., which was completed Thursday. PairGain is no longer publicly traded.
Heading in the opposite direction was Powerwave Technologies Inc., which didn’t decline much in the spring meltdown, but showed a drop of 23% for June. Powerwave has been hurt by concerns its sales in South Korea might be lower than expected.
While the tech stocks posted a notably good June, a couple of other stocks also posted nice gains: Allergan Inc. was up 12%, and Fidelity National Financial Inc. rose 16%.
ICN Pharmaceuticals Inc. didn’t fare so well. Its shares shot up early in the month on speculation about plans for a split-up of the company’s operations, only to fall 20% by month’s end after the plan was announced and roundly criticized by analysts. n
