This Bud's for you: Anheuser-Busch Cos. a smart investment

Answering the mail

October 30, 1991|By Andrew Leckey | Andrew Leckey,1991 Tribune Media Services, Inc.

Q. What are your thoughts on Anheuser-Busch? It continues to do well. Will this luck continue?

A. This investment's for you.

Stock of Anheuser-Busch Cos. (around $53 a share, New York Stock Exchange) is worth buying because this is a high quality firm that has made some smart diversification moves, said George Thompson, analyst with Prudential Securities.

The nation's largest brewer is best-known for brands such as Budweiser, Michelob and Natural Light, as well as its Eagle snacks. It has the product and marketing know-how to come up with new winners as well.

"Bud Dry, launched in 1990 and backed by a strong marketing campaign, has been very popular and is already contributing 3 percent of the company's entire beer sales," noted Thompson. "For a quality investment, I think Anheuser-Busch is a fine stock choice."

Q. I thought it would be a good time to buy 35 shares of Abbott Laboratories. Is this as good an investment as some people say it is?

A. Buy shares of Abbott Laboratories (around $56, NYSE), the diversified health-care products firm, because it is a premier quality investment, advised David Lothson, analyst with PaineWebber Inc.

Its fine earnings potential is due largely to its generic drug business and the high profit margins in that field. The company will profit handily from a large number of patents soon to expire on some major name-brand drugs.

"Abbott Laboratories is a blue-chip company that has been consistent in boosting its dividend," said Lothson, noting that the stock price has increased more than sixfold in the past decade. "We expect all the positive news to continue for this company in the long run."

Q. I have held on to my shares of Aetna in hopes of some sort of rebound. Is this possible, or should I sell?

A. Hope springs eternal. In this case, the hope may be justified.

Hold your shares, for the worst appears to be over for Aetna Life & Casualty (around $38, NYSE), the multi-line insurance company whose stock has taken a beating, said Daniel Murray, analyst with Argus Research Corp.

The company has attempted to improve its businesses. For example, it has reduced exposure to areas with greater problems, such as car insurance and workmen's compensation, while focusing successfully on its health care insurance line.

"It will take Aetna awhile to recoup from its bad loan, which it has already written down, and to focus on more profitable parts of its business," said Murray. "In the meantime, there's no pressing reason to sell."

Q. Could you offer any information on my old stock certificate for 200 shares of American Hydrocarbon Corp.? Does this stock have any value?

A. While there still are plenty of hydrocarbons around these days, the company isn't around. Last market for the shares of Dallas-based American Hydrocarbon Corp. was in 1985.

The company remained inactive for two years and its charter then was canceled and declared inoperative due to non-payment of taxes, according to Robert Fisher, vice president with the New York-based R.M. Smythe & Co. stock-search firm.

As a result, your 200 shares have no value.

Q. I am in desperate need of money and am selling a lot of my stocks. Is there a way to minimize my capital gains?

A. The most important step is checking whether there are any stock losses or investments that have lost value, said James Schlesser, tax partner with Deloitte & Touche. Dispose of them in order to offset gains, he advised.

"However, any gains from stock sales are unavoidable and will be taxed," said Schlesser. "I suggest that you explore borrowing against the stock to meet your cash needs, so you don't incur so much capital gains tax at one time."

Andrew Leckey answers questions only through his column. Address inquiries to Andrew Leckey, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611.

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