Highs, low of local stocks for 1st half of 2010

As I look back on the stock market in the first half of 2010, it’s hard to see any fireworks among local publicly held companies.

I reviewed changes in the Inquirer/Bloomberg Philadelphia Index, which is composed of the stocks of 189 area companies. The index was down 6.83 percent during the six months ended June 30, compared with the 7.57 percent decline in the Standard & Poor’s 500 Index.

Considering only companies whose stock prices traded above $3 as of Dec. 31, I came up with the following list of ooohs and aaaws:

The biggest gainer was Marlin Business Services Corp., an equipment-financing firm based in Mount Laurel. Its shares closed June 30 at $12.09, up 52 percent in the year’s first half.

Now why would the shares of a financial-services company so dependent on spending by business be doing so well? CEO Daniel Dyer told analysts on a May conference call that he expected 2010 to be a “much better year” than 2009.

The company has been rebuilding its sales force, and it posted a first-quarter profit of $1.2 million, or 10 cents per share, compared with a loss last year.

Other notable “value creators” included Vist Financial Corp., the Wyomissing-based bank holding company with branches in Philadelphia, Delaware, and Montgomery Counties. With $1.3 billion in assets, Vist didn’t make much news during the first half. Maybe no news was good news and that’s why its shares rose 46 percent, to $7.66 as of June 30.

There is a concrete reason why Pennsylvania Real Estate Investment Trust shares climbed 44 percent to finish the second quarter at $12.22. The Philadelphia owner of shopping malls refinanced a key portion of its debt in March.

The worst-performing local stock was Republic First Bancorp Inc., which swooned after the March 15 collapse of its long-delayed merger with Metro Bancorp Inc. of Harrisburg.

Republic First lost 54 percent of its value since the end of 2009, closing at $1.95 on June 30.

As often happens, one of the biggest swan dives of the first half was performed by one of the best local stocks of the previous year. Shares of Unisys Corp. fell 52 percent, to close as $18.49 on June 30. It had been the best performer of 2009, having risen 354 percent.

The big hit to Unisys’ stock price came in April, after the Blue Bell information-services company announced a first-quarter net loss of $11.6 million, or 27 cents per share. That was its first loss after three consecutive quarterly profits.

Also, quarterly revenue fell below $1 billion for the first time since Unisys was created from Burroughs Corp.’s acquisition of Sperry Corp. in 1986.

Another notable slip came from Orthovita Inc., a Malvern maker of biomaterials used in surgery. With profitability remaining elusive, its shares declined 42 percent, to $2.03.

Shares of Charming Shoppes Inc., the Bensalem-based owner of the Lane Bryant and Fashion Bug women’s apparel retail stores, also fell 42 percent, to close at $3.75 on June 30. The stock prices of many retailers have languished with consumer spending slow to rebound in the economic recovery.

Does this mean the same names will be among the biggest movers of the Inquirer/Bloomberg Philadelphia Index for the full year?

Probably not, and it’s useless to try to predict such trivia. The stock market has been volatile and investors nervous of late. Conditions can change quickly, and the resulting momentum can turn first-half losers into full-year winners, and vice versa.

In fact, the stock prices of these companies don’t yet reflect their second-quarter financial results, or, more importantly, updated outlooks for the rest of 2010. All that will be disclosed when the so-called earnings “season” kicks off with Pittsburgh-based Alcoa Inc. on July 12.