The ballooning deficit and fickle economy may have refueled investor worry about the market. But to money manager F. Van Kasper, the 1990s are looking mighty upbeat, so he's bullish on the economy and the stock market. Despite the Dow industrials' anemic performance last year, second-tier stocks performed fairly well, outscoring the big-cap issues in the Dow and the S&P 500-stock index, Van Kasper points out. "And 1993 will be another winner for secondary stocks," he forecasts.
The chairman and president of Van Kasper & Co., a research-oriented San Francisco investment bank, is optimistic about the new Administration. "We're very encouraged by the many possibilities under a Clinton Administration, such as wider access to capital and a more organized effort at job creation," says Van Kasper. The over-the-counter stocks, he believes, have captured this particular mood, so he expects they will lead the market in the 1990s. "Don't look anymore to the blue chips for leadership--the real market has switched over to NASDAQ."
TELESCOPES AND SKATES. Each year, Van Kasper picks his favorite 15 stocks. Last year's picks gained a neat 18% vs. 4% for the Dow industrials. Here's the cream of his 1993 list:
Natural Wonders is the operator of 80 mall-based stores that sell nature- and science-related items, such as telescopes, maps, and minerals. Van Kasper sees profits jumping to 75 a share in 1993 from 1992's 42 , and to $1.10 in 1994. The stock, which has risen to 22 from 14 in mid-December, should hit 30 in a year, he says.
Quidel, whose one-step, one-minute Conceive pregnancy test received marketing clearance from the Food & Drug Administration on Jan. 6, has also developed a fertility test called Safeplan and an ovulation confirmation test called Phasecheck. These products should get approval in Europe and the U. S. in six months, says Van Kasper. He expects earnings of 10 in 1993 and 17 in 1994, vs. 1992's 5 . He sees the stock, now at 4 3/4, topping 9 in 1993.
First Team Sports, the second-largest maker of in-line skates (after Rollerblade Inc.), accounts for 20% of the market. A marketing pact with a European ski-equipment maker and an endorsement contract with hockey star Wayne Gretzky and ice-skating champion Katarina Witt should help the company grow 25% annually over the next few years, Van Kasper believes. He sees the stock, now at 12, shooting up to 20 over the next 12 months.
ILC Technology, whose high-intensity CERMAX lamps are used for illumination in endoscopic surgery, will become a leader in this specialized miniature-lighting business, he says. Now at 12, he expects the stock to double.
GENE G. MARCIAL