Venturers' Corner
The firmness of shipping freights after their recent big rise is very impressive, especially when commodity prices, with which they are usually fairly closely linked, have tumbled. Like every other group of shares, however, shipping issues have fallen and at today's levels there is scope for the bold buyer. The Jos. shares of London-American Maritime Trading are an interesting speculation at 21s. Last year's dividend was 15 per cent., so that there is a yield of over 7 per cent., which provides a useful peg for the prices of the shares. London- American Maritime is a holding company deriving its income from the Thompson Shipping, which operates four steamers of 31,180 tons deadweight chiefly on the River Plate route.
Even in the worst phase of the depression Thompson Ship- ping was able to avoid losses and to keep its ships employed, and for the year ended July 3 ist, 1937, it earned a net profit of £54,976. The important point is that only £11,515 was distributed out of this amount as dividend payable to the parent company, the balance being placed to, reserves. Even this conservative distribution, however, was sufficient to cover the 15 per cent. dividend on London-American Maritime Jos. shares, so that the real earnings were over 70 per cent. I can understand that after a long spell of depression the board will wish to handle the earnings of the operating company conserva- tively, but in view of the level of current earnings an increase [Readers' enquiries, or requests for advice, regarding particular shares will be answered periodically in print or by letter. Corre- spondents who do not desire their names to appear should append initials or a pseudonym to their questions.]
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