The Salt Lake Tribune/Bloomberg Index, which measures the stock-price performance of Utah's 35 largest publicly held companies, was virtually unchanged for the first six months of this year - with some key strong-performing exceptions - while the Dow Jones industrial average clawed and scratched its way to a 4 percent first-half gain.
Large-cap stocks, which are represented by the 30 companies that make up the Dow Jones industrial average, gained ground relative to small-cap issues during the second quarter, said John Ferrell, manager of the Top Flight Long Short Fund based in Pleasant Grove.
"We also saw value stocks - companies with lower price/earnings ratios that often pay dividends - outpace growth stocks," or companies that are perceived to have high revenue growth potential, Ferrell said.
With only a few exceptions, The Tribune/Bloomberg Index is made up of small-cap companies, a term that refers to corporations with $1 billion or less in market capitalization - a figure calculated by multiplying the number of shares a company has outstanding by its stock price.
Despite investors' preferences for larger-cap issues, 22 of the 35 Utah companies tracked gained ground during the first half of 2006, with index leader Zevex International posting a 101 percent gain.
Zevex, a Salt Lake City-based medical products company, in April reported record net income and earnings per share of 36 cents for the first quarter of 2006. Its revenue for that period grew at a 77 percent pace.
David McNally, Zevex's chief executive, said the company saw increased demand for its products, from its feeding pumps to its kidney transport device and from its sensors used to monitor fluids in infusions systems to its surgical tools used in cataract removal procedures.
"All continued to perform well," he said.
Price volatility, though, was evident among both the companies that posted gains and those that saw their stock prices decline.
Nevada Chemicals, the Utah-based company that operates a plant in Nevada supplying sodium cyanide to the gold mining industry, was Utah's fifth-best performing stock, achieving a share-price gain of 28 percent. It started the year at $7 a share. The price climbed to $11.35 but later fell to the $8 range. It closed on Friday at $8.95 per share.
Myriad Genetics had Utah's sixth-best performing stock during the first half of 2006. Its shares were up 21 percent. They started the year at $20.80, rising to $28.47 on May 5, only to decline to the $23 range a few weeks later. They since have rebounded and closed Friday at $25.25.
Peter Meldrum, Myriad's president and chief executive, said the company's drug for the treatment of Alzheimer's is in late-stage clinical trials. Its drug for the treatment of metastatic brain tumors is in earlier-phase testing but approval could be achieved at about the same time as the Alzheimer's drug because there are a lack of treatments available for that condition.
"Also, securities analysts are projecting that our revenue from our predictive medical products will surpass $100 million during this fiscal year," Meldrum said.
Those products are used to assess patient risk of developing breast, ovarian, colon and skin cancer.
The first half of 2006 also was marked by some sharp declines in the share prices of once-high-flying Utah companies such as Novell Inc., down 25 percent; Nature's Sunshine Products, off 48 percent; and NPS Pharmaceuticals, which declined 58 percent.
Novell's shares fell in early June over concerns that software for the Linux operating system, which the company has been championing as a rival to Microsoft's Windows, was not growing fast enough. Shares of Nature's Sunshine declined when the maker of encapsulated herbs and vitamins was delisted from the Nasdaq market after it failed to file its required financial reports. And NPS Pharmaceuticals' shares dropped when it announced earlier this month that it would lay off more than half its employees and stop preparation work to introduce its osteoporosis drug, which was delayed by U.S. regulators.
steve@sltrib.com
Business Glance D9 v Utah Business D12
