Stocks surge, but Baltimore drops to 14th Money magazine's year-end ranking of 24 cities

Why Boston finished No. 1

Black & Decker stars, as does Mercantile, but Ryland lags

Investing

January 08, 1996|By Shirley Leung | Shirley Leung,SUN STAFF

Shareholders in a dozen area companies saw total returns averaging nearly 32 percent in 1995, but Baltimore still dropped four places in Money magazine's ranking of stock performances in 24 cities.

The reason, of course, is that stock prices surged in 1995, the year of the bull market that wouldn't stop. In fact, shares of companies headquartered in 23 of the 24 cities posted average gains of more than 20 percent.

Baltimore dropped from 10th to 14th on the Money list.

"I wouldn't read any doom and gloom into dropping a few notches," said Alex Hart, an analyst for Ferris, Baker Watts. "It's not that things are worsening here, it's how things got better in those other cities," he said.

Boston topped the Money list, leaping from No. 14 to No. 1. Paced by soaring prices for shares of local hi-tech companies and financial firms, Beantown stocks posted a total return of 51.8 percent. Los Angeles and Washington, D.C., were next at No. 2 and No. 3.

"In 1995, it was the year for information and telecommunications," said Michael Metz, chief investment analyst for Oppenheimer & Co.

"They showed the most earnings momentum and caught the eye of investors," he said. The rankings are based on the average price of 12 representative stocks in each of the 24 cities from the beginning to the end of the year, with dividends reinvested.

Shareholders of Black & Decker Corp. saw the largest total return locally, at 50.28 percent. The Towson-based power tool and appliance maker had a good year with third-quarter earnings jumping 48.5 percent. For the first nine months of 1995, earnings rose by 55.5 percent, and that helped propel the stock from a low of 24 in January 1995 to a year-end 35 1/4 .

Mercantile Bankshares Corp. came in second, with an average return of 47.02 percent. Mercantile, the largest independent banking company based in Maryland, had such a strong year that its board last month authorized the company to buy up to 2 million shares of its common stock as a way to spend excess cash.

Alex. Brown Inc. finished third, with an average return of 41.43 percent. The Baltimore-based investment firm saw one of its best years ever. Third-quarter revenue jumped by 45 percent compared with the same period last year and profit rose by 73 percent.

Beleaguered by growing competition, Ryland Group Inc. posted the only loss in the Baltimore list. The Columbia-based firm and dTC the nation's third-largest homebuilder had a return of minus 2.87 percent. For the first three quarters of 1995, Ryland reported net income of $21.1 million, $1.24 per share, a 5 percentage point decline from a year ago.

The other Baltimore firms in the Money magazine survey, and the total return of their stock for 1995:

* Life Technologies Inc., 40.94 percent;

* PHH Corp., 38.67 percent;

* Baltimore Gas and Electric Co., 36.72 percent;

* McCormick and Co. Inc., 35.21 percent;

* Legg Mason Inc., 31.60 percent;

* Manor Care Inc., 28.21 percent;

* USF&G Corp., 25.37 percent;

* The Rouse Co., 10.07 percent.

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