If bigger is better, then the proposed merger between two supermarket chains in the Tidewater area of Virginia -- Farm Fresh and Open Air Markets -- should greatly enhance the value of the stock of the combined company.

That is the view of analysts Eliot H. Benson, research director of Ferris & Co. in Washington, and Kenneth M. Gassman Jr. at Wheat, First Securities in Richmond.

Under the merger proposal, Farm Fresh would acquire Open Air Markets in a deal worth about $41 million. The agreement provides that 0.8 percent of a share of Farm Fresh stock would be issued for each share of Open Air Markets.

Farm Fresh will be the surviving corporation, although officials may adopt a new name for their stores in order to create a single identity, Gassman said.

Open Air, founded in 1939, now operates 17 Giant Open Air Markets, six LouSmith SuperMarkets and 47 convenience stores called Tinee Giant Food Stores. Farm Fresh, in business since 1957, has 34 stores, including its "super combination" stores, which are mini-shopping malls under one roof.

The merger, Gassman said, will create a company with estimated sales of $775 million to $800 million in calendar 1986 and profits of about $13 million, or about $1 a share. By 1987, the analysts forecast, the merged company will earn about $1.40 a share.

Profits at both grocery companies took a severe beating last year as the two rivals slugged it out with double-coupon battles and other competitive tactics. The analysts said that the merger not only will curtail the emotional competition but also will provide savings in advertising, distribution and administration.

The merger must be approved by stockholders in both companies and by federal regulators.

The merger, Benson noted, will give the company a 40 percent share of the market in the Tidewater area, which includes Norfolk, Virginia Beach, Newport News, Hampton, Portsmouth, Chesapeake and Suffolk.

Farm Fresh currently has a 24.2 percent share and Open Air Markets a 15.5 percent share, Benson said. The figures are from Food World, an industry publication.

With a 40 percent market share, Benson said, the merged company would dominate the Tidewater-area grocery business. He noted that in the Washington area, Giant Food holds a 43 percent market share, although its closest competitor, Safeway, has a 33 percent share of the business.

In a market share sense, Benson said, this makes the Farm Fresh position stronger than that of Giant Food. In Tidewater, Farm Fresh's closest competitor, A&P/Pantry Pride, holds only a 10.42 percent share.

If Farm Fresh profits in 1987 succeed in reaching a combined $1.40 a share, and the stock sells at the industry's price-earnings ratio of about 15, the stock would trade at about $21. Farm Fresh closed Friday at $14.75, Open Air Markets at $11.13.

Johnston, Lemon & Co., of Washington, known primarily as a regional brokerage house, is becoming a growing force in the lucrative mutual fund business.

The firm first got into the fund business 34 years ago when it opened the Washington Mutual Investors Fund. Helped by the avalanche of money pouring into mutual funds in the past two years, Washington Mutual has now climbed to $1.4 billion. The fund's investment adviser is the Capital Research and Management Co. of Los Angeles.

J&L opened its second fund, the Growth Fund of Washington, about a year ago. The Growth Fund, which concentrates on Washington-area stocks, now manages about $54 million. Its investment adviser is Geico Investment Services.

Now, J&L will start two new tax-exempt bond funds, one for Maryland and one for Virginia. Harry J. Lister is the president of all four J&L funds.

The Maryland and Virginia funds are expected to go on sale in August, unless Congress comes up with some surprises in its treatment of tax-exempt issues. Capital Research will be the investment adviser.

Dealing in Maryland and Virginia municipal issues will put J&L into competition with other companies that run Maryland and Virginia funds. They include Seligman (Maryland), Massachusetts Financial Services (Maryland and Virginia), Prudential-Bache (Maryland), Flagship Financial (Virginia) and Nuveen (Maryland and Virginia.)

The new J&L funds will carry a 4.75 percent sales charge, but there will be no redemption fee. The funds will contain a 0.25 percent distribution fee and a management fee that is yet to be determined.

A Maryland investor who buys shares in a Maryland tax-exempt fund will get a double tax exemption from both federal and state taxes. A Virginia investor gets the same kind of break when he buys into a Virginia tax-exempt fund. A District investor can buy into either fund and get both a federal and D.C. exemption, Lister said.

Legg Mason of Baltimore has boosted the firm's capital to almost $90 million with the help of a new offering last week of 7 percent convertible subordinated debentures. Legg Mason sold $30 million of the bonds and, with an extra allotment to the underwriters, the total may reach $34.5 million. The issue saw heavy demand from institutional investors.

The bond pays 7 percent interest while giving an investor the right to convert to Legg Mason stock at $34 a share. Legg Mason stock closed Friday at $27 a share.

The new financing, said Chairman Chip Mason, will give the firm about $45 million it can use for acquisitions. The firm, which has 39 offices, has made several acquisitions in the past and has been expanding in the mid-Atlantic region, including Delaware and Pennsylvania.

If the firm does make an acquisition, Mason said, it will be in the financial services sector.

Spectrum Digital Corp. of Herndon, Va., has raised $9 million on a new issue of 8 percent cumulative convertible exchangeable preference stock. The company, which manufactures sophisticated telecommunications equipment, sold 900,000 shares at $10 a share. The conversion price is $1.50 a share after Sept. 1, subject to adjustment. Spectrum Digital shares closed Friday at $1.63.

That raises to $22.5 million the amount of money the company has raised in private and public offerings since it was formed in 1984 by three former MCI executives.

The firm ran into trouble with the Securities and Exchange Commission last year over its method of raising of money through private placements. The SEC said that the placements should have been registered with it.

The new preferred shares carry an annual dividend of 80 cents a share, with the first quarterly payment due in October.

Lee Horton, Spectrum's chief financial officer, believes that Spectrum will have enough funds to pay the dividend, even though the company is still in the red. As of its six-month report on March 31, the firm lost $2.5 million, or 33 cents a share. That brought its total cumulative losses to $7.8 million.

Horton said he believes the firm will see profitability by the early part of 1987. The $9 million, Horton said, will be used, in part, to expand the staff, which now numbers 58 full-time employes. Horton looks for a 50 percent increase in employment this year.

Lexicon Corp. of Fort Lauderdale, Fla., is in the process of completing its takeover of Scope Inc. of Reston, Va. The two companies are heavily into electronics, computers and communications.

Lexicon, which holds 43 percent of Scope's stock, has offered Scope shareholders two shares of Lexicon for each share of Scope. The exchange is worth about $7.8 million. Lexicon closed Friday at $4.50, Scope at $8.75.

When the offer expires on July 18, Lexicon is expected to own 80 percent of the Scope shares, said Edward R. Olson, Scope's president. By October, he thought, Scope would become a fully owned subsidiary of Lexicon, and Scope stock no longer would trade.

The merged firm has about 210 employes in Reston, where it does its manufacturing. Its sales and engineering branches, with about 35 people, remain in Florida.