An Odd Lot for Stocks : Market: One adviser sees stocks in high-risk zone. Orange County-based companies outperformed Dow Jones Industrial Average.

On Wall Street, 1991 was neither the best of years nor the worst of years, but it was, perhaps, one of the weirdest of years.

It featured a stock market that was buoyed by the Persian Gulf War, battered by a sudden plunge, and then defied gravity at year’s end to close at a record high of 3,168.83.

“It’s levitating,” said Garfield L. Logan of Optivest, a Newport Beach investment counselor, who sees the market heading into the high-risk zone in 1992.

Shares of Orange County-based companies gained an average of 32.5% in 1991, outperforming the Dow Jones Industrial Average, which increased 20.3%. But most of the local stocks are traded on the NASDAQ system, and as a group they fared far worse than the NASDAQ composite, which gained 56.8%. Analysts blamed the recession and tough times for technology companies, which predominate in Orange County.

The county’s biggest winner was ICN Pharmaceuticals Inc. of Costa Mesa, which staged a stunning turnaround in 1991 with a stock rise of nearly 522%. In 1990, its stock dropped almost 44%.

ICN’s two subsidiaries were also among the top 10 gainers of 1991. Shares of Viratek Inc., whose antiviral drug ribavirin has been approved in Ireland for experimental use against the HIV virus, rose 519%, and SPI Pharmaceuticals, which has begun a joint venture to sell drugs in Yugoslavia, rose 231%. ICN holds a majority interest in both companies.

ICN had been a target of Securities and Exchange Commission scrutiny because of allegations that it “hyped” Viratek stock and misled regulators and the public about ribavirin’s effectiveness against AIDS. But in May, ICN paid a $600,000 fine to settle civil charges stemming from its promotion of Viratek as a possible anti-AIDS drug, and in October it settled a related suit by the SEC without admitting or denying wrongdoing.

“They had what the Street called the Milan Panic discount,” said Steven C. DeLuca, an analyst with Cruttenden & Co. of Newport Beach, referring to ICN’s controversial founder. “He’s had a storied past.”

But Panic succeeded in luring investors back, and ICN’s stock rose from $2.875 a share at the end of 1990 to close at $17.875 a share Tuesday.

Another big winner in 1991 was Clothestime Inc. of Anaheim, whose strategy of deep discounting on name-brand women’s clothing helped propel its share price up 361%. Last year, Clothestime was among the county’s 10 biggest percentage losers after its shares lost 69% of their value. Clothestime finished the year at $8.50 a share, up from $1.69 on Dec. 31, 1990.

Though most Orange County stocks mirrored the performance of their industries, two technology companies bucked the downward trend. Rainbow Technologies of Irvine’s devices to prevent piracy of computer software helped push its stock up 258% for the year. The stock fell 75 cents in trading Tuesday, however, to finish the year at $23.25. Filenet Corp. of Costa Mesa, which makes document imaging systems--essentially the computerized successor to microfiche--also soared, thanks partly to a year-end surge. It gained $3.125 since Friday to finish at $24.875, up 193% during 1991.

Faring worst was surf wear supplier Quiksilver Inc. of Costa Mesa, which lost 53% of its stock value in 1991, even though sales swelled $5.9 million to $97.1 million for its fiscal year ended Oct. 31. Analyst DeLuca blamed management changes, heated competition in surfwear and the recession.

Shares of Community Psychiatric Centers Inc., which labored under investigations of alleged billing irregularities in the psychiatric hospital industry and an unexpected 98% drop in third-quarter earnings, dropped almost 52% for the year. Western Digital Corp. of Irvine, a victim of personal computer price wars, slipped 49%.

As for 1992, Orange County analysts watching the market leap ever upward this week were divided among bulls and bears. Some said low interest rates alone could not sustain such a steep rally; others said investors--especially those who are already in the stock market--have nowhere else to go.

“If you’ve got money, where in heck else are you going to put it?” said Larry Selwitz, an investment adviser at Fin-Com in Newport Beach. “I’m not all that bullish on the market next year, but I wasn’t that bullish last year, and I was wrong.”

Optivest’s Logan argued that the overall market is clearly overvalued. Price-earnings ratios, which get dicey after 20, are now over 31, he said.

Price-earnings ratios give investors an idea of how much they are paying for a stock’s earning power. For example, a stock that sells for $20 a share that earned $1 last year has a price-earnings ratio of 20. Companies with ratios above 20 generally are young, high-growth companies and make for riskier investments.

Two other investment yardsticks, price-to-book ratios and price-dividend ratios, are also at historic risk levels, Logan said.

“The last two times we got up to these ratios on the index, we had a crash,” he said.

“Markets very seldom crash without interest rates going up,” he added. “That’s the only thing that’s keeping it airborne.”

