CABLE AND WIRELESS YIELD
One of the few speculative stocks which has managed to make real headway in recent weeks has been Cable and Wireless (Holding) ordinary, whose merits I have stressed on several occasions when the price was down below Llo. Even at to-day's level of £47 the yield of 81 per cent. does less than justice to the prospects, since it should now be apparent that, except in a full-sized business depression, earnings should continue to cover the 4 per cent. dividend. Lord Pender's review at the annual meeting on Wednesday and the facts about the operating company disclosed by Mr. Edward Wilshaw leave no room for doubt that the bold ex- periment in rate-reduction is stimulating traffics. As the two other sources of the holding company's income—its revenue from Marconi's Wireless Telegraph and from its large port- folio of investments—should be well maintained, total profit should hold up to the 1938 level.
Lord Pender was naturally at pains to avoid definite prophecy, but stockholders will be encouraged by his ex- pression of opinion that the 4 per cent. dividend will be repeated this year. At the same time I feel that they will be disappointed by his intimation that after next month the operating company will discontinue the publication of its monthly traffic index. This is surely a retrograde step, how- ever foolish may have been the deductions drawn by some commentators from the figures issued month by mouth. For my part, I have always regarded the index as a useful barometer of the revenue of the operating company and as nothing more. As a guide to gross receipts it has proved remarkably accurate.
Previous page
