February 19, 2001
MAINE STOCK TRENDS
Another investment company buys a stake in a Maine business
Copyright © 2001 Blethen Maine Newspapers Inc.
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Fidelity acquires 11 percent stake in Fairchild Semiconductor (February 12, 2001)
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Capital Research and Management is the latest money management firm to buy significant portions of a Maine company. Last week the investment adviser to The American Funds stated in a 13g report that two of its mutual funds now hold 12.3 percent of all of the outstanding stock of Westbrook's IDEXX Laboratories (IDXX-$23.69). The filing was submitted on behalf of two of Capital's funds, Growth Fund of America and Small Cap World Fund, which control 5.1 and 6.6 percent of the company's outstanding shares, respectively. The remainder of the shares (.6 percent) are held in accounts that were not mentioned in the report.
Adding to the intrigue, Boston's Massachusetts Financial Services (MFS) also filed a 13 G/A report last week with the S.E.C. and which pertained to IDEXX. MFS, a large investment advisory firm whose clients include the MFS mutual funds, stated that it holds in client accounts 7.2 percent of the outstanding shares of IDEXX.
The previous week, Boston's FMR (Fidelity), another large investment management firm, filed a statement with the S.E.C. indicating that it also controls a meaningful percentage of the outstanding shares of another large Maine company, Fairchild Semiconductor (FCS-$16.04). Both Fidelity and Capital Research stated that their reasons for holding are for investment purposes and not to seek control of the companies.
The filing of fourth quarter results by Maine companies reached a peak last week. The biggest of the local companies to report last week was UnumProvident (UNM-$25.70). The world's leading disability insurance company released fourth quarter and year-end results showing earnings of $0.61 per share for the quarter and $2.36 for the year. Both numbers came in exactly as predicted by analysts, but not everybody was happy at the way in which the company met its estimates.
Beyond the fourth quarter earnings, there is concern that the insurer may still not have its arms around all of the problems in the disability portfolio.
After the quarterly release, Deutsche Banc Alex. Brown cut its 2001 earnings estimate from $2.65 to $2.55. For 2002, the brokerage firm forecasts earnings of $2.85 per share.
UnumProvident's stock fell 7.85 percent last week and is off about 15.5 percent from its high reached earlier this month.
In the northern part of the state, Maine Public Service Company (MAP-$24) reported fourth quarter and year end results of $1.42 and $3.34 per share. Those numbers represent gains of 24.6 percent and 24.7 percent respectively over comparable 1999 results. The stock was unchanged for the week. Maine Public's Energy Atlantic is the "standard offer" provider of electricity to all of Central Maine Power Company's customers.
Yet another local company that reported last week was Intelligent Controls (ITC-$1.50). The Saco manufacturer of software and electronic measurement systems for the petroleum and utility industry announced earnings of $0.04 per share for the quarter and $0.09 per share for full year. That represented a decline of 43.75 percent for the year. The company lost money in the fourth quarter of 1999. Revenue declined by 23 percent for the year. Fourth quarter sales were even with sales from the same period in 1999.
The company announced that its business increased during the second half of 2000. It also said that it won several long-term contracts, which it began to ship in late 2000. During the fourth quarter, the company debuted an Internet version of its fuel storage monitoring devices. Now the underground storage tank measuring gauges can be monitored from afar via pagers, laptop PCs and personal digital assistants (PDAs), according to the company.
Merrill Merchants Bancshares (MERB-$11), which has already reported fourth quarter results, announced that it would pay a 3 percent stock dividend to shareholders of record as of February 28. The Bangor bank holding company also announced that it would hold its annual meeting Thursday, April 19th in Bangor.
Among top performing local stocks last week, Portland's I-Many (IMNY-$21.94) led the pack with a one-week gain of 14.72 percent. The company announced that that Ocean Spray, Liz Claiborne and Daisy Brand all signed licensing agreements for its trade promotion and deduction management solutions.
Hopping back to Fairchild, the semiconductor's stock price dipped to as low as $15 last week, then promptly rallied to $18 before closing at $16.04. That was good enough for a gain of 4.9 percent for the week. CFO, Joe Martin, spoke at a technology conference in California and stated that the weakness in January's revenues is "a dip, not a trend". He expects that slow booking will continue at least through this month. But, Martin also reaffirmed that the company will continue to make acquisitions during the downturn and will not stop investing in R&D.
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