INVESTMENT NOTES
By CUSTOS Fr HE stock markets became much more interest- ". ing this week. Discrimination reappeared— after the first mad rush to buy. A welcome feature was the rise in the gilt-edged market—with War Loan touching 68 to yield 5% per cent. The equity markets, after some profit-taking, have resumed their rise and it is clear that several of the steel shares, with earnings yields of over 20 per cent., are still considered cheap and marked for higher levels. The steel market,. however, was temporarily upset by the unexpected announcement of a £14 million 'rights' issue by STEWARTS AND LLOYDS (not a popular share at the moment), and by the early prospect of 'the huge denationalisation' issue of RICHARD THOMAS AND BALDWIN. On bad days select steel shares should still be bought and I suggest again COLVILLES, which have risen to 56s. 9d. to yield 4.5 per cent. on dividends and 22 per cent. on earnings.
Associated Television One of the most spectacular rises in the post- election boom has been seen in the shares of ASSOCIATED TELEVISION 'A.' The week before polling they were languishing at around 60s. and now they are quoted at 80s. 6d. They are still reasonably priced to yield 6.1 per cent. on the 100 per cent, dividend which was last covered nearly twice on earnings. The company's licence as a television programme contractor runs up to July, 1964, and quite apart from this lucrative field (Midlands from Monday to Friday and London on Saturdays and 'Sundays) it is developing com- mercial television in Australia and other parts of the Commonwealth. It has also a 50 per cent. interest in the Independent Television Corporation of America, one of the leading distribution and production companies for television in the Western hemisphere. One of the features of the television industry is the increasing popularity of piped television in cities where licences can be obtained from the local authorities. BRITISH RELAY WIRELESS has been the, pioneer in this field an its 5s. shares are now quoted at 25s. 3d. to yiel just over 24 per cent. (equivalent to nearly 40s before the recent bonus). Associated Televisio, has 268,000 shares of BRW (purchased at 20s.) and in addition holds convertible loan stock which will give it 670,000 more shares. The total valuf of this investment is now in excess of £2 millio If subscription or toll television ever comes int force there will be a, big increase in piped televi sion. Competition is increasing, but BRW expected to hold its own against its rival REDID FUSION. On the whole ATV 'A,' because of itt high yield, seems to be the best way of investini in the television field.
United Molasses
The search for yield brings the investor to somt unlikely quarters. The chairman of UNITE() MOLASSES has warned his shareholders that tht earnings of the company will probably be lows in 1959 than in 1958. The slump in tanker freight' has knocked the profit out of its carriage 6 molasses and made unprofitable the employmen of its ships elsewhere. But in spite of all the adverse factors there is something to be said ft buying and putting the shares away. The dema for molasses for animal foodstuffs is increaser .and will receive a spurt from the dry summer ant lack of grass. And the cash which the compan, had accumulated for the abortive takeover 0 VITAMINS has been invested, I hear, in sour' industrial equities which have appreciated sharply At December 31 last the company had cash, to reserve certificates and short loans amounting £6.4 million and British Government stocks an quoted securities amounting to over £74 million United Molasses could become an industrial hold ing company if the present investment policy extended. The directors have said that unless the(( is some unforeseen emergency they will contint0 to pay dividends at the present rate of 15 per cent'
tax free, even if it meant drawing on the profit and loss account. At the present price of 42s. 9d. t le shares return a yield of 5.6 per cent., which is something to live on while the future of the com- pany is being reshaped.
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