Stockholders Are Waiting and Seeing : Market: The current nose dive has invoked a modest response from O.C. investors. Most of the county’s publicly traded companies’ stocks followed the plunge.
As the much-watched Dow Jones industrial average continued its roller coaster ride Tuesday, stockbrokers throughout Orange County said their customers--inured to market plunges since the crash of 1987--mostly have adopted wait-and-see attitudes.
In a few cases, savvy customers have begun hunting for bargains among companies whose stock prices have plunged.
The modest local response to the market since Friday’s 120-point dive is understandable, brokers said, because there are few alternatives for investors in the current economy. Interest rates are down, and yields from bond investments are at a 10-year low.
And individual investors in Orange County tend to be conservative and take a long-term view of the market, brokers said.
“If anything, my clients have learned from the last three major market downturns that there’s not much to be gained if they panic,” said William Wong, a broker at the Kidder Peabody & Co. office in Newport Beach.
“It’s the calmest I’ve ever seen it,” said Joseph Conway, vice president of Diversified Securities’ Anaheim Hills office. “But most of our clients are in longer-term positions. “About the only calls we are getting are from clients wanting to add to their position in a company whose price has fallen. It has really helped that clients have been through (the crashes of) 1987 and ’89 and realize there are opportunities in a declining market.”
One investor who has spent the past few days looking for bargains is Gary Graves, a resident of Orange.
He said he has been bracing for a stock market decline since summer and has been cautious because he felt that a number of stock issues were overvalued. When the market dove Tuesday, he went against the wave of selling and increased his stake in pharmaceutical stocks, such as ICN Pharmaceuticals Inc.
“I did a lot of research to see whether a stock is overvalued or not,” he said. “I see a growth potential in some pharmaceutical stocks in the next 12 to 15 months, and since I saw that some of these stocks are undervalued, I bought some more.”
ICN was one of the market’s stellar performers Tuesday, rising $1.37 to close at $15.50 a share on the New York Stock Exchange. The 9.7% gain came on the heels of the company’s announcement Tuesday morning that its controversial drug, ribavirin, has been approved for use in Hungary as a treatment for patients with HIV.
ICN’s sister companies, ICN Biomedicals, SPI Pharmaceuticals and Viratek, also benefited from the news, and all posted sizable gains.
But these were about the only firms in Orange County’s contingent of publicly traded medical companies that did post gains Tuesday.
In all, 18 of the 24 medical and biotechnology companies’ stock prices dropped. The county’s computer, electronics and computer parts companies’ stocks also tended to follow the market down Tuesday.
Joel Don, a spokesman for AST Research in Anaheim, said there was no specific news about his company that would have accounted for the $1.75-per-share drop in the price of the Irvine computer maker’s stock Tuesday. The 9.2% plunge, he said, reflected investors attitudes toward technology stocks in general.
Of the 33 publicly traded computer and electronics firms in the county, only two saw their stock price rise Tuesday, while 15 fell and 16 remained unchanged.
And, as usual, there were a few companies whose stock performance ran against the trend.
The outstanding example among Orange County firms Tuesday was Anaheim’s Bridgford Foods. Riding a wave of investor enthusiasm generated by its announcement Tuesday of a 3-for-2 stock split--the fifth since January 1988--Bridgford’s share price soared $2.50 to close at $23.75 in over-the-counter trading.
Times staff writer Dean Takahashi contributed to this story
A Bloodletting for Medical Stocks
Medical companies were heavily represented among the Orange County companies whose stock experienced the sharpest drops Tuesday.
Closing Dollar % Name Price Loss Loss US Facilities $11.38 -$1.88 -14.1% ReadiCare 6.00 -0.63 -9.5% SysteMed 6.00 -0.63 -9.5% Birtcher Medical 16.50 -1.50 -8.3% AST Research 17.25 -1.50 -8.0% Advanced Logic 9.50 -0.75 -7.3% Tokos Medical 33.25 -2.50 -7.0% Safeguard Health 7.13 -0.50 -6.6% Quantum Health 19.88 -1.38 -6.5% Allergan 21.25 -1.25 -5.6% Rainbow Tech. 19.00 -1.00 -5.0% FileNet 19.00 -1.00 -5.0% TriCare 14.25 -0.75 -5.0%
Source: Newport Securities
