Datum Inc. Hardest Hit Among Losing O.C. Stocks
The Hong Kong stock market panic that reverberated worldwide took chunks out of some Orange County companies, but bargain hunters were busy buzzing their brokers Thursday as they looked for good deals on sagging stocks.
Datum Inc. in Irvine took the biggest whack, losing 28% of its value on the Nasdaq exchange. The stock of the maker of timing instruments for the telecommunications industry fell $7.19 a share to close at $18.44.
Wall Street also knocked down Consumer Portfolio Services Inc., an Irvine provider of auto loans to those with less than stellar credit. Its stock fell 19%, losing $3.06 to close at $12.94 a share in Nasdaq trading.
“This will pass,” said Datum’s chairman, Louis Horwitz.
On Wednesday, Datum said it had laid off 50 of its 450 workers at its Irvine plant, a response to an inventory backlog caused by a major customer that changed the way it paid for shipments. The change caused an inventory build-up of $2.8-million worth of wireless telephone components--and the prospect of lower fourth-quarter sales because of the temporary decline in demand.
“Clearly, in our view, the market is overreacting. We just had a very good quarter, close to a record, and our earnings for the first nine months were up 386%,” Horwitz said.
Thursday’s Wall Street beating, he said, was an unreasonable reaction by short-sighted analysts and traders both to the company’s news and to the general market decline.
But brokers reported that their clients weren’t spooked by the market volatility. Clients, they said, generally saw the drop in prices as a buying opportunity, not a reason to sell.
“To tell you the truth, there wasn’t a lot of nervousness,” said Don Dalis, divisional vice president at PaineWebber’s Newport Beach office. “Clients have seen this before.”
Newcomers to the market were a little edgier. “They call in, they check,” he said.
Eric C. Inglett, a stockbroker in the Edward Jones Investment Co. office in Orange, said he took about 20% more calls Thursday than usual.
“My clients know that when the market goes down on good quality companies, it’s a good time to buy,” Inglett said. “They’ve been looking for a sale, so we’ve been buying a lot today.”
But the trading didn’t much help companies like Datum or Consumer Portfolio.
On Wednesday, Consumer Portfolio had announced record third-quarter earnings of $4.8 million a share. But deep in the financial report was evidence that more loans were on shaky ground. Its provision for losses for the first nine months rose 47% to $2.65 million from $1.8 million the same period last year.
Executives at Consumer Portfolio weren’t available for comment.
On Thursday, WFS Financial Inc. in Irvine, a major national automobile finance company, reported lower quarterly and nine-month earnings but didn’t have to sock away as much as it did last year for possible losses.
Wall Street still turned WFS into the third-biggest loser in the county. The price fell $1.31 a share--or 6.9%--to close at $17.69 in Nasdaq trading.
More than a dozen other local companies, from the large Western Digital Corp. in Irvine to the much smaller I-Flow Corp. in Irvine, lost 4% to 6% of their value in Thursday’s trading.
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Stock Scare
The Bloomberg Orange County Index, a weighted index designed to measure performance of major Orange County stocks, fell 4.06 points Tuesday to 185.11. Daily closing index levels since Oct. 1 and the top 10 losers in Tuesday’s drop:
October
Daily closing: 184.24
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Company Close Change % change 1. Datum Inc. $18.44 -$7.19 -28.00% Irvine, precision instruments 2. Consumer Portfolio Services $12.94 -$3.06 -19.10% Irvine, auto loans 3. WFS Financial $17.69 -$1.31 -6.90% Irvine, consumer auto loans 4. Powerwave Technologies $38.25 -$2.63 -6.42% Irvine, wireless equipment 5. Ceradyne Inc. $5.50 -$0.38 -6.38% Costa Mesa, advanced technical ceramics, electronic components 6. Printronix Inc. $18.63 -$1.25 -6.29% Irvine, computer printers 7. Microsemi Corp. $15.50 -$0.94 -5.70% Santa Ana, electronic components, semiconductors 8. RemedyTemp Inc. $25.00 -$1.50 -5.66% San Juan Capistrano employment agency 9. ICN Pharmaceuticals $52.25 -$3.00 -5.43% Costa Mesa 10. Western Digital $35.13 -$1.81 -4.91% Irvine, computer hardware
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Source: Bloomberg News
