Venturers' Corner
After their sharp rise in early March home railway stocks have come in for a good deal of profit-taking in the last few days and prices have fallen well below their recent " highs."
I see that L.M.S. First Preference, for example, which were
59 a fortnight ago, are back to 49 in spite of the steady improvment in traffics. Obviously, the fortunes of the L.M.S. are closely dependent on the general level of business activity, and that, in turn, cannot be dissociated from the course of political events. One feels, all the same, that unless the political situation is going to get very much worse—and those who take this view should not even consider specula- tive investment—business in this country is likely to get a little better this year. Already, there are signs of a turn in such industries as tinplate, steel, and cotton, and recovery on a modest scale is finding reflection in railway traffics. Last year L.M.S. just earned the full 4 per cent. on its First Pre- ference, and I shall be disappointed if, with the benefit of economies in expenditure, it is not able to maintain its net revenue in 1939. On that assumption the First Preference, at 49, is offering a yield of just over 8 per cent. The stock is a speculation, but it looks to me as good a one as any in the markets.
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