Where the Smart Money Went

Some industries fared better than others in Orange County, with companies providing such necessities as food, medicine and health care coming out on top. Here’s how the average share in each of six county industries fared: Food & Restaurants: $6.13 Biomedicine & Health Care: $5.45 Construction & Engineering: $2.43 Financial Services & Real Estate: $2.07 Computers & Electronics: $0.94 Plastics: $0.53

Companies with Greatest Percentage Gains

1) ICN PHARMACEUTICALS 521.74 2) VIRATEK INC. 518.75 3) CLOTHESTIME INC 361.03 4) US FACILITIES CP. 283.87 5) RAINBOW TECHNOLOGIES 257.69 6) TOKOS MEDICAL 242.31 7) SPI PHARMACEUTICALS 230.67 8) LASER PRECISION 209.09 9) COMARCO INC. 206.67 10) FILENET CORP. 192.65

Companies with Greatest Percentage Losses

1) QUIKSILVER INC. -52.59 2) COMMUNITY PSYCHIATRIC -51.71 3) WESTERN DIGITAL -48.72 4) PRINTRONIX INC. -47.06 5) DICEON ELECTRONICS -40.00 6) VARCO INTERNATIONAL -31.83 7) CIMCO -30.00 8) COMMERCEBANK -29.03 9) ARCHIVE CORP. -28.00 10) THREE D DEPTS. -24.00

1991 Stock Performance

Here are 1991 closing prices and net yearly change for the 102 largest publically traded companies in Orange County.

