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A Painful Year

Florida stocks provided no refuge for investors caught in this year's downdraft on Wall Street. Most state stocks finished the year in the red.

A Robert W. Baird & Co. analysis of more than 400 Florida-based companies found the median stock down 35 percent, which means half did better and half did worse.

Forty of the stocks fell more than 90 percent during the year, including based Paradyne Networks Inc. of Largo, which had been one of 1999's hottest stock offerings, tripling on its first day of trading. This year the maker of broadband communications equipment was down 93 percent.

Many of 2000's best performers were health care and financial services companies. Utilities and some retailers and restaurant chains also did well.

Health care companies in Florida along with those nationally have benefitted from expectations that Congress will increase health care spending and that the election of George W. Bush as president will lead to less-stringent health care regulation.

"Bush ought to usher in a "kinder and gentler' fraud and abuse environment," predicted Credit Suisse First Boston Corp. when it included Lincare Holdings Inc. of Clearwater in its "Bush Basket" stock list this fall. Lincare, which provides respiratory therapy services, has been operating under the cloud of a federal investigation.

Morningstar stock analyst Robert Plaza said investors recognize that Lincare is in a perfect position to benefit from an increase in Medicare spending. The stock took off this fall and finished the year up 65 percent.

"When Uncle Sam decides to open the floodgates, they'll be one of the first beneficiaries," he said.

The Bush effect also gave a boost to top-performing Pediatrix Medical Group Inc., a Sunrise company that provides physician services to hospital intensive care units for newborns. The stock jumped earlier this month after U.S. Bancorp Piper Jaffray called it a "strong buy." It finished the year up 244 percent.

U.S. Bancorp analyst Bill Bonello predicted that Medicaid investigations will be resolved and that company revenues will go up because Pediatrix doctors will become less conservative in assigning the diagnostic codes that determine how much the company can collect from the government program.

Other big health care winners this year included pharmaceutical companies such as Kos Pharmaceuticals Inc. and IVAX Corp. of Miami and Andrx Group of Fort Lauderdale.

In the Tampa Bay area, stock of HealthPlan Services Corp. fell in April when the company called off a planned merger with a Dallas financial services company. But since the end of the summer, the stock has been on the upswing as the company, which administers health care benefits, sold off some of its business units to pay down debt. A 164 percent gain made the stock one of the year's big winners, although the company ended the year with an after-hours announcement about restructuring plans.

In the financial sector, banks, brokerage firms and insurance companies have enjoyed renewed interest from investors fleeing technology stocks and looking for value. The trend paid off for investors in profitable growth companies such as Raymond James Financial Inc. of St. Petersburg and the insurance agency Brown & Brown Inc., which has dual headquarters in Tampa and Daytona Beach. Both stocks were up more than 80 percent.

But financial services companies that staked their futures on the Internet did not fare nearly as well. Among the biggest investment disasters of the year were GlobalNet Financial.com Inc., a Boca Raton online financial services company, and Mortgage.com, an online mortgage service based in Sunrise.

There also were a lot of sad stock stories this year in telecommunications. Ursus Telecom Corp. of Sunrise lost most of its value, as did pay phone operator Davel Communications Inc. of Tampa, which was delisted from Nasdaq. Intermedia Communications Inc. of Tampa was down 81 percent, a performance that would have been worse if not for a rally on the last day of the year. WorldCom Inc. said Friday it plans to go through with its pending acquisition of Intermedia, a deal Intermedia shareholders had worried might fall apart.

It was a year when many former highfliers faced reversals of fortune: Jabil Circuit Inc. of St. Petersburg was down 30 percent after a 96 percent gain last year, and Digital Lightwave Inc. of Clearwater was down 50 percent on the heels of a phenomenal 2,668 percent gain in 1999.

This year's biggest deal in the Tampa Bay area was Carolina Power & Light's acquisition of St. Petersburg-based Florida Progress Corp. The $54-a-share price gave investors a 28 percent gain for the year, although the taxability of the transaction caused some grumbling.

Also, shareholders of St. Petersburg-based Primex Technologies Inc. accepted a $32.10-a-share buyout offer from defense contracting giant General Dynamics, which represents a 55 percent gain for 2000.

But companies hoping to raise money through new stock offerings did not find the dealmaking environment so friendly. Among the few Florida companies able to pull off a stock offering this year was Largo-based Go2Pharmacy Inc., which went public last month. The company, a supplier to DrugMax, makes and sells nutritional supplements and health and beauty aids. Its 1-million-share stock offering was priced at $7.88 a share, but Friday it closed at $2.75.

At many companies, plunging stock prices reflect internal problems. There were earnings warnings and accounting revisions at previously highflying Sykes Enterprises Inc. There were financial woes at Danka Business Systems and Insurance Management Solutions Inc.

And more companies faced delisting from Nasdaq for their inability to keep their stock prices above $1 a share. Among those to get the boot this year: Davel, Vision Twenty-one Inc. and Shells Seafood Restaurants Inc.

Investors who like shopping for beaten-down bargains will find plenty to choose from in Florida.

Up next:MAKING NEWS

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