Ex-tire maker B.F. Goodrich finds the road a bit bumpy

Answering the mail

November 20, 1991|By Andrew Leckey

Q. What are your thoughts on my 83 shares of B.F. Goodrich? Should I continue to hold? I've always liked its tires.

A.This company isn't rolling along in quite the way you think it is.

Hold your shares of B.F. Goodrich (around $41, NYSE), a resins, specialty chemicals and aerospace products manufacturer which no longer makes the automotive tires that bear its famous name, advised Jerry Herman, analyst with Kemper Securities Group.

The company is the largest worldwide maker of polyvinyl chloride, which is facing a lot of price pressure from other competitors.

"There's no compelling reason to sell or buy more Goodrich shares at this time," said Herman. "The positives are its long-term plan that took it out of the tire business and also its clean balance sheet, while the negatives are continued plastics pricing pressure and a sluggish economy."

Q. I was so excited with Dayton Hudson when it purchased Marshall Field & Co. that I bought shares in the company. Now the stock has been sliding. What do you recommend that I do?

A. Don't expect much excitement until the nation's cash registers are jingling again.

Hold onto your shares of Dayton Hudson (around $63 a share, New York Stock Exchange), the quality operator of department stores and discount stores, even though its stock has suffered from the stark realization that 1992 won't be a booming economic year, said Marsha Rale, analyst with Dain Bosworth Inc.

Slow recovery from recession will hurt not only Dayton Hudson, but most other retailers as well. Rale expects its stock to perform about in line with the overall stock market.

"I recommend that you hold your shares because fundamentals for an economic rebound are in place and Dayton Hudson, especially its Target discount stores, should eventually do well," said Rale, noting that Target is gearing up to enter the southeastern United States. "Target sales were up 10 percent last year and its sales of $8 billion represent half of the parent company's bottom line."

Q. I've been told that it's now time to buy retailing stocks. I was considering K mart, but since the economy isn't improving, should I hold off on this one?

A. Buy shares of discount department store K mart (around $44, NYSE) because its long-term revitalization program will provide it with a bigger payoff than most retailers will experience, said Daniel Barry, analyst with Kidder, Peabody & Co.

The company is in the process of spending several billion dollars to update stores, reduce the number of items on shelves and cut prices to better compete with rival Wal-Mart Stores.

"The company, once the cyclical rebound takes place, has solid potential for profit," said Barry. "Anticipating weak Christmas sales, K mart is also planning special promotions, such as teaming up with Walt Disney Co. to offer trips to theme parks and offering other prizes which must be claimed at the store."

Q. I recently found an old stock certificate for 175 shares of the Mount Vernon Co. Is this find worth getting excited about?

A. Unfortunately, no. The Mount Vernon Co., incorporated in Ohio in 1906 with main offices in Cleveland, was dissolved as a corporation in 1977.

According to Robert Fisher, vice president with the New York-based R.M. Smythe & Co. stock-search firm, your shares are worthless.

Q. We own a small business and want the company to pay for our condominium, in which we conduct business. Is this possible?

A. If you have a particular room or rooms in your condominium used exclusively for business, you can allocate a portion of your total condominium expenses as business expenses, said Matthew Kessler, tax partner with Grant Thornton.

"For example, if you have a five-room condo and about 20 percent of its square footage is devoted exclusively to the business, you can deduct 20 percent of the expenses on your return," explained Kessler.

Q. What can you tell me about a stock called Deprenyl Animal Health?

A. If you can handle the risks associated with an emerging growth company, Deprenyl Animal Health (around $9, over the counter) offers potential, said Richard Wholey of Chicago-based Wayne Hummer & Co.

The company, which develops veterinary care products, is seeking approval to market its drug Anipryl for treatment of degenerative diseases in pets. Independent tests by the University of Toronto have found that the drug retards aging symptoms in dogs. The same drug, under the name Eldepryl, is used in the treatment of Parkinson's disease in humans.

"The approval process could take several years, but might be worth the wait for adventuresome investors," said Wholey, pointing out that some analysts estimate the potential market for Anipryl at $200 million to $400 million annually."

Q. I own 500 shares of Sunshine Mining. With all of its problems, will the company be able to survive?

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