Investment Notes
By CUSTOS
HE confident cheerfulness of Mr. Lloyd, the I sharp turn-round in the motor trade and the signs of a recovery in exports have confirmed me in my opinion that we are once more in 3 'bull' market for equity shares. The volume of business is increasing, indicating that the public is in a buying mood. The experts are, however, afraid that the prices of the safe investment shares (banks, insurance, investment trusts and property), which I have lately been recommend- ing, will be driven to unduly high levels. This week witnessed profit-taking in banks and insur- ance shares, but property shares continued on their upward path. It becomes all the more neces- sary, as I have urged in the last two weeks, for the investor to put some recovery shares in his portfolio.
Recovery Shares Last week I drew attention to TIMES FURNISH- ING and VENESTA—the last has recovered smartly —and this week I would mention PRESSED STEEL, whose recovery has a long way to go. The re- sults for the year to December 31 were much worse than the market expected, the loss being £3.6 million before a tax credit of £962,000. The dividend was cut from 30 per cent. to 5 per cent. The trouble has been the heavy loss in- curred through the long strike at Rootes. How- ever, trade in the first quarter of the current year is said to be on a profitable basis and the shares did not stay long below 16s. They are now 17s. 6d. to 18s. and are worth picking up in the market on a dull day.
Newspaper Shares The market in DAILY MIRROR seems to be hang- ing fire at around 12s. 6d. to yield 5.9 per cent. I expect there are a lot of stale 'bulls' and although a recovery in their magazines is under way, there is still the drag of the Daily Herald, which is losing over £700,000 a year. But it was significant that the pre-tax profits for the SUNDAY PICTORIAL rose by 15 per cent. and that the dividend was increased from 27k per cent. to 30 per cent., with a one-for-two scrip issue. The Sunday Pictorial is not so heavily invested In A. E. Reed and that perhaps explains its lower yield basis of 5+ per cent. at the present price of 27s. A revival of interest in ASSOCIATED NEW PAPERS at 33s. 9d. is the new feature in the market. This company has formed a property development company to develop inter alia the properties which it took over from the News Chronicle. It is also diversifying its interest by forming another subsidiary called Northcliffe Developments. There is always the chance of a take-over bid coming from Mr. Thomson in respect of the Daily Mail.
Jaeger Holdings
Women investors, should be attracted by JAEGER HOLDINGS, the leading producer of fashion cardigans, pullovers, underwear and swimsuits. The company did well in a bad year to increase its pre-tax profits by about 12{ per cent. to show earnings of 25} per cent. to cover the maintained dividend of 12 per cent. The company is benefiting from the boom In teenage clothes and should do well in the Euro- pean Common Market. Introduced at 13s. In February, 1961, the shares went as high as 21s. and have now dropped back to 15s., at which they yield 4 per cent. The shares have interesting possibilities quite apart from the chance Of higher earnings and dividends.
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