Several major flops hurt Paramount Communications stock

Leckey Q&A

June 12, 1991|By Andrew Leckey | Andrew Leckey,Tribune Media Services

Q. What are your thoughts on Paramount Communications? After so many changes taking place,is it time to look at this investment?

A. This famous film company needs more low-budget blockbusters such as its surprise hit "Ghost" and fewer big-budget disappointments like its much-hyped "Days of Thunder."

Take a wait-and-see attitude toward the stock of Paramount Communications (around $40, NYSE) because its entertainment division has suffered several major flops, cautioned Mark Manson, analyst with Donaldson, Lufkin & Jenrette.

At the same time, the company is adapting to a revamped management team. Brandon Tartikoff, formerly at the helm of NBC, is new head of its Paramount Pictures subsidiary. Stanley Jaffee became the president of the parent company.

" It hasn't been long since the changes took place,and there remains a large risk factor until management and production teams get properly organized for long-term projects," observed Manson." Though Paramount has a nice cash reserve and minimal debt,any more flops could damage earnings significantly."

Q. I am thinking of buying shares of Baxter International, but don't realy know how good an investment it is.I am an employee of the company.

A. This stock should improve the financial health of any investor.

Buy shares of Baxter International (around $35 a share, New York Stock Exchange), the medical and hospital-supply firm, because is an attractive investment in a company with strong domestic and overseas sales, said David Lothson, analyst with PaineWebber Inc.

Profits are up significantly at this firm which distributes more than 120,000 health-care products.Last year plant closings and restructuring cast have resulted in a more streamlined and efficient firm.

" Should the economy continue into a prolonged,recession,Baxter would be ready," said Lothson. " And if the recession ends sooner,it is still a good investment."

Q. My wife and I have owned Xerox Corp. stock since the early 1980s when the price was always up and up. Should we continue to hold or move on to something else?

A. It should be able to duplicate past successes. Hold your shares of Xerox Corp. (around $58, NYSE), for the leading U.S. maker of copiers and duplicators is still benefiting from the many positive changes which occurred at the time you first bought your stock, said Alex Henderson, analyst with Prudential Securities.

. At that time, Xerox was eliminating many suppliers and moving into the financial services business. Its stock price benefited from those moves.

" Nowadays Xerox is busy enhancing its current market share and sales as well as improving the bottom line at its Crum & Foster Inc. insurance business", said Henderson, noting its recently announced a plan to sell a portion of its reinsurance business.

" Xerox copier sales have suffered with the weak economy,but an improving economic picture will give them a boost

Q. I am holding 185 shares of Applied Devices. Is this Applied Devices Corp. Is this company still in existence and,if so,do my shares have any value

A. Applied Devices Corp.is still in existence,with offices at 2931 N. Poinciana Blvd.,Kissimmee, Fla.32741

While its stock is being offered in the over-the-counter at 4 cents,there are no bids for it, said Robert Fisher, vice president with the New York based R.M Smythe & Co. stock search firm

Q. My invalid mother, age 76, lives with me and is fully dependent on me.My neighbor told me that I can claim a deduction for this.Is she correct?

A. To be able to claim a personal exemption of $2,100 for your mother ,you must provide more than half of her care and maintenance,said Barbara Pope,tax partner with Price Waterhouse.

" In addition your mother's taxable gross income can't exceed more than $ 2,100, including her pension interest income and dividends," conluded Pope." Her Social Security benefits are not included."

Q. I believe I made a poor stock pick. Can you tell me the prospects for Allwaste?

A. Due to the cost of exiting the asbestos-removal business and the effects of the weak economy, the stock of Allwaste Inc. (around $5, over the counter) was hammered.

This company, which handles industrial waste, transportation services and recycling, also provides tank-cleaning services.

" At the current low price,All waste stock looks like a good long-term play on the fast-growing waste industry," said Richard Wholey of Chicago-based Wayne Hummer & Co., who suggests that you buy more shares in order to lower the average cost of your Allwaste holdings .

" Then sit back and wait for rising demand and tougher regulations to boost the industry and Allwaste profits."

Q. Back in February 1989, Anthony Industries was making a big splash.Today it is way down.What happened? Do I sell?

A. Anthony Industries (around $9, NYSE) features a sound balance sheet, a dividend yield of around 5 percent and a real opportunity for an aggressive investor with patience, said Sharon Conway, based in Chicago with A.G. Edwards & Sons Inc.

Anthony is a diversified manufacturer of leisure time products such as fishing tackle, snow skis, flotation vests, swimming pools and sportswear apparel.

It also makes industrial products.

"The weak economy has hurt all of Anthony's businesses, and a lack of snow in key markets has hurt its ski business the past several years," concluded Conway. " But restructuring moves such as cost-cutting,quality improvements to the longer-term bottomline."

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