Local Stocks Perform Well

And old investment saw is to invest locally because you know the managment of the companies headquartered in your backyard. And for Quad-state investors, the first half of 2005 paid dividends if they followed that maxim, but stayed away from the two companies that are tied to the booming home building market.

While the Dow Jones Industrial Average has declined by 3.4% so far this year, and the S&P 500 Index is down 0.9%, eight of the 12 Quad-state stocks posted gains of between 2.9% and 37.3% from January 2 to June 23.
Leading the way were shares of JLG Industries, the maker of aerial lifts which is benefitting from increased demand by equipment rental firms for lifts, which in turn are used by construction crews. Allegheny Energy, no longer headquartered in Hagerstown, but with a number of shareholders in the region, continued its finanical recovery, and the stock has responded with an almost 30% rise this year.
Shares of local community banks, after increasing modestly last year, continued that trend with First National Corp., parent of First Bank in Strasburg, leading the way with a 21.4% increase in the first six months of 2005.
On the minus side were the shares of cabinet maker American Woodmark Corporation and alternative decking company Trex Company, Inc., which declined by 28.7% and 52.1%, respectively, and now trade near their lows for the year. Both posted good gains in share price during 2004, but last month issued earnings warnings, which the stock market doesn't like.
On June 22, Trex announced that it expects net sales for the second quarter of 2005 to be in the range of $75 million to $80 million, compared to $83.4 million for the second quarter of 2004. The shares dropped $10 the next day, hitting a 52-week low.
Trex's net sales for the first six months of 2005 are expected to be in the range of $165 million to $170 million, which would represent an increase of 3% to-6% over the $159.7 million in net sales for the first six months of 2004. The company expects to record a net loss for the second quarter of 2005 in the range of $0.20 to $0.25 per share, compared to net income of $0.75 per share in the same quarter of 2004.
On June 6, American Woodmark said its fourth-quarter profit slipped 11% year-over-year to come in well below expectations, as higher raw-material costs squeezed the company's gross margin. The increased costs are expected to continue hurting results, prompting the company to forecast a further profit decline for the first quarter ending in July.

Heerwagen, Peter