Attendance, Expectations Up at Investors Conference : Growth: Newport Beach gathering finds market confidence rebounding as Gulf War jitters calm and interest rates keep falling.
While a lot of small growth companies are prone to boastful statements about one-of-a-kind products and services and markets of vast potential, the folks at PDA Engineering take a more modest approach.
Louis A. Delmonico, president and chief executive of the Costa Mesa software company, talked Wednesday about his desire to build a conservative and consistent company that investors can rely on. Speaking to a gathering of about 200 investors, stock analysts and others, Delmonico said his goal for PDA is three years of consecutive financial growth. Only when that is done, he said, would he be ready to talk about the company’s achievements.
His message may have seemed reassuring at a time when fears of recession and the war in the Persian Gulf have investors and the general public feeling jittery.
Despite the jitters, organizers of the annual Southern California Growth Stock Conference in Newport Beach said that the turnout on the first day of the two-day gathering was up from last year. Mark Matheson, research director of Cruttenden & Co., a Newport Beach investment bank that co-sponsors the event, said Wall Street seems to be gaining some confidence about the U.S. economy--at least compared to the turmoil and uncertainty of a few months ago.
“The Middle East war has reduced that uncertainty,” Matheson said. “Oil prices have come down. People perceive that the Americans are winning the war against Iraq. They are less worried about inflation and there’s the feeling that American policy makers can turn their attention to fighting the current recession by lowering interest rates.”
Since war broke out in the Persian Gulf last month, Matheson said, there has been a renewed interest in small growth companies. Investors have shown particular interest in the stock prices of high-tech companies whose values were driven down sharply by economic uncertainties.
Another important factor has been the decline in the cost of borrowing as interest rates come down, said David C. Holman, executive vice president of First Interstate Bank in Newport Beach. “And as the economy improves, we expect credit tightness to ease,” he said.
Frank Shu, president of Frontier Technology & Co., a Diamond Bar investment firm, said the stock market “is going well” as investors become more confident that the war won’t wreak havoc with oil prices and the world economy. “The probability of the Saudi oil wells being damaged by the war is diminished,” he said.
Shu, who represents several Taiwanese investors, said he’s eyeing a new technology from 3D Systems Inc. in Valencia, which is marketing a three-dimensional photo-processing technology that can project 3-D color images, such as animals and fishes, in a dark room without a screen.
“I can see this technology replacing aquariums and even pets in small homes,” he said.
Lisa Thompson, a research analyst with Lieber & Co., a Purchase, N.Y., investment firm, said she wanted to keep a tab on some high-tech companies she follows, such as Advanced Logic Research Inc., an Irvine computer maker.
“I wanted to know how the companies are doing since the Gulf War started,” she said. “I think there’s been a lot of indecision among buyers to spend money on new equipment and this holding off could mean that these companies’ first quarter (financial results) could be worse than expected.”
