If you needed reminding that workers’ compensation insurance still is a big problem for businesses, consider this: Orange County’s best performing stock in 2006 was a company that helps manage claims.
Irvine-based CorVel Corp., which works with employers and insurers to keep a lid on workers’ compensation costs, saw its shares rise nearly 280% last year.
That made CorVel the biggest 2006 gainer among OC stocks valued at $50 million or more. The Business Journal looked at about 80 OC stocks that are tracked by Newport Beach-based Roth Capital Partners LLC and appear on our Market Watch section on pages 14 and 15.
CorVel, with a recent market value of nearly $700 million, offers software and services for managing workers’ compensation claims and reviewing bills. It’s also compiled a network of healthcare providers and offers services, including patient transportation and translation work.
Customers include Wal-Mart Stores Inc., UAL Corp.’s United Airlines, Domino’s Pizza Inc. and Kellogg Co.
Investors like CorVel’s profit growth from existing customers, rather than a push to land new ones.
In the third quarter, the company’s sales were flat from a year earlier at $67 million. But profits more than doubled to $4.8 million.
The company also has pushed other Wall Street buttons, buying back shares and doing a stock split in November.
The second best stock of 2006: Santa Ana-based memory products maker SimpleTech Inc.
SimpleTech’s shares closed the year up some 225% with a market value of about $600 million.
The growing use of flash memory to store data at businesses has boosted SimpleTech. The company long has made memory boards,circuit boards with memory chips on top for computers and networking gear. But growth is coming from flash memory, small cards full of memory chips that are used in digital cameras, music players and other gadgets.
Flash for consumer electronics is competitive and not as profitable as it used to be. So SimpleTech has gone after a more lucrative segment: businesses.
Companies are using flash to replace mechanical disk drives in networking switches and routers, military gear, medical devices and gambling machines.
Last month, SimpleTech upped its projected fourth-quarter earnings and revenue on stronger-than-expected sales.
The county’s third best stock of 2006: Newport Beach-based travel services company Ambassadors International Inc.
Its shares rose 205% last year with a recent market value of about $500 million.
The cruise, travel and event-management company benefited from a handful of acquisitions under its Majestic America Line.
In the third quarter, Ambassadors saw a big revenue jump to $57.6 million from $6.4 million a year earlier, thanks to $35 million in new cruise revenue.
The company’s net income was $7.6 million, versus $428,000 a year earlier.
Ambassadors, long run by the Ueberroth family, offers “incentive” cruises for companies looking to reward salespeople and other employees.
It does a lot of other things, including convention and trade show management, hotel reservations and other travel services for meetings.
Next year, analysts see Ambassadors doing $250 million in revenue, up 77% from 2006’s expected sales.
Smith Micro Software Inc., an Aliso Viejo maker of wireless software, was the fourth best performer in 2006.
The company saw its shares rise about 145% with a recent market value of $350 million.
Smith Micro, which saw its shares pull back some late in the year, makes software that helps laptop computers get wireless Web access from cellular providers.
The company’s business with Verizon Wireless, part of Verizon Communications Inc., has driven sales and profits.
Verizon makes up about three-fourths of Smith Micro’s sales.
The year’s biggest losers were in once-hot markets that since have cooled or delivered disappointing results.
United PanAm Financial Corp., a Newport Beach-based maker of auto loans to borrowers with imperfect credit, fell on poor results and a souring on the subprime finance sector.
In October, United PanAm’s shares fell 20% on weak third-quarter results. Profits fell 35% from a year earlier to $4.5 million, even though net interest income from loans rose 17% to $41 million.
For the year, United PanAm was off about 45% with a recent market value of $230 million.
The company saw its biggest investor, Los Angeles financier Guillermo “Bill” Bron, exit in December.
He once owned as much as 70% of United PanAm.
Santa Ana-based Powerwave Technologies Inc., a maker of gear for wireless networks, lost investors’ confidence after one too many downward revisions of its guidance. Its shares were off about 45% with a recent market value of $850 million.
Anaheim-based circuit board maker Multi-Fineline Electronix Inc. saw a big drop in profit this year and faces a slowdown in sales to key customer Motorola Inc., which makes up 75% of revenue.
Multi-Fineline, known as M-Flex, also is fighting to get out of a proposed $500 million acquisition of Singapore’s MFS Technology Ltd.
Both M-Flex and MFS are owned by Singapore-based WBL Corp.
M-Flex saw its shares fall 57% with a recent market value of $500 million.
Among companies with market values of $1 billion or more, the top performer was Nationwide Health Properties Inc., a Newport Beach-based owner of nursing homes and other healthcare facilities.
The company, recently valued at $2.5 billion, benefited from a series of deals that boosted profits. Its stock rose 38% last year.
Foothill Ranch-based Oakley Inc., a sunglasses maker, grew its business via several key acquisitions in 2006. Its shares rose 38% with a recent market value of $1.4 billion.
Shares of Aliso Viejo-based QLogic Corp. also saw healthy growth at 35% and recent market value of $3.5 billion. The maker of data storage networking circuit boards and devices consistently beat Wall Street’s estimates for sales and profits last year.
Irvine-based Standard Pacific Corp., a homebuilder, led the big-company decliners. Its stock fell 40% last year with a recent market value of $1.7 billion.
The company has seen falling new home orders and buyers who back out of deals because they can’t sell their existing homes.
Irvine-based chipmaker Microsemi Corp. also was among the year’s biggest losers. Its stock fell 30% in 2006 after downward guidance in profits. Its recent market value was $1.4 billion.
