LI's winning and losing stocks in '09

INVESTING

Shares of Long Island's 83 publicly traded companies staged a broad recovery in 2009, as did national indexes. But economists and stock-watchers question whether the recovery is real or sustainable.

The Long Island stock index, compiled by Bloomberg News, ended 2009 with a gain of 1.33 percent. That seems minuscule, but in 2008 - the height of the current recession - shares of Island stocks had plummeted an eye-popping 32.19 percent.

Big winners in 2009 included Veeco Instruments Inc. of Plainview, a manufacturer of precision equipment. Veeco shares ended the year at about $33 a share. Share prices were as low as $3.22 in March. Veeco posted a third-quarter profit, compared with a loss in the same period in '08.

Another big winner was Hi-Tech Pharmacal of Amityville, a generic-drug manufacturer. In its most recent financial report, the company said a 63 percent rise in sales for the quarter ending Oct. 31 helped boost net income 570 percent.

Big losers included Smithtown Bancorp, down 62.9 percent in 2009. It recently announced it would suspend dividend payments to shareholders and analysts say the bank may be a takeover target.

The Island's major companies fared better in '09. Arrow Electronics Inc. of Melville, a components distributor that is the region's largest company in sales, saw shares rise to about $29 from about $15 in March. Cablevision Systems Corp. of Bethpage, which owns Newsday, was up to $25.82. Shares were at about $9.50 in March.

But companies did a lot of cost-cutting last year, and interest rates were low, making borrowing more affordable.

Pearl Kamer, an economist for the Long Island Association, said the Island's 6 percent unemployment rate and its anemic job growth do not spell good things for companies' long-term profitability.

"For a sustained economic recovery we need job growth," Kamer said.

Stock market guru Alan Newman, editor of CrossCurrents, a Wantagh-based newsletter, said he sees a correction in the market's recovery this year. After that, Newman said, "There will be a bull market, but not like in the last generation. It's going to be a very boring market for a long time to come." That includes LI stocks.