Big Improvements Were Scattered in Quiet 2nd Quarter

With the stock market dead in the water last quarter, Washington investors had to hunt far and wide for good investments.

They found them in some unlikely places: Appalachian coal mines, a new city being created in Charles County, a company in Columbia forced into bankruptcy by asbestos lawsuits and a Fairfax County company most people have never heard of -- which suits the company just fine.

The second quarter was a stock-picker's market. Local lodging stocks outpaced the pack and defense contractors had a decent quarter, but no other industry gave investors much of a trend to trade on.

The Washington Post Bloomberg regional stock index of companies based in the District, Maryland and Virginia gained just 0.23 percent, even less than the anemic 0.75 percent increase in the Dow Jones industrial average.

Takeovers produced a trio of top-20 performances. One of the 10 best-performing stocks, Group 1 Software of Lanham, is about to be sold. Another top 10 stock, Sensytech Inc. of Newington, is making a major acquisition. And Riggs National Corp. of Washington is looking to be acquired.

The quarter's top performer was Sutron Corp., a small Sterling company whose shares broke out of penny-stock territory for the first time, ending the quarter up 137 percent at $3.20 a share. Sutron makes equipment for monitoring water quality remotely, automatically checking samples and relaying the results via telephone, Internet or even satellite.

Sutron picked up some relatively large contracts during the quarter, produced a 65-percent increase in revenue to $3.7 million and swung from a loss of $283,189 to a profit of $365,279.

W.R. Grace & Co. of Columbia was the quarter's second-best performing stock. It gained 99 percent to $6.20 a share as investors bet Congress would eventually pass legislation to create a nationwide asbestos compensation fund to pay victims' medical and other claims and limit the liability of Grace and other companies. The legislative deal is not quite done, but recent developments have been encouraging enough to lift all the stocks of companies facing asbestos lawsuits.

Grace is a real rarity -- a company caught up in bankruptcy whose stock has proved a winner for gutsy speculators. Long out of businesses having anything to do with asbestos, Grace now is into specialty chemicals, building materials and packaging.

Sensytech is a stealth stock, a defense contractor catering to the Pentagon and intelligence agencies and that describes its business with an acronym recognized by few people without a security clearance. They're in the C4ISR business, which stands for Command, Control, Communications, Computers ("the 4 C's") plus Intelligence, Surveillance and Reconnaissance.