The first quarter of 2008 wasn?t kind to companies in The Examiner?s Top 10 list of publicly traded firms with a large local presence or investment, as nearly all posted declines in stock price or, at best, held steady.
The stock market?s weakness wasn?t limited just to financial institutions. Energy providers, retail-based companies and major local banks all took a downturn in a volatile market fueled by a residential real estate crisis and turbulence in the credit markets.
“I think for the first quarter, the overall look for the markets has been negative for a number of reasons,” said Tom Finney, managing director for wealth management at Wilmington Trust. “You?re still seeing significant write-downs from a number of financial companies. But you?re also seeing a generalslowing in the economy right now. The consumer has clearly slowed their ability to spend.”
Among The Examiner?s Top 10, only two companies have seen their stock prices rise: steel giant Arcelor Mittal, which has reached an agreement to sell the Sparrows Point steel mill, and Southwest Airlines, the largest carrier at Baltimore/Washington International Thurgood Marshall Airport.
Two major local firms, Provident Bankshares and Legg Mason, have been the hardest hit. Provident stock has lost nearly half its value since Jan. 2, closing Friday down 49.8 percent to $10.76. Legg Mason was hard hit by the collapse and purchase last month of investment firm Bear Stearns, which it had some ties to. Legg Mason stock closed Friday at $56.12, down 23.4 percent from $73.25 on Jan. 2.
“Legg … it was just a downright ugly quarter for them,” said Andrew Richards, stock analyst for Chicago-based Morningstar. “Their stock price took a significant hit when the news came out about Bear Stearns; some of their funds had pretty substantial stakes in Bear, but we tend to think that and the other bad news they?ve had has been pretty overstated. We still think Legg is a decent buy.”
Even some of the area?s brightest business stars have been dimmed in the recent tough market. Shares of Under Armour closed Friday down 18.8 percent to $35.48 from its Jan. 2 price of $43.69.
That company?s downturn may be tied to slower retail spending, said Robert Wasilewski, portfolio manager with Baltimore-Washington Financial Advisors.
“Under Armour is still from my perspective a fairly new company ? they?re going to be fairly volatile,” he said. “There might be some buyers out there that look at Under Armour as a discretionary consumer type of item ? people who say, ?Yeah I?d like to buy their item but I need to hold off.? ”
