Investors Eye Local Firms for Bargains : Expo: Small-to-medium companies make their pitch before hundreds at Growth Stock Conference.
In search of companies not afflicted by the recession, small and institutional investors alike gathered here Wednesday to listen to chief executives pitch their stocks like vendors at a bazaar.
Several hundred investors, some looking and some buying, are expected to attend the presentations of 48 small-to-medium local companies through today at the fourth annual Southern California Growth Stock Conference organized by Cruttenden & Co., an investment banking firm in Newport Beach.
“It can’t be called a recovery yet, so in an environment like this, you’re looking at the many growth companies that really respond to company-specific events rather than the overall economy,” said Tod Lenagh, director of equity investments for institutional investor Clemente Capital in New York.
Among the Orange County companies making presentations Wednesday were shoemaker Vans Inc. in Orange, car care products maker Armor All Products Corp. in Aliso Viejo, health maintenance organization FHP International Corp. in Fountain Valley, training services company National Education Corp. in Irvine, plastic container maker Ropak Corp. in Fullerton and plastic components maker Cimco Inc. in Costa Mesa, and defense engineering firm Comarco Inc. in Anaheim.
Walter Cruttenden III, chairman of Cruttenden & Co., said the good turnout of investors indicates that the equity investment climate is attractive at this year’s conference relative to the gloom that persisted a year ago after the outbreak of the Persian Gulf War.
“In a recession, it’s harder to find the growth companies. But they are there. . . . People are interested in all the public offerings,” Cruttenden said. “It’s not just a window for going public, it’s a big garage door opening.”
So far in 1992, 11 Orange County companies have filed intentions to go public with the Securities and Exchange Commission, Cruttenden noted. By comparison, there were 11 public offerings by Orange County companies during all of 1991.
Richard P. Leeuwenburg, chief executive of Orange-based Vans, led the conference with a presentation about his shoe manufacturing company, which went public in August, 1991.
Leeuwenburg said business is so good that the company is in the final stages of deciding where to locate its new manufacturing plant. He said Vans is considering sites in Arizona and Southern California.
Jerome Gross, Vans vice president of corporate development, said the $5-million plant would employ as many as 600 people and be able to produce 40,000 pairs of shoes a week, up a third from 120,000 a week at the company’s existing plant in Orange.
The Vans pitch piqued the interest of Lenagh, whose company manages a $400-million equity fund.
“It’s encouraging to see a manufacturer can be based in America and produce a product that is competitive with manufacturing in low-cost overseas regions,” Lenagh said.
Ken Evans, chief executive of Armor All, said he came to pitch the story of his company’s financial rebound during the past nine months. After a difficult fiscal 1991, which ended March 31, his company expects to boost sales from $133.8 million a year ago to $140 million in the current year through its renewed marketing efforts and new automotive product launches.
It wasn’t clear how all the presentations were received. Juan Padron, an individual investor from Chino, said: “Words are cheap. You have to do your homework. Some growth companies do well, some are high risks.”