Last 1991 Name & Sale Net 1991 1991 Product 12-31 Chg High Low Advanced Logic 9 7/8 -3/8 20 1/2 8 1/2 Microcomputers Advantage Life Prod. 1 1/4 -3/4 2 1/2 Stop Smoking Allergan Inc. 24 1/2 +7 25 17 1/8 Eye, Skin Care Alpha Micro. 2 1/4 +3/8 3 1/2 1 1/4 Computers Amer. Health Svcs. 1 5/8 +7/8 1 7/8 5/8 Med. Imaging. American Pacesetter 1 -1 3/4 3 3/4 Banking Amplicon 14 3/4 +5 3/4 16 1/4 7 1/2 Computer Leasing Archive Corp. 4 1/2 -1 3/4 8 3/4 3 Tape Drives Armor All 10 1/2 -1/2 13 9 1/4 Car Care Products AST Research 16 1/2 -2 1/8 32 15 1/2 Electronics BE Avionics 14 1/2 +7 15 3/4 7 1/2 Airline Entertainment Beckman Ins. 18 1/4 +3 1/4 20 14 3/4 Lab Equipment Belcor Inc. 5/8 -1/4 1 1/4 1/2 Plastic Bags Bergen Brunswig 18 5/8 -4 1/4 25 7/8 16 7/8 Medical Dist. Birtcher Medical 17 +8 3/4 21 7 1/2 Medical Devices Bridgford Foods 30 +17 30 13 Food Products Cam Data Sys. 2 +1 1/4 2 3/4 Computer Systems Carl Karcher 7 7/8 +1 3/4 9 1/2 6 Fast Food Centennial Group 1/8 -3/16 1/2 1/8 Real Estate Ceradyne 4 1/8 -1/4 5 5/8 3 3/4 Aerospace Chesapeake Ind. 1/4 -1/2 7/8 1/4 Wood Products Cimco 7 -3 11 3/4 6 3/4 Plastic Components ClothesTime 8 1/2 +6 11/16 9 1/2 1 11/16 Retail Clothing CMS Enhancements 3 +7/8 4 1/4 2 Computers Comarco 5 3/4 +3 7/8 5 7/8 1 7/8 Defense Engineering CommerceBank 5 1/2 -2 1/4 11 5 1/2 Bank Commtron 5 7/8 +1/8 7 7/8 5 1/8 Video Tapes Community Psych. 14 1/8 -15 1/8 38 5/8 11 3/4 Psychiatric Hosp. Covington Tech. 1/4 -3/16 5/8 1/4 Home Bldg. Cytocare 2 +1/2 3 5/8 1 1/8 Medical Equip. Datum 3 1/2 +1 1/4 4 1/4 1 7/8 Electronic Systems Diceon 1 7/8 -1 1/4 4 3/4 1 1/4 Circuit Boards Distributed Logic 1/4 -1/8 7/8 1/8 Circuit Boards Downey S&L; 12 -3/4 18 1/4 10 7/8 S&L; DVI Financial 11 5/8 +7/8 13 3/4 7 3/4 Equipment Leasing EIP Microwave 1/4 -2 3/16 3 1/4 Microwave Counters Eldorado Bancorp 9 7/8 +3/4 11 3/8 8 1/4 Banking Emulex 5 1/4 -1/8 10 7/8 5 1/8 Electronics FHP Corp. 14 1/4 -1 28 1/2 10 1/2 HMO Fidelity National Fin. 18 +8 3/4 18 8 1/2 Title Insurance FileNet 24 7/8 +16 3/8 24 7/8 7 3/4 Image Processing First American Fin. A 12 1/4 +5 12 1/2 6 1/2 Title Insurance First American Fin. B 12 1/2 +5 1/4 12 1/2 6 Title Insurance Fluor 43 3/4 +7 1/4 52 1/2 34 Eng., Const., Mining For Better Living 8 nc 8 8 Diversified Furon Corp. 14 +3 1/4 15 1/8 10 1/4 Hi-tech Plastics Gateway Comm. 1 5/8 +5/8 2 1/2 7/8 Computer Equip. General Automation 3/4 +3/8 1 5/16 Computers Gish Biomed 8 5/8 -3/8 12 1/8 7 7/8 Medical Devices Gradco 2 1/2 +5/16 4 1/2 2 3/16 Paper Sorters Hammond 2 3/4 +1 3 1/2 1 1/2 Mortgage Banking Helionetics 6 1/4 +4 6 5/8 1 3/4 Power Converters Hycor Biomedicals 6 1/4 +2 1/4 6 1/4 4 Biomedical ICN Bio. 6 1/4 -1 1/8 9 1/8 4 7/8 Diagnostic Tests ICN Pharmaceuticals 17 7/8 +15 17 7/8 2 5/8 Drug Maker J.M. Peters 2 1/2 +3/4 3 5/8 1 5/8 Home Building Landmark Bank 7 -1 3/4 9 3/4 7 Bank Laser Precision 12 3/4 +8 5/8 15 3/4 1 3/4 Lasers MAI Systems 1/4 -3/8 1 1/8 Computers Metalclad 2 5/8 +1 1/8 3 1/4 1 Insulation Svc. Co. Microsemi 1 1/2 +1/2 2 3/4 3/4 Semiconductors National Education 9 1/4 +4 7/8 9 1/2 3 3/8 Voc. Training Nationwide Health 27 1/4 +9 3/4 27 1/4 17 Care Facilities Newport Corp. 8 +1/2 10 1/8 7 3/8 Laser Research Newport Electronics 3 7/8 +5/8 4 1/2 3 Measuring Inst. Nichols Institute 13 3/4 -3 1/4 17 4 5/8 Test Kits Odetics B 6 1/8 +3/8 7 3/8 5 3/4 Robotics, Recorders Odetics A 5 1/4 +7/8 7 3/8 3 7/8 Robotics, Recorders PDA Engineering 11 1/2 +2 3/8 13 8 3/4 Computer Software Pacesetter Bus. 3 3/8 -3/8 4 1/8 1 3/4 Indus. Prop. Pacific Inland 3 1/4 -1/2 3 3/4 3 1/4 Banking Pacific Scientific 10 3/8 +2 1/8 12 7 3/4 Electronic Inst. PacifiCare 39 1/2 +23 1/4 40 1/2 15 1/2 HMO Petrominerals 5/8 -3/8 1 1/8 5/8 Oil and Gas Presley Cos. 10 3/4 +3/4 10 3/4 7 3/4 Home Building Printronix 4 1/2 -4 10 1/2 4 1/8 Computer Printers Provena Foods 3 3/8 -3/8 4 5/8 2 3/4 Food Products Quality Systems 1 3/8 -5/8 2 1/8 1 3/8 Computers Quantum Health 23 7/8 +11 7/8 23 7/8 12 Therapy Serv. Quiksilver 6 7/8 -7 5/8 15 6 1/4 Clothing Manufacturer Rainbow Tech. 23 1/4 +16 3/4 24 3/4 5 7/8 Comp. Security ReadiCare 5 3/8 +3/8 8 3/8 4 5/8 Medical Centers Ropak 6 7/8 +2 1/8 9 1/4 4 1/4 Plastic Products Safeguard 9 3/8 +4 5/8 9 3/8 4 1/8 Dental HMO Shelly Assoc. 1/2 -3/4 1 1/2 1/2 Military Electronics SPI Pharmaceutical 31 +21 5/8 31 9 1/8 Drug Maker Standard Pacific 10 3/4 +4 7/8 11 1/8 5 1/4 Home Constr. SysteMed 6 1/8 +3 7/16 6 3/8 2 11/16 Drug Benefit Prog. Three-D 2 3/8 -3/4 3 1/8 2 1/8 Bed & Bath Stores Tokos Medical 44 1/2 +31 1/2 44 1/2 11 3/4 Home Health Care TriCare 13 +5 5/8 15 3/4 4 7/8 Occupational Health Care Trimedyne Inc. 5 3/8 +2 1/8 7 7/8 3 1/8 Laser Catheters UniCare 9 1/2 -1 7/8 21 1/8 8 3/4 Insurance US Facilities 14 7/8 +11 16 3 3/4 Insurance Varco 5 7/8 -2 3/4 12 5 5/8 Oil Drilling Equip. Viratek 12 3/8 +10 3/8 13 3/4 2 Drug Maker Wahlco Environmental 13 3/4 +5 1/8 14 7/8 7 1/8 Environ. Sys West Coast Bancorp 5/8 -1/2 2 1/2 5/8 Banking Westcorp 13 1/2 +7 1/2 13 1/2 5 5/8 S&L; West. Digital 2 1/2 -2 3/8 5 3/4 2 Semiconductors Wet Seal 9 1/8 +1 3/8 16 3/4 7 1/8 Retail Clothing Wynn’s International 16 3/8 -3/8 19 5/8 15 Auto Parts

