Subject: Veteran Seth Glickenhaus Is Still Picking Out Stocks That Other Investors Prefer to Shun 
Date: Published: 8/19/94 (97 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Heard on the Street:
    Veteran Seth Glickenhaus Is Still Picking Out
    Stocks That Other Investors Prefer to Shun
    ----
    By John R. Dorfman
    Staff Reporter of The Wall Street Journal

    Seth Glickenhaus, an 80-year-old New York money manager, has one
 of the best stock-picking records around.
    Among 459 money managers ranked by CDA Investment Technologies
 for the three years ended June 30, Glickenhaus & Co. ranks first in
 estimated stock-picking results, with a compound annual return for
 the period of 31%.  The firm is also among the leaders for the most
 recent five years.  Among its hits have been Chrysler, Travelers
 (formerly Primerica) and Federal National Mortgage Association.
    "We like to find things that are out of favor," says Mr. 
 Glickenhaus, the firm's chief investment officer.  "We don't play
 musical chairs with something that's been in favor," even though the
 stock may still go higher.  "If we didn't catch it early on, we're
 not interested."
    These days, two of Mr. Glickenhaus's three favorite stocks,
 Chrysler and Countrywide Credit Industries, are slightly
 out-of-favor largely because of this year's rise in interest rates.
 The third, ICN Pharmaceuticals, is a highly controversial stock
 scorned by many money managers.
    Chrysler roared from 10 in 1991 to 63 1/2 early this year, with
 Mr. Glickenhaus along for much of the ride.  Yesterday it slipped 1
 1/8 to 47 1/4, just six times the past 12 months' earnings.
    The low price/earnings ratio suggests that many investors doubt
 Chrysler can keep up its recent success.  "People don't appreciate
 that this is the premier auto company in the world today in many
 respects," Mr. Glickenhaus says.
    He praises Chrysler's low production costs, its ability to bring
 out new models in just two and a half years, the roomy design of its
 LH cars, and the popularity of its Jeeps, minivans and Neons.  What's
 more, Chrysler's "debt is down to about 19% of capital, and by the
 end of this year they should eliminate the big criticism about their
 unfunded pension liability," he says.
    Sure, the car companies have had "two years of very good
 business," Mr. Glickenhaus says.  But he figures that's no reason to
 bail out:  "Auto cycles are generally five-year cycles."
    Countrywide Credit, a Pasadena, Calif., mortgage company, is Mr. 
 Glickenhaus's second favorite.  The stock is way down this year,
 having fallen from a 52-week high of 23 1/4 to close yesterday at 14
 1/4, as mortgage refinancings have dried up with rising interest
 rates.
    Countrywide's weak showing is one reason Glickenhaus & Co. has
 only a middle-of-the-pack stock-picking performance for the past 12
 months, up 1.4% by CDA's estimate.  But Mr. Glickenhaus argues that
 Countrywide stock is an even better bargain, now that it's
 languishing at a mere eight times earnings.  "I've broken 22 lances"
 defending Countrywide's merits, he says.  "People think, this poor
 man, he's so misguided."
    Mr. Glickenhaus says he thinks the worst of the interest-rate
 shocks are past.  And he notes that Countrywide not only originates
 mortgages but has a huge mortgage-servicing business that should be
 relatively steady.
    He praises David Loeb and Angelo Mozilo, the firm's top
 executives.  He quips that Mr. Mozilo started "with a great advantage
 -- he was the son of a Bronx butcher."  Their achievement in bringing
 Countrywide into the big leagues of mortgage finance, he says, is
 "with the possible exception of William Gates of Microsoft, the
 greatest achievement of our financial world -- totally unrecognized
 and unrewarded."
    Mr. Glickenhaus's third-favorite stock is his most controversial.
 It's ICN Pharmaceuticals, a Costa Mesa, Calif., drug company.  ICN
 has reported losses of late.  Its chairman, Milan Panic, has been
 heavily involved in politics in war-torn Yugoslavia.  And the company
 has been heavily criticized going back to the mid-1980s for
 excessively bullish comments about the promise of its drugs in
 treating viral illnesses such as AIDS.  
    Mr. Glickenhaus says that Mr. Panic is "dictatorial beyond
 belief, volatile, and hyperbolic," as well as overpaid.
 Nevertheless, Mr. Glickenhaus says he believes one of ICN's drugs
 will prove highly useful in treating symptoms of Hepatitis C, a
 strain of hepatitis that affects millions of people world-wide.  In
 addition, he says Mr. Panic's strategy of "building up outlets for
 drug distribution in the iron curtain countries and in Russia
 proper" is a wise long-term strategy.
    According to Technimetrics, other big Glickenhaus holdings as of
 March 31 included Chase Manhattan ($51 million), Eastman Chemical
 ($51 million), Chicago & Northwestern Transportation ($47 million),
 Travelers ($46 million), Tenneco ($39 million), National Medical
 Enterprises ($37 million), and LTV ($36 million).
    Mr. Glickenhaus doesn't deny that some of his holdings, such as
 ICN, are controversial.  But he argues that "the real bargains in the
 market by definition have to be controversial.  You do best where
 there are people who doubt what you've discovered."

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