Venturers' Corner Few shares are able nowadays to stand up
to the announce- ment that additional capital is to be raised, however attractive the issue terms may be. The jobber's reaction, which I admit is usually correct, is that such announcements give speculative holders their selling cue, while genuine shareholders find it as much as they can shoulder to take up their additional shares. It is in circumstances such as these that oppor- tunities often occur for the vigilant speculator to watch for the fall in price and pick up shares for a moderate recovery ;After the new issue has been digested. A case in point may think, be provided just now by the 2s. shares of R. B. Pullin and Co., the scientific instrument makers. A month ago these shares stood at 6s. 6d., at which they offered the reasonable return of nearly 8 per cent. on the 25 per cent. rate of dividend. Today, following the issue of 300,000 new shares
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FINANCE AND INVESTMENT (Continued from page 196) at 4s. each, in the proportion of three for every seven held, the quotation has been lowered to 5s. rid.
This seems to me to provide an attractive jumping off point for the speculatively-inclined. The new money is required to finance factory extensions for expanding business, and at 100 per cent. premium the shares have obviously been issued on terms which are economical to the company as well as attractive to the shareholders. For the year ended October 31st, net profits, after taxation, rose from £21,089 to £28,398 ; the latter figure represents earnings of over 46 per cent. On the assumption that the new money is fruitful, which should certainly prove to be the case—the company's products include automatic controls for aeroplanes and flying boats—this rate of earnings should be fully maintained. On the last rate of dividend of 25 per cent., which was only just over one-half of the available earnings, the yield at 5s. 'id. is nearly tio per cent. There should be scope for a modest rise from this level.
CUSTOS.
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