The Los Angeles Times from Los Angeles, California • Page 249

I "ip LOS ANGELES TIMES THURSDAY, JUNE 10, 1999 C5TT Market Savvy Advertisement US1D GARS TO BE SOLD More Funds Slap Fees on Those Who Bail Out Turnaround Potential Value-oriented investors often look for beaten-down stocks that have begun to show signs of a turnaround. The theory is that Wall Street can be slow to catch on to a company's reversal of fortune, but when it does, the stock will eventually move upward. So using Market Guide database, The Times screened for companies whose stocks had fallen at least 50 in price during the last year through Friday, but whose latest reported quarterly earnings per share were at least 50 higher than analysts' consensus estimates. Companies covered by fewer than three analysts were not considered. Of course, one quarterly earnings surprise does not make a bona fide turnaround, and the Times does not recommend buying or selling any of these risky, battered shares.

However, this list could provide bottom-fishers some ideas for further research. 1-year Latest 3-5 year Wed. earning proj'd. closing Name Ticker change surprise EPS" growth price OYOGeospace OYOG 300.0 16.7 $10.63 Corsair Communications CAIR 200.0 28.3 4.00 Renaissance Worldwide REGI 200.0 21.7 6.19 Vesta Insurance Group VTA 147.4 15.0 5.00 InfoUSA IUSAB 116.7 15.0 5.69 Capstead Mortgage CMO 100.0 5.0 5.81 Falcon FLC 100.0 24.4 9.25 Safeskin SFSK 100.0 21.0 11.38 Team America TMAM 100.0 35.0 4.81 Twinlab TWLB 100.0 20.0 8.63 Splash Technology Hldg. SPLH 85.7 17.5 7.06 industrial Distrib.

Grp. IDG 83.3 13.8 6.44 Pentacon JIT 80.0 10.5 4.81 Gadzooks GADZ 75.0 21.5 10.13 Olin 0LN 66.7 7.0 13.00 Evolving Systems EVOL 52.4 25.0 4.75 Allstate to Buy CNA's Personal Insurance Unit From Bloomberg News NORTHBROOK, 111. Allstate Corp. said Wednesday it will buy the personal insurance division of CNA Financial Corp. for $1.2 billion, as part of a strategy to revive growth by expanding sales of home and auto policies by independent agents.

Buying the CNA business would more than double Allstate's sales through independent agents who represent more than one insurer to about $3 billion and make it third-largest, up from ninth, in that market. Allstate previously turned to independents to reach customers in rural areas where setting up an Allstate-only agent was too costly. The Northbrook, DL-based company said it will pay CNA $140 million cash and provide $950 million to back the division's policies. It also agreed to give CNA about $110 million to use its name for six years. Allstate, the largest publicly traded insurer of U.S.

homes and autos overall, also said it hired Bruce W. Marlow, who worked at rival Progressive Corp. for 18 years through 1996, to run its independent-agent group. Marlow, 50, helped make Progressive the top personal insurer in the independent-agent market. Expanding the number of agents who sell Allstate policies could help the company boost sales growth.

Net premiums rose 4.8 in 1997, down from 5.8 in 1996 and 7.6 in 1995, according to A.M. Best Co. Allstate Chairman and Chief Executive Edward M. Liddy said in an interview that the company was responding to the one-fifth of insurance customers who prefer independent agents. "There are segments of the insurance-buying public that really only want to buy through an independent agent," he said.

"Career agents will continue to be absolutely the backbone of our company." The $45-billion independent-agent market for personal insurance has "no real dominant competitors," and represents an opportunity for Allstate, according to Liddy. Other companies selling insurance to individuals through independent agents include Progressive, Safeco Mercury General Corp. and Travelers Property Casualty Corp. Allstate rose 69 cents to close at $38.69, and Chicago-based CNA Financial fell 38 cents to close at $42.44, both on the New York Stock Exchange. A Briefing for Investors A growing number of mutual funds are imposing redemption fees on short-term investors in an effort to deter them from churning their shares and wreaking havoc on the funds.

