January was a remarkable month for Washington area stocks. The swiftly rising tides that carried the Dow Jones industrial average to a record of 1,292.62 also helped sweep local stocks to new heights. During the week of Jan. 21-Jan. 25 alone, a total of 42 area stocks hit new 52-week highs. In many cases, they were also the highest prices recorded in five years.
The upward movement on Wall Street, which began with the new year, continued through most of January. During the four weeks from Dec. 28 to Jan. 25, the 42 stocks listed in the adjacent table rose an average of 11.5 percent. Some of the stocks set new highs for several weeks in a row.
Companies that appeared frequently on the new-high list included Hechinger's, whose B class stock saw a string of six consecutive weekly highs. U.S. Air Group and United Virginia Bankshares each counted four straight weeks at new highs. Area banks, continuing to profit from falling interest rates, accounted for 12 of the 42 stocks on the new-highs list.
While the rising tide may not have raised every local stock -- a few dropped -- it did boost a variety of companies. The four-week list contains some of the area's most prestigious names: Marriott (up 10.2 percent); Martin Marietta (up 8.5 percent); Riggs National Bank (up 5.2 percent) and Washington Gas (up 3.4 percent). It also includes some smaller players: General Physics (up 27.6 percent), Scope (up 34.6 percent) and Washington Homes (up 27 percent.)
Companies whose stock has been lagging recently also moved up decisively. Notable were MCI (up 38.3 percent), BDM International (up 29 percent); Crown Books (up 45.2 percent); Trak Auto (up 43.9 percent), and Evaluation Research (up 25.6 percent).
Taken together, the 42 area stocks setting new highs between Jan. 21 and Jan. 25 represented nearly a quarter of the 175 stocks listed in the Washington Business stock tables on the following pages -- testimony not only to the power of a rising stock market, but also to the high level of investor interest in Washington-area issues.
Hechinger's six-week streak of new highs began in mid-December, when the class B stock was trading in the $19-to-$20 range. The class B stock moved up steadily, going as high as $26, until it closed Friday at $24.25 a share, slightly off its rapid pace of the weeks before. W. Clark McClelland, Hechinger's vice president for finance, attributed the rise to several factors, including sales up 29 percent and earnings up 30 percent for the third-quarter ended Oct. 31. Retail stocks, he said, are generally in favor these days and Wall Street regards the home-center business as "hot."
In its recent dividend announcement, Hechinger reminded stockholders that they could trade B class shares for A class shares on a share-for-share basis. The A class shares pay 16 cents a year in dividends, the B shares pay only 10 cents. But the B shares offer 10 votes per share, while the class A stock allows only one vote per share. Interestingly, in the 15 months since Hechinger adopted the two classes, stockholders holding 3.6 million shares have converted to the A class, trading higher dividends for fewer votes.
As those high-volume days rolled through the stock exchanges during January, you could practically hear the cheers from brokerage offices in the Washington area. One downtown manager called January business "terrific" and said it was up 20 percent over previous months -- rivaling even the bull market of 1982. Most of his colleagues in other firms agreed with his estimate. One of the best features of a rising market, they noted, is that it creates a buying psychology, that makes it easier for brokers to sell investments other than stocks.
The B. F. Saul Real Estate Investment Trust has offered to repurchase company stock held by shareholders with 99 shares or less for $18 a share. On Jan. 24, the day before the offer was made, the stock closed at $16.875, the same price it closed at on Friday. The deadline is Feb. 28.
B. F. Saul Trust said it wants to reduce the number of small accounts to trim administrative costs. The firm has about 1,000 shareholders of record who hold about 40,000 shares in odd lots. Much of the stock was obtained in the 1950s by shareholders who bought bonds in Giant Food Properties and obtained warrants good for Giant Properties stock. When Giant Food Properties were acquired by B. F. Saul in 1972, Giant Properties investors were given B. F. Saul shares in exchange.
Because of a continuing program of stock repurchases, reports have circulated that B. Francis Saul II is planning to take the company private. Company officials denied the rumors at last week's annual meeting, saying they were buying because they think their stock is undervalued.
Paine Webber has begun following U.S. Design Corp. of Lanham, a 6-year-old firm that analyst John C. Ball says is developing a solution to a performance bottleneck that prevents computers from operating at top speed. U.S. Design is trying to match computers capable of executing millions of instructions per second with their electro-mechanical hard disk subsystems whose operating performance is measured only in thousandths of a second.
Ball says he rates U.S. Design "neutral," even though he expects fiscal 1985 and 1986 sales to rise to $14.5 and $36 million, respectively. His reasons: First, there is an unfavorable market for small capitalization technology companies, such as U.S. Design, and second, significant profits are not likely to be attained until the latter half of fiscal 1985.