Jacobs ahoy!
John Bull
I am glad to see that even in the current jittery state of the market that there are still opportunities available for the speculator. Two of my recent recommendations, for instance, Burgess Products and De Beers have been better-than-average performers.
As a sector, however, one of the better areas of the market is shipping. In fact, in December last the FT shipping index touched a new peak and though it has fallen back since then the Index now at 466 compares with 420 a year ago. Now one reason for this has been the improvement in freight rates, with the Chamber of Commerce index near a two-year peak.
This is why I am expecting a favourable reception to the results of John I. Jacobs. This company is a shipowner, tankship broker and manager. Over the last five years it has had an excellent record with profits rising from 094,000 to £1.4m.
For the current period the interim statement was relatively sanguine even though freight rates were weak in this initial period. The board mentioned plans to expand the shipowning side of the business through acquisition and said that profits of the broking departments closely approximated those of the previous year and continued to benefit from forward business arranged.
At 92p against a 1973 high of 108p the shares leave something to go for.
Again in conclusion I must add something about my share of the year, Thomas Firth and John Brown. The battle for this company has been joined by Richard Johnson and Nephew, and Firth's board has accepted the offer. However, I feel that shareholders should reject this bid and that from Dunford and Elliott, in view of the bright prospects for Firth. Also its asset backing is way above the RJN offer price of 290p. So even after the rise since the beginning of the year the thing to do at this stage is hold on.
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