M Name & k Product t Advanced Logic O Microcomputers Advantage Life Prod. O Stop Smoking Allergan Inc. N Eye, Skin Care Alpha Micro. O Computers Amer. Health Svcs. O Med. Imaging. American Pacesetter P Banking Amplicon O Computer Leasing Archive Corp. O Tape Drives Armor All O Car Care Products AST Research O Electronics BE Avionics O Airline Entertainment Beckman Ins. N Lab Equipment Belcor Inc. O Plastic Bags Bergen Brunswig A Medical Dist. Birtcher Medical O Medical Devices Bridgford Foods O Food Products Cam Data Sys. O Computer Systems Carl Karcher O Fast Food Centennial Group A Real Estate Ceradyne O Aerospace Chesapeake Ind. O Wood Products Cimco O Plastic Components ClothesTime O Retail Clothing CMS Enhancements N Computers Comarco O Defense Engineering CommerceBank O Bank Commtron A Video Tapes Community Psych. N Psychiatric Hosp. Covington Tech. O Home Bldg. Cytocare O Medical Equip. Datum O Electronic Systems Diceon O Circuit Boards Distributed Logic O Circuit Boards Downey S&L; N S&L; DVI Financial O Equipment Leasing EIP Microwave O Microwave Counters Eldorado Bancorp A Banking Emulex O Electronics FHP Corp. O HMO Fidelity National Fin. A Title Insurance FileNet O Image Processing First American Fin. A O Title Insurance First American Fin. B O Title Insurance Fluor N Eng., Const., Mining For Better Living O Diversified Furon Corp. O Hi-tech Plastics Gateway Comm. O Computer Equip. General Automation A Computers Gish Biomed O Medical Devices Gradco O Paper Sorters Hammond O Mortgage Banking Helionetics A Power Converters Hycor Biomedicals O Biomedical ICN Bio. A Diagnostic Tests ICN Pharmaceuticals N Drug Maker J.M. Peters A Home Building Landmark Bank O Bank Laser Precision O Lasers MAI Systems N Computers Metalclad O Insulation Svc. Co. Microsemi O Semiconductors National Education N Voc. Training Nationwide Health N Care Facilities Newport Corp. O Laser Research Newport Electronics O Measuring Inst. Nichols Institute A Test Kits Odetics B A Robotics, Recorders Odetics A A Robotics, Recorders PDA Engineering O Computer Software Pacesetter Bus. P Indus. Prop. Pacific Inland O Banking Pacific Scientific N Electronic Inst. PacifiCare O HMO Petrominerals O Oil and Gas Presley Cos. N Home Building Printronix O Computer Printers Provena Foods A Food Products Quality Systems O Computers Quantum Health O Therapy Serv. Quiksilver O Clothing Manufacturer Rainbow Tech. O Comp. Security ReadiCare A Medical Centers Ropak O Plastic Products Safeguard O Dental HMO Shelly Assoc. O Military Electronics SPI Pharmaceutical A Drug Maker Standard Pacific N Home Constr. SysteMed O Drug Benefit Prog. Three-D A Bed & Bath Stores Tokos Medical O Home Health Care TriCare O Occupational Health Care Trimedyne Inc. O Laser Catheters UniCare N Insurance US Facilities O Insurance Varco N Oil Drilling Equip. Viratek O Drug Maker Wahlco Environmental N Environ. Sys West Coast Bancorp O Banking Westcorp A S&L; West. Digital N Semiconductors Wet Seal O Retail Clothing Wynn’s International N Auto Parts

Markets: N--New York Stock Exchange, A--American Stock Exchange, O--Over the Counter, P--Pacific Coast Stock Exchange.

NA--Not Available, nc--No Change

Source: Newport Securities Corp., Costa Mesa