Despite market woes, handful of area firms posted solid '08 gains

Jan 03, 2009 (The Philadelphia Inquirer - McClatchy-Tribune Information Services via COMTEX) -- UVSP | Quote | Chart | News | PowerRating -- A fortunate handful of Philadelphia-area companies bucked the stock market's plunge in 2008 to post solid gains -- a result of increased sales, low-cost products and conservative investing.

While it was a miserable year for U.S. banks, shares of Univest Corp. of Pennsylvania soared 52 percent, the third-best gain among local companies. The Souderton bank has 33 branches in Bucks and Montgomery Counties.

"We haven't experienced a lot of the losses that the bigger players have," Jeffrey M. Schweitzer, chief financial officer of Univest, said.

His explanation: Univest did not take too much risk with its investment portfolio and stuck to taking local deposits and making local loans instead of venturing far afield to unfamiliar parts of the country.

The company even spent nearly $10 million last week to buy two small businesses, and it declined last fall to apply for money from the federal government's $700 billion financial rescue.

"We didn't need it to lend," Schweitzer said.

The top two local stocks were in pharmaceuticals.

ViroPharma Inc., an Exton pharmaceutical manufacturer, was the leader. Its stock gained 64 percent on strong sales of a treatment for a bacterial infection that has been showing up more frequently in U.S. hospitals.

Shares in Lannett Co. Inc., a generic-drug maker in Philadelphia, climbed 62 percent as the company added new products and consumers sought low-cost drugs in a stumbling economy.

Such winners were rare last year among local stocks that started the year trading for at least $3 each. Only 14, or 7 percent, of the companies in the 200-member Inquirer/Bloomberg index of local stocks ended the year higher than they started it.

The rest declined along with consumer spending and the job, housing and credit markets. The index fell 31.2 percent, its worst annual drop since its inception in 1994.

Shares of companies based in the Philadelphia region lost $120 billion in stock-market value.

Still, the local market performance was slightly stronger than that of the Standard & Poor's 500 index. Just 5 percent, or 25, of its members were in the black for the year.

Overall, the S&P 500 fell 38.5 percent and lost $4.9 trillion in market value last year, nearly $1 trillion of it in the financial sector.

Locally, Wilmington's DuPont Co. was the biggest loser, shedding $16.81 billion in value, as the global recession cast a cloud over the diverse chemical company's prospects.

The biggest losers on a percentage basis were a motley group:

Penn-Treaty American Corp., a long-term insurance company in Allentown with long-term financial troubles, had to stop issuing new policies as it failed to meet state regulatory requirements. Its stock fell 99 percent last year.

Shares of a Philadelphia plastic-bottle maker, Constar International Inc., fell 98 percent. The company continued to post losses and ended the year in bankruptcy.

Entercom Communications Inc. of Bala Cynwyd, which has 110 radio stations in 23 markets, had a net loss of $87 million in the first nine months of the year and fell 91 percent, a result of a slump in advertising and a writedown in the value of some stations.

Retailer A.C. Moore Arts & Crafts Inc. of Berlin tumbled 90 percent as Americans crimped on craft spending at the company's 136 locations from Maine to Florida.

Technitrol Inc., a Trevose manufacturer of electronic and electrical components, was hammered by the global economic downturn, falling 88 percent. For example, its sales to auto manufacturers slumped along with vehicle sales.

In addition to Univest, another bank, Republic First Bancorp Inc., was among the local winners, but its 27 percent gain was driven by Vernon Hill's June investment in the company.

But pharmaceuticals and small banks did not hog all the gains last year. An industrial company, OmegaFlex Inc., broke into the top five, logging a 31 percent gain for the year.

OmegaFlex, whose main factory is in Exton, makes flexible metal tubing for construction. The national economic downturn has hurt revenue but not the stock. "We've been able to run a lean, trim ship, even though sales have been down," said Tim Scanlon, a senior executive. Its profit rose 31 percent in the latest quarter even though sales fell 3.1 percent.

Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

Inquirer staff writer Mike Armstrong contributed to this article.

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