Q. My wife and I own 1,500 shares of Waxman Industries. What are your thoughts regarding this investment?
A.One could wax eloquent about this stock's prospects.
Waxman Industries (around $3, NYSE), which assembles, packages and distributes plumbing, electrical, hardware and FTC security items for the do-it-yourself market, is a stock worth holding, said Sharon Conway, based in Chicago with A.G. Edwards & Sons Inc.
Earnings per share in its last fiscal year were down 13 percent due to a weak Canadian unit, acquisition costs and early repayment of debt.
"However, Waxman Industries management does not believe that the do-it-yourself market will be adversely affected in a recession or soft economy, since consumers will be more inclined to fix up present dwellings rather than move," said Conway. "The company is making cost-efficient moves, yet planning to open more warehouses to service customers better."
While Waxman shares are trading at the year's low, the dividend seems well-covered. If future earnings are positive, additional purchases of its stock should be considered by aggressive investors, Conway believes.
Q. I have five shares of British Type Investors Inc., purchased Oct. 21, 1929. Is the firm still alive, or should I frame the certificate for the family room?
A. Put etchings on the wall instead. Your stock, though its corporate history has been rather bumpy, has some value.
British Type Investors Inc., incorporated in Delaware in 1929, merged into Allied International Investing Corp. in 1956. At that time, each 20 shares were exchanged for one share of Allied International.
Allied changed its name to Dorsey Corp. in 1959, then to Constar International (around $15 a share, New York Stock Exchange) in 1987. Still in existence under that name, it is the largest U.S. plastic container manufacturer.
Its headquarters is in Chattanooga, Tenn., and its transfer agent is Harris Trust Co., 77 Water St., New York, N.Y. 10268.
Q. Because of their continual slide in price, is now a good time to invest in retail stocks such as J.C. Penney? Should I just stay away?
A. Unfortunately, this is not the year of the gung-ho consumer.
Stay away from the stock of J.C. Penney (around $42 a share, NYSE), for most retailers should underperform the market for a while, said Daniel Barry, analyst with Kidder, Peabody. There's a negative outlook for Christmas and the Middle East situation remains explosive, both factors having more to do with the overall industry than anything specifically to do with J.C. Penney, he said.
"The consumer doesn't appear to be in a shopping mood due to a number of fears that include recession, and Penney's September retail sales were down a bit," observed Barry. "The company will be forced to offer more sales and discounts, which will erode its profits even more."
Penney has a national presence, but a low level of sales per square foot. So it is upgrading merchandise, remodeling store displays and initiating new motivational programs for sales employees. All of which is good, but it will probably take time to show results.