While the absolute number of funds imposing such fees remains modest 311 of the estimated 5,000 stock funds available the figure shot up nearly 50 between December 1997 and April 1999, according to a study by Boston-based Financial Research Corp. And the number continues to grow. Recently, the Denver-based Invesco family of funds slapped a 2 redemption fee on five of its funds including four international portfolios for shares purchased after May 1 and held for three months or less. The sharp increase in redemption fees comes as mutual fund investors are showing less patience with underperforming funds. In the first four months of the year, stock fund redemptions rose 59, while new purchases increased just 27.

Short-term traders threaten fund company profits. But their actions also hurt the performance of the funds they flee, analysts note. Financial Research analyst Mike Evans says funds are often forced to keep a significant amount of cash on hand in case they're required to meet redemptions cash that otherwise could be invested in stocks to boost returns. Those that don't may be forced to sell stocks if redemptions rise-triggering trading costs and, potentially, taxes. "The impact can be pretty big," said Evans, "especially on smaller funds or international funds that might have difficulty getting into and out of certain illiquid stocks." Typically, funds slap redemption fees on investors who sell shares in EPSAnalysts' consensus on earnings per share Through Friday Sources: Market Guide, Bloomberg News For more information, go to http:www.marketguide.com.

or LICENSE Tovota of Cerritoj has announced its plans to have an $88 Dollar Used Car Slash-It bales this Suricuy, June 13, 1999. vvh-h it Dan Ryan, President of Caliber Automotive Liquidators says, sale is necessary due to the (act, that during recent years, new vehicle leasing has exploded. This erfplosidh has resulted in a record number of lb'v mileage lease returns that "the dealership must now That fart, Dan continued, "when combined with robust 1st quarter retail sales has resulted in a great'y expanded used car, truck, van and sport' Utility inventory." During this $88 DpJ4t Used Car Slash-It Sales Events. most used cars, trucks, vans knd sport utility vehicles will be sbld fr'r thousands of dollars below' their original price! CH All cars will be on display, in the secured and tented area at Toyota of Cerritos, 18700 StudebaRer Cerritos, CA 90703. At 8AM all vehicles will be opened so that buyters may inspect the venicies tor one nour.

On the windshield of each vehicle will be its normal retail selling price. When the sale begins at 9AM, whoever is! sitting behind the wheel in the' vehicle when the posted price is slashed Will have the first right to purchase the car at the slashed price. Prices will be slashed one time and one time only to the rock bottom price, including used cars for only $88! We will continue to slash all vehicle prices until lZ noott! The sale will be concluded at 1pm and the store will be back to "business as usual." This sale is ONE DAY only Ran or Shine On Sunday, June i3th; frtrfi bam to If m. Hit Further, Dan Ryan states, "That iif you've had credit problems in the past ana would liKe to taKe delivery, then bring the following: checkbook, paycheck stub, title, utility forget to call vour bank and. know what the pay-off balance is of your trade-in.

Any questions can oe directed to (562) 860-6561 at TOYOTA OF CERRITOS. Ask for "Slash" GdrddnC TOYOTA OF CERRITOS lljii 18700 StudebakeilC Cerritos, CA 1562) 860-6561 'Price does not include, tax, license, docs or smog fees. Must be 18 or more years old and have a valid driver's license. At least' 2 vehicles will be at this price including these: VIN 700949 010179. Vehicles subject to prior sale.

If listed vehicles are not available, comparable win oe sold tor same amount! C8lah-ll Sl Event, Inc. 19W Can Now! No on-told times. A frUnilhi liiwwilnlnahb' JnC Internet Specialist Is hem lot Network Systems Inltgnllol Data CaMIng and Troubleshootlnf w. addresses I Mies, Mjppon. ana lonsuiwion NT a.

