January 8, 2001
MAINE STOCK TRENDS
The Softening Economy Hits Home at Fairchild
Copyright © 2001 Blethen Maine Newspapers Inc.
 Updated prices for 24 Maine stocks are listed on our stocks page. | |
| Recently in MAINE STOCK TRENDS: | |
|
Maine stocks do well (relatively speaking) in 2000 (January 1, 2001)
| |
| Maine stocks in this column: | |
|
|
Shareholders of Fairchild Semiconductor (FCS-$15) ended the first week of the new year with one of those dreaded press releases from management last week. Their company issued a revenue warning after Friday's market close. Fourth quarter revenues are now expected to fall short of analysts' expectations by 4.5 to 4.9 percent. On top of that disappointing news, the company announced that first quarter 2001 revenues would likely fall 5-8 percent from those of fourth quarter, 2000. The Street had been looking for a first quarter revenue increase of 3 percent. Company CEO Kirk Pond characterized the current period as a temporary blip caused by customers clearing inventories. Fairchild's revenue growth should increase in the second half of this year, Pond said.
Margin-boosting new products provided about one-third of Fairchild's sales, according to CFO Joe Martin. For the week, Fairchild's stock gained 4 percent, but that was ahead of the news. If the stock can hold above its December lows ($11.50) in the face of last week's bad news, it should be bullish. If not, we may have to look to groundhog day to find out what's in store for the rest of the winter.
Fairchild is example of how fast things are falling off in the economy. In October, the company announced that "based on our current backlog we expect to see sequential revenue and margin growth in the fourth quarter as well." Then, as recently as Nov. 29, the company announced that its fourth quarter was "progressing in line with previous projections and expects to book and ship enough additional orders to achieve its $490 million sales target." As Wall Street Week's Louis Rukeyser proclaimed, "the longest line in America this week appeared to be of companies waiting to announce that their earnings, too, would be a disappointment in this rapidly softening economy."
Speaking of PBS, Investment Timing Consultant's Frank Cochran appeared Friday on PBS's Nightly Business Report to give a boost to UNUMProvident (UNM-$24.06). Among Cochran's recommendations was UNUMProvident which he claims "could potentially double from here over the next 18 months." UNUMProvident's stock started the new year by losing nearly 10.5 percent of its value, hitting its lowest price since September, when it was recovering from disappointing second quarter results. Since October, the consensus of 2001 earnings estimates has fallen from $2.71 down to $2.65 per share.
There was a little good news in local stocks last week. The top performing stock for the first week of 2001 was Saco's Intelligent Controls (ITC-$1.31). The stock moved up 31.25 percent as the New Year began. Intelligent Controls is one of the most thinly traded of all Maine's companies - it doesn't take much to move the stock in either direction. During 2000, the stock had only five days when its trading volume exceeded 10,000 shares in a single day. One of those was Dec. 29, when it appeared that tax loss selling was at work. Another low-priced stock, Portland's ImmuCell (ICCC-$2.00), was up 28 percent for the week. There was no news on either company. The stocks appeared to be rebounding from year-end tax loss selling pressure last month. The stocks of both companies were double-digit losers last year.
There was lots of snow in the mountains as well as mostly favorable weather over the holidays. That was welcome news for American Skiing (SKI-$1.56). The company announced skier visits increased 16 percent during Christmas week and revenue increased 24 percent. That gave the company the highest revenue week in its history. American Skiing Company's second fiscal quarter of 2001 closes on January 28, 2001. With good news for the holidays and good news from the Federal Reserve, which lowered interest rates, American Skiing's stock moved up 8.7 percent for the week.
Good news from the Fed didn't do much to help the stock of Banknorth Group (BKNG-$18.69). The bank holding company began the new year with a loss of 6.27 percent. Fourth quarter 2000 results should be out around the 23rd of this month.
If you got shares of Portland's I-Many (IMNY-$9.94) in your Christmas stocking and wanted to exchange them for a lump of coal or something useful this winter, you could be forgiven. The stock fell 20.1 percent last week, making it as the worst performing local stock of the new year. But don't rush to the exchange line yet. There's growing consensus that things will improve for the company. The I/B/E/S consensus estimate for 2001 now calls for earnings of $.02 per share. Compare that with predictions made a month ago for a loss of $.03 per share in the new year, or predictions made in November calling for a 2001 loss of $.31 per share. Despite that gloomy outlook, the stock hit its all time high of $27.38 at the same time. Meanwhile, short sellers are still climbing onto the I-Many volatility train. Short interest (the number of shares sold short) for the latest period in December advanced to 369,879 shares from 215,660 shares in November.
There's still time to send in your entry for the top and worst performing local stocks of 2001. Send us your top two picks for the year ahead. Let us know what you feel the worst performing local stock will be also. The companies all have to be headquartered in Maine to be eligible. If a company isn't headquartered in Maine, but has substantial operations here, such as one of the paper companies, you can add that as an additional pick if you wish. Send your entries to info@MaineSec.com
Brad McCurtain is president of Maine Securities Corporation. Maine Securities Corporation is an investment firm specializing in Maine's securities. From time to time, the corporation, its employees, and its clients may buy, hold, and/or sell positions in companies mentioned herein. As a regulated securities broker/dealer, the company and its employees are required to abide by all securities regulations at all times when communicating with the public. Brad McCurtain may be reached at info@MaineSec.com. Web site: http://www.MaineSec.com