Portfolio
Markets for ropes
Nephew Wilde
My local vicar is a man who does not hesitate to bring politics into the pulpit. He slams big business, the Concorde, and most forms of technical progress — for him change is synonymous with decay. So I was surprised to hear praise for the Prime Minister in his Easter message. Later I learnt that the cleric was a keen yachtsman and had seen Mr Heath in a new light after the launching of the latest version of 'Morning Cloud '. Unfortunately, as he had strayed from a pastoral theme so my mind wandered to the political influences on the stock market.
Now my stockbroker, Wotherspool's colleague, Graville-Jones, stood in the local county elections. When I spoke to him the other day after his victory (as a Tory) he criticised the Labour Party and emphasised the drastic effect on the stock market should they get into office. He seemed to disregard the fact that on historic precedent a Labour government by no means has heralded a bear market.
Graville-Jones was also considerably upset at my appraisal of the situation.
" I suppose that the present Department of Trade and Industry's sterner judgements on takeovers is the attempt to stop formation of more conglomerates. After all, it is so much easier for the next Labour government to nationalise if rationalisation of an industry has already been completed."
I thought this comment had made a score and Graville-Jones eagerly changed the conversation to more topical matters.
"Can I get you any prices now, the market will soon close," was his way of avoiding any political confrontation.
Actually I had been looking closely at Martin-Black, the wirerope manufacturer. It is particularly well placed for work in the North Sea and other off-shore exploration fields and has recently won some useful contracts. Also the coal mining industry is a big market for wire-rope manufacturers and here conditions seem to be looking up.
, The favourable trading conditions are well borne out by the latest results for 1972 which showed a second-half gain of 47 per cent and the directors say that the improvement has continued.
At the current level the shares are selling at only ten times earnings. Both British Ropes and Martin-Black appear to be set for much better things in the medium-term and the rating of my selection is much lower than that of the former company. Finally I have a high regard for the management and the particular attention being paid to the expanding North Sea business.
I am selling my very disappointing holding in Slater Walker Australia to finance this purchase.
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