NEW YORK -- It's a sad fact of life that the collapsing share prices being chalked up in the New York financial markets reflect declines in expected profits and wealth elsewhere. Maryland, along with the surrounding mid-Atlantic region, hasn't been spared.
Indeed, the 12 percent decline since the beginning of the year in the Dow Jones industrial average, the most common gauge of market performance, appears positively benign compared with the actual devastation in share prices among Maryland and Virginia companies.
"It just seems there has been an absolute lack of interest in purchasing some of these stocks," said Bentley Offutt, head of Offutt Securities in Baltimore.
Out of the 109 issues on the daily Sun Stocks list, only nine appreciated during the first three quarters of this year. In most cases the appreciation was either a quirk of already depressed pricing (Clark Melvin Security, up from 1/8 to 3/8 ; Monarch Avalon, 1 3/8 to 1 1/2 ) or the result of a buyout coming on the heels of disappointing results (Webster Clothes, up from 2 1/4 to 5 7/8 and Mack Truck, up from 6 to 6 1/8 ).
Just a few companies scored real gains, and with only a few exceptions even those were slight. General Kinetics, a tiny ($18 million in sales) technology company in Rockville registered the largest gain, from 2 to 6 3/4 , on the strength of a significant turnaround, from a per-share loss of $1.80 in the fiscal year that ended in May 1989 to a per-share profit of $1.03 in the year ended this May.
A more modest winner whose prospects also dramatically changed is Survival Technology Inc. in Bethesda. Demand for its chemical-weapon-antidote system went from negligible to intense because of a few decisive comments by Saddam Hussein. Survival's shares are up from 7 3/8 to 8 1/4 . That's not much, but the twin impact of an ebbing Cold War and a tightening federal budget have flattened most defense contractors.
Other minor winners include Procter & Gamble, the Cincinnati-based company that owns locally based Noxell, the manufacturer of Cover Girl and Clarion cosmetics. It rose from 70 1/2 to 72 7/8 .
Cosmetics & Fragrance Concepts Inc., a Beltsville-based retailer, advanced from 5 3/4 to 5 7/8 . Other companies involved with cosmetics also have held up as the market, and the economy, have gone down.
In contrast, many of the largest and best-known companies with interests in the area have seen their share prices devastated. Many banking companies, including Chase Manhattan, MNC, Provident Bankshares and Signet, are down close to 70 percent.
But financial companies aren't the only ones to have been devastated. Companies involved in everything from steel to consumer products to supermarkets to chemicals to biotechnology to retail to hotels to homebuilding have seen their share prices collapse.
To cite just a few major names and prices, Bethlehem Steel fell 36 percent; Black & Decker, 52 percent; CSX, 28 percent; Giant Food, 25 percent; W. R. Grace, 37 percent; Hechinger (Class A), 46 percent; Marriott, 69 percent; Merry-Go-Round, 28 percent; Nova Pharmaceutical, 43 percent; Preston Trucking, 49 percent; Primerica (Commercial Credit), 30 percent; Rouse, 47 percent; and Ryland, 50 percent.
Whether the collapse suggests that bargains abound or that the outlook for these companies has died is unclear. But if any of those stocks were good investments in January -- or, for that matter, in July, when most were even higher -- they are certainly better bargains today.
"Certainly, there are some stocks here you would say can't go lower," said Mr. Offutt. "But one might have said that a month ago, and they did."
In the past, Mr. Offutt notes, banking stocks have remained depressed for as long as 20 years. Thus, an industry's collapse today brings no certainty of its revival tomorrow, or next week, or next year.
Similarly, Michael L. Mead, who follows local stocks for Legg Mason, said many stocks are reaching extremely attractive levels but may well need a catalyst before surging again -- some shift in circumstances that can be expected to drive profits higher in the future. In the meantime, they may suffer further because their current depressed prices will encourage end-of-year tax selling.
Still, some companies have stocks that appear particularly compelling either because their values are so unappreciated or their prospects so promising.
Mr. Mead cites United Dominion Realty Trust, a company based in Richmond, Va., that is tracked on The Sun's tote board and fits the general theme of the moment: It is in the region and has a share price that's down about 25 percent from its 12-month peak.
The selection is particularly notable because real estate may be the single most universally repudiated asset in the market today. Moreover, United Dominion is a real estate investment trust, or REIT, which to major bankers is short for the type of investment that spelled disaster in the early 1970s.