Quarter tough for local stocks

The Inland Northwest was nowhere to hide for investors looking for a refuge from the storms that swept through the stock markets in late 2007.

An index that tracks the performance of 15 area companies tumbled 9 percent during the last three months of the year, double the setback suffered by the Dow Jones industrial average. The index created by Spokane-based Hart Capital Management Inc. retreated 14.3 percent during all of 2007.

Steep fourth-quarter reverses suffered by Ambassadors Group, down 52 percent; Coldwater Creek, down 38 percent; and Sterling Financial, down 38 percent, weighed heavily on the index.

Ambassadors, which books educational tours overseas, was victimized by a weak U.S. dollar that substantially increased the cost of international travel. A dicey retail environment troubled Coldwater Creek, and Sterling was caught with loans to contractors having difficulty selling new homes.

Shares of other banks included in the index – Idaho Independent Bank, Intermountain Community Bancorp, and Northwest Bancorporation Inc. – also lost value.

Four companies made headway during the quarter. Coeur d’Alene Mines climbed 30 percent thanks to higher precious metals prices, which also helped boost Hecla shares 4 percent. Avista Corp. rose 6 percent with news of stronger credit ratings for the utility. Automated-meter maker Itron Inc. rose just 3 percent, but that topped off a year in which shares boomed 85 percent.

Itron was one of the only area stocks that scratched out gains for 2007. The others were Hecla, up 22 percent, and Potlatch, up a little more than 1 percent.

“It’s been an interesting six months,” said Hart Capital Management President Craig Hart.

The Inland Northwest has greatly diversified its economy during the past two decades, he said, but that has not insulated the region from stresses like those caused by the global credit crunch.

Stocks included in a regional index created by D.A. Davidson Co. also endured a tough quarter. The Davidson 99 Regional Stock Index fell back 6.9 percent during the fourth quarter, which pared its gain for the year to the same figure: 6.9 percent.

Fred Dickson, Davidson’s chief market strategist, attributed the setback to losses registered by several banks, most notably giant Washington Mutual, off 70 percent for the year as its mortgage business tanked.

Chipotle Mexican Grill, up 158 percent, and Amazon.com, up 135 percent, were the big winners.

Dickson, noting the Davidson index includes shares of some Utah and Colorado companies in addition to Northwest stocks, said tech shares generally fared well, as did natural resource shares, while retail joined financials on the negative side. Companies with international operations held up well.

“It was a very eclectic performance,” he said.

Dickson said 2008, at least in the first quarter, will be challenging.

“We don’t see a lot of turnaround news,” he said.