How ’bout that OC Billion-Dollar Club?
While many are talking about the fabulous Nasdaq, which recently topped 3,000 and is up 48.4% for the year, the Billion-Dollar Club has done even better–it’s up a champagne-popping 58.4% year-to-date.
That’s even more impressive when one considers that the Billion-Dollar Club’s peer group isn’t the technology-laden Nasdaq, but rather the S & P; 500, which had a sluggish third quarter but recently has recouped to a more respectable 10.9% year-to-date increase. The Dow Jones is up 17.5% this year.
Five tech companies are driving this 13-member Billion-Dollar Club index, which tracks Orange County’s list of companies with a market cap over $1 billion. These fab five, in one way or another, are involved in communications, the darling of the Street.
Leading the charge is Costa Mesa-based Emulex Corp., which is up 747%, as of last Thursday. Emulex, whose president and CEO is Paul F. Folino, makes fibre-channel products that enhance access to and storage of electronic data and applications. It now has a $3.1 billion market cap, about twice what it was in September.
The already-hot semiconductor industry is becoming lava hot. Newport Beach-based Conexant Systems Inc., the Rockwell spinoff that’s headed by Chairman and CEO Dwight Decker, is up nearly 488% for the year. Conexant supplies analog PC and fax modem chip sets and semiconductor products for communication applications.
Conexant’s semi-rival, Irvine-based Broadcom Corp., had a golden year last year, when it had its IPO and increased 379% in value. Co-founders Henry Nicholas and Henry Samueli have seen a smaller percentage increase this year: 149.5%.
Another tech company, QLogic Corp., is also up–248%. QLogic designs and supplies semiconductor and other products, which connect computer systems and their attached data storage peripherals. Its market cap is $4.7 billion, compared with $1.180 billion in March.
And Newport Beach-based Quest Software Inc., which had its IPO in August, has seen its stock increase 55% and now boasts a market cap of $2.53 billion. Quest makes software that enhances the performance of a company’s e-commerce system and enables faster delivery of information.
Two non-tech companies also have enjoyed hefty increases. Allergan Inc., Irvine, has seen its shares increase 73%. Pimco Advisors Holdings LP, which is being bought by Allianz AG of Germany, has seen its stock increase 27%.
The worst performer in the Billion-Dollar Club has been Orange-based Bergen Brunswig Corp., whose stock has fallen 77.9% to date this year. The company has been beset by problems ranging from price pressures to problematic acquisitions. Two weeks ago, President and CEO Donald R. Roden was “terminated.”
A notable exception to the high-tech surge is Ingram Micro, Santa Ana, which is down 65% for the year. It’s been hurt by a downward spiral of prices for the computer products it ships. Its razor-thin margins are becoming laser-thin. It’s also in the midst of shaking up its management. Jerre Stead has said he will relinquish his role as CEO, but continue as chairman. In October, Jeffrey Rodek resigned as president and COO.
Meanwhile, the Cruttenden Roth OC 100 index–which tracks firms in the $25 million-to-$1 billion market cap range–has fallen 5.6% year-to-date, a reflection of steep drop in values among some of Orange County’s more famous companies.
For example, Anaheim-based CKE Restaurants, which owns Carl’s Jr. and Hardee’s and is chaired by William Foley, has seen a steady year-long decline that has left the stock 76% off its beginning-of-the-year price. Its market cap is now $104 million, a far cry from the $1.6 billion it was valued at only 18 months ago.
Foley’s other flagship, Fidelity National Financial of Irvine, is also in a slump, having fallen 48% during the year. It is perhaps little comfort that the slump is industry-wide, as First American Financial Corp. of Santa Ana also has fallen, by 53.2%.
Another big decline has been experienced by Wet Seal Inc. the Foothill Ranch-based operator of 522 retail clothing stores. Its weak sales are being blamed on mistakes by company officials in predicting hot trends among its core market, teenage girls. The stock has fallen 54% to date this year.
Irvine-based Western Digital Corp. continues to rack up losses–eight quarters in a row–and that’s reflected in its 81% decline this year. Its market cap is about $392 million, compared with $1.46 billion 18 months ago.
But not all is lost for the OC 100.
Anaheim-based MTI Technology Corp has seen its stock increase 369%. Its market cap is now $772 million, compared to a $160 million market cap in March. The company makes data storage systems and is benefiting from the need of large companies to back up their data.
Irvine-based Powerwave Technologies Inc. is up 291% for the year. Its market cap is now $1.148 billion, up from $490 million in March.
The way these two are going, they too might join the Billion-Dollar Club when its membership is adjusted after the end of the quarter.
