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Some Troubled Firms Turned Into Top Performers in 2004

Washington investors made money on the stocks of all but three of the 20 largest companies in the region. The losers, besides US Airways, were Gannett Co. , down 7.2 percent, and Fannie Mae, down 2.3 percent.

The biggest winner among the big companies was NVR Inc., the region's largest home builder, the stock of which gained 65 percent thanks to the best housing market in history and aggressive stock buybacks.

_____Graphic_____
2004 Scorecard Public companies in Virginia, the District and Maryland, ranked by stock price total return in 2004.
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Dow Over 12 Months
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Measured by year-over-year increase in their market capitalization, the stocks that made the most money for investors were SLM Corp., or Sallie Mae, the recently privatized student loan firm whose stock value grew by $6.8 billion, and Capital One Financial Corp., the credit card company, up $5.3 billion in market value.

Boosting their stock market value by more than $3 billion were Black & Decker Corp., Harman International Industries Inc. and Marriott International Inc. Host Marriott Corp., the affiliate company that owns much of Marriott's hotel real estate, increased its market value by $1.6 billion. Between them, the Marriott companies made almost $5 billion for their shareholders last year as the lodging market regained its health.

Three out of four stocks in The Washington Post-Bloomberg regional index were up for the year. Details are shown in the accompanying chart, which also includes some companies that were too small to qualify for the index at the beginning of the year.

A minimum stock price of $5 is required for inclusion in the index, which kept out Sutron Corp., a Sterling environmental monitoring company, the stock of which started the year at about 75 cents a share and ended up at $9 as large new contracts were signed -- an increase of more than 1,000 percent.

Another astronomical gainer was First Avenue Networks Inc., the Charlottesville firm that acquired what was left of Teligent Inc., a wireless network company that went under during the telecom crash. Trading at less than $3 a share at the beginning of the year, First Avenue sold more stock for $7.25 in December and by year-end was up to $14 a share.

The Post-Bloomberg regional index was up 24.8 percent for the year, far more than the familiar measures of the entire market.

The Dow Jones industrial average gained 3.2 percent last year. The Standard & Poor's 500 stock index was up 9 percent and the Nasdaq Stock Market composite index. climbed 8.6 percent.

The local index, however, isn't statistically comparable to the Dow and S&P, which are weighted to take into account the total market value of each company. Using that approach doesn't work as well for the Washington region's diverse assortment of small companies and a growing number of larger ones. In an index weighted by stock-market value, the smaller firms would be overwhelmed by giants that include Lockheed Martin Corp. and Fannie Mae.

The Post-Bloomberg index is based on a portfolio of one share of each of the public companies based in the District, Maryland and Virginia. Over the years, it too has developed distortions because a handful of local stocks trade at triple-digit prices -- Harman at $127 a share, NVR at $769 a share and The Washington Post Co. at $983 a share. All three stocks made big moves last year, with Harman up more than $50 a share, The Post Co. stock up nearly $200 a share and NVR up nearly $300 a share. Those three moved the local index a lot more than any measures of the overall market. Still, by most measures, it was not a bad year at all for local stocks.


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