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Some Troubled Firms Turned Into Top Performers in 2004

The size of the asbestos fund has yet to be determined -- $140 billion was the last number on the table -- as has the amount that each company will contribute. In its recent plan to emerge from Chapter 11 bankruptcy protection, Grace put its share of the fund at $1.6 billion, some of which would be covered by insurance.

That amount is roughly equivalent to the annual sales of Grace, which has long been out of the asbestos business and is now a profitable specialty-chemicals and building materials company that keeps a low profile and won't discuss its stock price.

_____Graphic_____
2004 Scorecard Public companies in Virginia, the District and Maryland, ranked by stock price total return in 2004.
_____In Today's Post_____
Duratek's Stock Price Soars After Carlyle Cashes In (The Washington Post, Jan 3, 2005)
Merger Led to Big Stock-Price Gains at Argon ST (The Washington Post, Jan 3, 2005)
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Investing
Washington Investing
The Color of Money
Cash Flow
The Week in Stocks
Personal Finance Special Report
_____Previous Columns_____
Tiny SEC Filing Gave a Big Hint To Vastera's Plans (The Washington Post, Jan 24, 2005)
Local REITs May Escape an Industry Downturn (The Washington Post, Jan 10, 2005)
Defense Giants Vulnerable to Slower Spending (The Washington Post, Dec 27, 2004)
Nextel Stock Pays Off for Legg Mason Fund (The Washington Post, Dec 20, 2004)
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Dow Over 12 Months
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S&P 500 Over 12 Months

As the prospect of asbestos legislation pushed Grace's stock higher, professionals who specialize in high-risk investments made about $650 million on that strategy last year.

The same kind of risk-takers lost about $500 million on the stock of US Airways after the Arlington-based airline took its second trip to bankruptcy court. Trading in the $6-to-$7 range after the company emerged from Chapter 11 protection, US Airways stock is down to about $1 a share. It has been delisted by the Nasdaq Stock Market and now trades on the over-the-counter bulletin board.

US Airways fought until the final day of trading for the title of Washington's worst-performing stock in 2004, before finally being edged out by the region's other airline, Flyi Inc., formerly known as Atlantic Coast Airlines.

Flyi, the parent of Independence Air, got the booby prize with an 82 percent decline for the year, a fraction of a percentage point worse than US Airways' loss.

This year's bankruptcy bet will be whether Flyi can avoid landing in Chapter 11 by abandoning its bid to become a low-cost carrier and returning to flying feeder routes for bigger airlines

The upside example of buying into bankrupt companies is NII Holdings, which was called Nextel International until it came out of Chapter 11 protection in October 2002. Since then, NII Holdings stock has climbed to $47.45 a share from $2.17 -- a 2,000 percent gain unmatched by any other local company over the same time.

NII Holdings, which provides phone service in Latin America, gained 91 percent last year. But NII made more money for investors than any of the stocks that scored bigger percentage gains because it's that much larger than the rest of this year's high-flyers. The company's market value nearly doubled, producing about $1.5 billion in gains for investors.

Big companies with lots of shares outstanding are almost always the biggest money-makers for investors. Last year was no exception, as the region's blue-chip stocks largely lived up to their names, scoring solid gains and increasing their stock market values by billions of dollars.


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