Netware, Mac a PC per month I tifrttkt Ova will boost its ad budget next year to $200 million from $40 million this year. "This market is just exploding and now is the time for us to gain market share," said Tom Lewis, Ameritrade's co-chief executive. Mydiscountbroker.com, which was formed in 1996, will kick off a three-year, $40-million ad blitz on Labor Day. That's about 10 times the total amount the company has spent to this point. is a unit of Southwest Securities Group, a Dallas-based firm that processes stock trades for other companies and makes markets in about 500 Nasdaq stocks.

the first year after purchasing them. The fees usually range from 0.5 to 2 of the amount sold, the Financial Research study shows. Some companies use more complicated formulas. Houston-based Bridgeway Fund, for instance, reserves the right to impose a 2 redemption fee on investors who sell shares of either of its two index funds at an inopportune time. What's an inopportune time? It's defined as immediately following a five-day period in which the benchmark Standard Poor's 500 index of blue-chip stocks slides 5 or more.

"The last thing you want is a huge rush of people headed to the door right as the market is crater-ing," said Bridgeway portfolio manager John Montgomery. Mutual fund companies aren't the only ones imposing such fees. Discount brokers such as Charles Schwab charge similar penalties for investors who rapidly sell shares of funds purchased through their mutual fund "supermarkets." In general, redemption fees do a good job of deterring investors from selling shares too quickly, said John Markese, president of the American Assn. of Individual Investors, based in Chicago. They also deter so-called market timers from investing in funds in the first place.

Brokers Beef Up Their Ad Budgets If it already seems like every ad on CNBC or in the financial pages is from an online brokerage firm, just wait. Discount brokers Ameritrade Holding and said Wednesday that they will soon ramp up advertising spending amid an intensifying battle to lure customers. At an industry conference in San Francisco sponsored by investment bank Putnam, Lovell, de Guardi-ola Thornton, Ameritrade said it Daily Diary March April WILSHIRE 12,120.982 20.283 i DOW 30 ''V I I 1,318.89 1.56 i I '1 'if I Dow Will i NYSE I i- i- i i j- j4 o. vi f- h- I i 15 22 29 5 12 19 44.79 i ,1 I 1 1 id. i.L ill.

ill MARKETS: Bond Yields Close Above 6 Wednesday, June 9, 1999 Jn 11,500 DSL for i month. A $339 Value Installation. A $425 Value I Small Accounts I Unlimited IP From $59 I Los Angeles Times Securities and Exchange Commission Chairman Arthur Levitt criticized online ads in a speech last month, saying some of them present stock investing as an opportunity for quick riches with no risk involved. Levitt singled out an Ameritrade ad in which a woman cuts short a jog with a friend to rush home and trade stocks. The new ads will be "exemplary" in meeting regulatory standards and in portraying investment risk accurately, Lewis said.

Ameritrade had originally planned to spend $100 million on Please see SAWY.C6 as Dow Dips William T. Lloyd, a bond market strategist at Barclay's Capital Group in New During the same period, the Dow has gained 14, although it is down a bit from its May 13 peak of 11,107.19. If investors see stocks as overpriced, they could flee for the safety and high rates of Treasuries, he said. The dollar fell against the yen for a second day on statements by Japanese officials that Japan's economy appears to be improving. In New York, it rose to 118.93 yen, from 118.88 on Tuesday.

The euro, meanwhile, was little changed at $1.0465. The European common currency had surged more than 1 on Tuesday because of a strong economic growth report from Germany. European officials have tried to talk the euro upward this week, after the currency hit $1.0258 on Monday its lowest level since its introduction in January. Among Wednesday's highlights: Manhattan Beach-based Skechers USA (ticker: SKX), which was priced at $11, skidded to $10.63 in its debut. The shoe company's initial public offering continued a trend of flat IPOs from companies not tied to the Internet.

