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Small Firms Woo Investors at Growth Stock Conference

Finance: Dana Point event allows managers of institutional funds to scope out promising companies.

February 19, 1997|PATRICE APODACA | TIMES STAFF WRITER

About 90 mostly small companies arrived at the tony Ritz-Carlton hotel in Dana Point on Tuesday to try to sell their stories--and their stocks--to nearly 1,000 institutional investors.

Among those participating in Cruttenden Roth's annual growth stock conference were several emerging Orange County companies. In between lobster bakes on the beach and rounds of golf, executives touted their products and prospects for growth in short presentations.

"We're looking for exposure," said Marvin P. Loeb, chairman of Trimedyne Inc., an Irvine maker of surgical lasers.

"If you're running an active business, you don't really have time to go talk to venture funds and institutional investors. Here, you make one presentation. It's efficient."

Most of the companies making pitches at the conference have $100 million or less in market capitalization--far below the radar screen of many institutional investors.

They include such firms as Magic Software Enterprises Ltd., an Irvine software developer with about $37 million in annual revenue, and Printrak International Inc., an Anaheim maker of automated fingerprint systems with $44 million in revenue in its latest nine-month period.

"Small-cap companies, you have to constantly keep them in front of investors," said Byron C. Roth, president of the Irvine investment firm. In its ninth year, the conference has emerged as one of the best-known local marketplaces for entrepreneurial firms in need of capital.

Only a few of the companies making presentations were slightly larger and more established, such as Dick Clark Productions, a Burbank television programming producer. One of the highest-profile firms that signed up for the conference, Pixar Inc., which produced the hit movie "Toy Story," canceled at the last minute.

Still, investors said the conference gives them the opportunity to scope out promising young firms.

"We're looking at some early-stage software companies," said Robert H. Hambrecht, vice president of Hambrecht & Quist, a San Francisco investment banking firm.

Although Cruttenden usually targets younger firms than Hambrecht & Quist does, he said, "maybe in six months there will be some mutually beneficial opportunities."

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