Convertible Stocks
As a rule, convertible stocks do not greatly appeal to the private investor, who finds the mathematics of conversion awkward and the watching of the conversion dates tedious. But there are one or two simple cases which might interest him. HAWKER S1DDELEY is admittedly a speculative share, but at 32s. 3d., to yield 6.7 per cent, it is probably undervalued. Its 51 per cent convertible debenture can be bought at under 102, to give a running yield of 5.6 per cent, while the equivalent price for the ordinary at the next conversion date of July 31 is 29s. 91d. Thus the convertible is selling at a discount on the ordinary shares. There are not many convertibles selling on such attractive terms. But nl- RIFF CONVERSION 64 per cent convertible loan is quoted at around 117 to yield 5.3 per cent flat. The next conversion is not until September 30, 1965, at the equivalent price of 32s. 9d. The ordinary is presently quoted at 32s. 3d. to yield 2.2 per cent on dividends and nearly 10 per cent on earnings. BRITISH PRINTING 64 per cent con- vertible is quoted at 115 to yield 5.6 per cent flat. The next conversion date is October 1, 1964, at the equivalent ordinary price of 23s. against a present quote of 23s. 6d. to yield 4.6 per cent on dividends and 9.4 per cent on earnings. Finally, here is an election hedge. JOHN SUM- MERS 64 per cent convertible debentures can be bought at 1031 to yield over 6 per cent flat. The next conversion date is March 31, 1965, and the equivalent price for the ordinary is 39s. 6d. The present quote is 34s. 6d. to yield 8.7 per cent. If the Conservatives win, the price will be nearer 49s. 6d.: if Labour wins, the debenture price should be muclythe same.
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