Other less-than-spectacular IPOs included Irvine-based Litronic (LTNX), which rose 13 cents to $11.13. GBC Bancorp, the Los Angeles-based holding company for General Bank, rose 31 cents to $18.06 on a jump in trading volume despite an absence of major news. More than 200,000 shares changed hands, compared with an average of fewer than 5,000 in recent days. Pfizer sank $6.06 to $104.94 after the Food and Drug Administration restricted the use of its antibiotic Trovan. Market Roundup, CIO Color Networks Inc.

i 11,200 j1U0 Il'l; IjlJ1 I I -V 10.600 i -H 'l 1C500 'I 10.400 i i 10,300 10,100 Jones High I 10,871.30 1 1 wm aaa Ffmh 1 i i i 9700 I -4 -HH woo I 9,500 1 i I 9,400 i WOO i 9.20 --J 9,000 26 3 10 17 24 31 7 1400 "TNew York Volume I 685.98 million shares l'200 ,1. IIL.IIIIillliiiii. ih iili 800 Jliil How fast can wo got 1 1 Tat-Vv 1 i information into a customer's hands? -I'H Continued from CI Interest rates still face upward pressure as the economy surges and inflation picks up. The Federal Reserve is likely to raise the short-term rates it controls when committee members meet at the end of the month, market watchers said. Experts believe the bond market has already "priced in" at least one 0.25-percentage point Fed rate hike this month, with a hike in August also a strong possibility.

Those expectations will be affected by several upcoming economic indicators, particularly the consumer price index for May, to be released next week. At some point, analysts said, rising interest rates could cause the stock market to tumble dramatically. What makes Wall Street nervous is that nobody knows where that point is. The long bond closed with a yield of 6.02 on Wednesday, the highest since May 1998. "As long as corporate earnings are reasonably strong, we could tolerate 6.25," said Robert W.

Bissell, chief investment officer at Wells Capital Management in Los Angeles. But weakening profits combined with rising bond yields would be harder to tolerate, he said. For bond market players, Wednesday's close above 6 was not a major event because earlier-issued 30-year T-bonds have been trading at yields above 6.25, noted William H. Gross, chief executive of bond specialist Pacific Investment Management Co. in Newport Beach.

The benchmark bond is the "on-the-run," or most recently issued, one. Investors will pay more for it and its yield, which moves in the opposite direction from price, will be lower because it is more liquid or easily traded than older issues. Clrt Cufrvaq Uxnpuiw uxpuaUcn. Au iigr ii.iin. 1 'tttervM AB rwmti Floor volume.

Figure In Market Roundup includes other exchanges and after-hours trades from previous day. Theoretical, based on day's high (and low) for all index members. Actual in Market Roundup. Try it yourself. 1 -080-FAX-4-YOU With Fax on Demand you can get 247 customer, 1 sales or tech support at a 9 to 5 price.

Just call and we'll fax you all the information. It's easy, quick and automatic. Just like our service. Los Angeles Times down to the 2 range or keep rising to 3 or more. With most of the globe still experiencing eco- nomic weakness, Gross said the former scenario is more likely.

Even if yields do back off a bit, they still represent a significant danger to the stock market, experts said. In less than five months, the yield on the 30-year bond has leaped nearly a full percentage point, from 5.09 on Jan. 29, noted To gauge inflation expectations, Gross looks to the new inflation-protected T-bonds, now yielding about 3.90. That is 2.35 percentage points lower than what off-the-run 30-year bonds are yielding, he said. That means investors are expecting annual inflation of about 2.35, which would represent a sizable upturn, Gross said.

The key for the markets during the next few months is whether those expectations settle back GoeAnflclee (Times' fax services; 1-800-LATIMES, 70750, trii- iTi lialiUji 'i nVirt iiCMfci jriv.ni" Ma. i awairarBiiaMUBlttaMaaaMMilBnsai 1 die KaOmrdiits ui rtxarittj UiiCertia'KS ot itaxf fttttwcuve companies (01.