BUSINESS The Sun WEDNESDAY, August 23. 1989 B7 Stocks; Restaurants a meal ticket Plant: Scripto-Tokai sparks hopes for Fontana Continued fromB10 though some may grow as much as 70 percent. And with the economic outlook muddled and most predictions for corporate profit growth in 1990 ranging around 5 percent to 7 percent, restaurant stocks are a solid investment, he says. Low cash-flow multiples. Lip-ton's best bets sell at roughly three times estimated 1990 cash flow. But they should sell at seven to eight times cash flow, he says. Low earnings multiples. Lipton argues that with predictable earnings and cash flows, restaurant stocks warrant price-earnings multiples greater than that of the general market. Yet most, he says, are selling at about 13 times 1989 earnings, equal to the average of S&P 500 companies. Here's Lipton's assessment of his top picks, with their recent prices and 12- to 18-month targets in parentheses. TPI Enterprises, $5 ($10). TPI. which operates Shoney's family restaurants, is selling at only about three times its $1.50 a share of cash flow a cheap price for this attractive takeover candidate. Showbiz Pizza Time, $11 ' ($22). It has rebounded strongly from its problems of a few years ago. It too sells at a mere three times its 1990 estimated cash flow of $3.50 to $3.75 a share. Max & Ermas, $7 ($15-$20). Earnings at this family restaurant chain are growing at a phenomenal rate of more than 50 percent a year. Lipton sees earnings of 35 cents a share in 1989, and 55 cents to 60 cents in 1990. The balance sheet is very strong, and insiders own about 55 percent. So management, which works for modest salaries, has a strong incentive for ensuring the company's success. Sbarro, $22 ($30). This Italian restaurant chain has predictable growth with a fine record and a debt-free balance sheet. Earnings and revenues have been growing 35 percent to 40 percent a year. Lipton predicts earnings of $1.40 a share in 1990, up from about $1.05 in 1989. Dan Dorfman's assistant, Susan Jasper, contributed to this article. Continued fromB10 expedite companies' development plans through the various city departments, said Mayor Nat Simon. Scripto-Tokai, a North American affiliate of the world's No. 1 maker of disposable plastic butane lighters, officially will open its combined corporate headquarters, manufacturing plant and distribution center with a half-day celebration Thursday. "It's going to be quite an event," said Steinbaugh, who heads Fontana's economic development department. "This is the first corporate office we have had locate in Fontana." Scripto-Tokai, a subsidiary of the Tokai Corp. of Yokohama, Japan, will observe the event with touches of the homeland. After opening comments and a ribbon cutting at the 256,000-square-foot facility, a traditional Japanese Shinto religious ceremony will be observed, followed by a tree plan-ting symbolizing growth and prosperity. Officials and guests will be transported to the Red Lion Inn in Ontario where Tomio Nitta, Tokai's president and chief executive officer, will speak, followed by the breaking of a sake barrel. A demonstration of traditional Japanese drums also will be staged. In addition to disposable butane lighters, Scripto-Tokai manufactures and sells ballpoint pens, mechanical pencils and disposable barbecue torches. Its Fontana workforce numbers about 300. The Milford, Conn.-based BIC Corp. is the nation's top manufac turer of plastic disposable lighters, w ith 1988 sales of $295 million. Scripto-Tokai is runner-up, and its sales figures aren't disclosed because its parent company is privately held. Almost three years ago, Scripto-Tokai moved its corporate offices from Atlanta to Kancho Cu-camonga because the Inland Empire was one of the fastest growing commercial areas in Southern California. At that time, the company had a disposable-lighter factory in Kancho Cuca-monga. Scripto-Tokai planned to add a $30 million pen and pencil factory in Kancho Cucamonga, but company officials scotched those plans, citing space problems. Instead, the company moved a few miles south to a 12-acre site in Fontana's Southwest Industrial Park earlier this year. It pur chased a new building from Ellis Sloan Burnett Properties of Santa Monica for an undisclosed amount, then put in offices and production facilities. The North American corporate offices include Seripto-To-kai's sales and marketing departments and a sister firm, Anja Engineering, formerly located in Monrovia. W hen it begins operation Thursday, Scripto-Tokai will be Fontana's largest manufacturing employer and third largest non-manufacturing employer, said company spokesman Kick de Leon. "This is going to be a big plus for our city." said Simon, the mayor. "This is what we're looking for, to have people live here, work here and spend their money here." Simon said. Thrifts: Institutions pile up record losses in second quarter Billionaires: New entries Continued fromB10 ranked 125th on the list. Ranked fourth after the Mars family was the world's richest woman, Britain's Queen Elizabeth II. who is worth an estimated $10.9 billion compared with $8.7 billion last year, Fortune reported. Fifth on the list were New York-based publishing magnates Samuel I. Newhouse Jr. and Donald E. Newhouse, worth an estimated $10 billion. Wal-Mart Stores mogul Sam Moore Walton, of Bentonville, Ark., was seventh with $8.9 billion; the Reichmann brothers Albert. Paul and Ralph whose Ontario-based Olympia & York is the largest owner of New York City commercial real estate, are eighth with $8.4 billion; British real estate tycoon Gerald Grosve-nor is ninth with $6.9 billion; and Kenneth Roy Thomson, who controls Canada's Thomson Newspapers Ltd., was ranked No. 10 with estimated wealth of $6.9 billion. The list swelled to 157 members this year with the addition of 32 new members, while five fell off the ranking. Among other newcomers are Carl C. Icahn, the takeover strategist who also is chairman of Trans World Airlines Inc. and worth an estimated $1.2 billion; Turner Broadcasting System Chairman Ted Turner, $1.3 billion; Kirk Ker.'orian, helped by the sale this year of MGM-UA Communications Co.. $1.1 billion; and Ronald O. Perelman, chairman of Revlon Inc., $3.2 billion. Continued fromB10 closing insolvent institutions over the next 10 years. "You should not expect losses to go away" as a result of the Financial Institutions Reform, Recovery and Enforcement Act, Barth said. "I would not be surprised if, in the end, costs escalated." He added that despite the industry's problems, deposits at insured savings institutions remained safe. "If the Congress has proven one thing by the rescue legislation, it has proven that all in sured deposits are protected by the United States government," he said. Both the issues of higher rates and a recession loom as red flags for economists. From March 1988 through March 1989, the Federal Reserve Board pushed interest rates up in an attempt to halt a resurgence of inflation, and rates did not begin to come down until almost the end of June, in response to efforts by the central bank. Many, including some in the Bush administration, are now asking whether the Federal Reserve kept interest rates too high for too long, thus increasing the risk of a recession. Economists worry particularly that a recession, caused by the recently high interest rates, could be a big blow to the industry, sending real estate values down and forcing savings institutions to w rite down even more assets. The second-quarter deficit was a combination of writing off huge volumes of bad real estate ; loans and the fact that all saving's"" institutions had to pay high rales on deposits. . . f just" ' Wi 1 1 1 MONTH. Mil i ! l it fr : LI Miational mainienaiicp and r w wny Duy Doniea water rot a limited time, tne system is just $6.90 a month for 3 months, plus ' installation, uaii your Uumgan Man for details. 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