O.C. Stocks Make Up Some of Their Losses as Investors Grab for Bargains

By LESLIE EARNEST and JOHN O’DELL

Sept. 2, 1998 12 AM PT

TIMES STAFF WRITERS

Orange County stocks recovered some of their heavy losses Tuesday, led by companies that absorbed some of the biggest hits during Monday’s big market sell-off.

What a difference a day made for Consumer Portfolio Services Inc. shares, which surged 51% to rank second on the list of percentage gainers in the county.

During Monday’s massive slide, the Irvine financial services firm led the list of losing stocks, dropping 57% as already jittery investors were spooked by an analyst’s recommendation to unload the shares.

The firm, which buys, sells and services automobile and other retail installment sales contracts, issued an accounting of its loan delinquency and repossession records aimed at calming investor fears that it might end up without sufficient cash income to fund its operations.

The move apparently worked. The stock gained 97 cents to close at $2.88 a share, although it is still far below its year-ago high of $17.88.

Several Orange County high-tech stocks that had been battered the previous day also bounced back Tuesday. Sync Research, which tumbled nearly 27% on Monday, surged 45.5% Tuesday to close at $2. Powerwave rose more than 35% to $8.88. A day earlier, the stock had dropped nearly 18%.

Indeed, it was a bullish session for local stocks in general as investors jumped into the market in an effort to snap up stocks at depressed prices. The Times index of 146 Orange County stocks moved up 4.07 points to close at 146.80.

“The calls I’ve had are people looking to buy bargains,” said Gary Cremo, senior vice president of investments at Cruttenden Roth Inc. in Irvine.

Other brokers acknowledged, however, that they were spending time trying to soothe clients’ rattled nerves.

“Customers needed to have their hands held a little more than usual,” said Christopher A. Horner, branch manager at Cruttenden Roth.

“I think today people are feeling a lot better, now that they see a lot of the large cap stocks starting to move back up a little bit,” he said Tuesday, as the television behind him reflected the market’s upward climb. “If we can hold this gain, I think investor sentiment is going to recover somewhat.”

Meanwhile, more companies announced plans to buy back shares of their depressed stocks, and one firm scrapped plans for a stock offering because of the gyrating markets.

Three companies--Oakley Inc., ICN Pharmaceuticals Inc. and BNC Mortgage Inc.--announced stock repurchase plans.

SM&A; Corp., a Newport Beach firm that helps other companies win government contracts, said it has called off plans for the company and shareholders to sell 5 million shares of common stock.

“After conferring with our underwriters, we concluded that current market conditions are not conducive to an offering meeting the company’s objectives,” chief executive Steven Myers said in a statement released Tuesday.

Shares of SM&A;, formerly Steven Myers & Associates Inc., closed Tuesday at $20.88, down 25 cents.

Oakley Inc., the Foothill Ranch maker of high-performance sunglasses, said Chairman Jim Jannard, who has been buying up shares regularly for months, plans to purchase up to 5 million additional shares from time to time. Jannard has purchased more than 6 million shares since January 1997, bringing his current ownership in the company to 40.7 million shares, or about 57.6% of the company’s shares outstanding.

Oakley’s stock, which lost 28% of its value during the market’s general slump the last six weeks, closed Tuesday at $11.19, up $1.06 a share, or 11.2%.

Jannard said he is continuing to purchase company stock because “we believe in the fundamental strengths of the company and its long-term growth prospects.”

Stock repurchases by the chairman and other executives usually are considered a bullish sign, said John Whates, a tax partner at the Deloitte & Touche accounting firm in Costa Mesa. “They’re actually putting their own money on the line,” he noted.

Costa Mesa drug maker ICN Pharmaceuticals Inc. said its directors approved a plan to repurchase up to $10 million of the company’s outstanding shares and to develop a long-term program that would reduce the company’s outstanding shares by 10%.

“We believe the company’s stock price is significantly undervalued,” Chairman Milan Panic said.

ICN stock, which lost more than half of its value in the last six weeks, moved up 4.4%, or 69 cents, to close Tuesday at $16.06.

BNC Mortgage Inc., one of the big stock losers in Orange County over the last six weeks, said Tuesday its directors have authorized the specialty finance company to repurchase up to $2 million shares of common stock. Irvine-based BNC’s stock rose 16.3%, or $1, to $7.13 a share.

The market’s volatility also has slowed initial public stock offerings, said Cruttenden Roth’s Horner.

“August was the largest amount of postponements in about a 10-year time,” he said.

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Market Rebound

Orange County stocks that gained and lost the most in Tuesday’s trading:

Gainers

1. NAB Asset Corp.: +91.7%

2. Consumer Portfolio: +50.8

3. Sync Research: +45.5

4. Powerwave Technology: +35.2

5. Cam Data Systems: +27.3

Losers