Despite Market Decline, DM Stocks Hold Up

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Though September was a rough month for most of the companies in the DM News Portfolio, strong gains by several companies enabled the index to rise 6.24 percent.


Of the 100 listed companies, 89 saw a decline in September compared with August, nine shares rose and two remained unchanged for the month.


One sector that experienced increased business in the aftermath of the Sept. 11 terrorist attacks was the videoconferencing and teleconferencing industry. Analysts noted that with many people reluctant to fly, the sector saw increased interest. Consequently, videoconferencing company stocks are enjoying an upswing. Though information technology stock prices had been declining during the past few months, videoconferencing stocks have been among the best performers on Wall Street since the market reopened on Sept. 17, analysts said.


One company that has seen increased investor interest is Gentner Communications Corp., Salt Lake City, a provider of broadcast and communications products and services. Gentner reported strong fourth quarter earnings in August and that momentum carried it through September. The company's shares increased 48.4 percent through Sept. 24, according to Bloomberg.


Sales of Gentner's conferencing services rose 78 percent for the fourth quarter, to $3.5 million from $2 million a year ago, and 98 percent for the year, to $11.7 million from $5.9 million in 2000.


"The growth in service sales has been tremendous, and we see significant opportunity for additional growth in this area," said Frances Flood, Gentner's president/CEO. "Strategic investments in our service operations during the year, including the expansion of our call center and the hiring of additional personnel, should provide the necessary infrastructure to effectively manage projected growth."


Analysts noted that things would only get better for Gentner and others in the sector.


"End-users indicated that they had plans to increase their usage of audio and video conferencing solutions over time," said Nigel Gonsalves, an analyst at H.C. Wainwright & Co. Inc. "We believe that this trend will be catapulted due to cost benefits, operational efficiencies and safety issues."


One of the biggest losers in September was TeleSpectrum Worldwide Inc., a King of Prussia, PA.-based provider of customer relationship management services. The company's shares fell 69.6 percent through Sept. 24, according to Bloomberg.


In August, TeleSpectrum Worldwide reported a second quarter net loss of $24.7 million, or 78 cents per share, compared to a net loss of $4 million, or 12 cents per share in the same period a year earlier. The company reported second quarter revenue of $57.5 million, down from $79.2 million in 2000.


"[T]he current economic climate, our business fundamentals and factors specific to the teleservices industry continue to present challenges for TeleSpectrum, as evidenced by the revenue decline in the second quarter," said J. Peter Pierce, chairman/CEO.


Home shopping service and Internet retailer Shop At Home Inc. saw its shares tumble 42.2 percent in September, largely due to lower fiscal 2001 revenue. The company last month reported year-end net revenue of $177.6 million, down from $201.5 million a year earlier. Shop At Home's net loss for fiscal 2001 was $10.2 million, or 51 cents per share, compared with a loss of $13.5 million, or 44 cents per share in 2000.
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