It isn't just candy that makes Hershey Foods sweet investment

Answering the Mail aFB

February 19, 1992|By Andrew Leckey

Q. I am interested in buying shares of Hershey Foods. I love its candy bars and think it's a great company. Do you agree, or is there something I don't know?

A. You needn't be a chocoholic to like this stock.

Buy shares of Hershey Foods (around $44 a share, New York Stock Exchange), famous manufacturer of chocolate, candy and pasta, because of its commanding presence in the candy and confection business with 55 brand name products, advised Roger Spencer, analyst with PaineWebber Inc.

Familiar to those with a sweet tooth are its Reese's Peanut Butter Cup, Hershey Kisses, Hershey Milk Chocolate Bar, the various Peter Paul bars, York Peppermint Patties and Mr. Goodbar.

"With solid management and a continued commitment to quality, I see no reason why the positive trends shouldn't continue," Mr. Spencer said. "The 22 percent gain in earnings per share in the recent fourth quarter was due to success in all divisions."

Q. I keep hearing nothing but bad news from the steel industry. I am therefore confused. Should I hold my shares of Inland Steel that I've had for some time, or should I use this opportunity to sell?

A. Steel yourself for better times.

Hold shares of Inland Steel Industries (around $23, NYSE), manufacturer of integrated steel, and wait for improved economic conditions, said J. Clarence Morrison, analyst with Prudential Securities.

Although the steel industry hasn't emerged from recession, it's in a good position to recoup once the situation improves, Mr. Morrison said. Low inventories at the customer and producer levels mean there will be a positive response when demand picks up.

"I like Inland because it is well along in its massive capital and technological infusion, which has cost plenty," he said. "Benefits will be reaped the next three years and beyond, with Inland able to produce a higher grade of product at lower costs."

Q. My wife and I own 76 shares of Snap-On Tools and were considering buying more. However, after more disappointing earnings news, I am reconsidering. What do you think?

A. Buy shares of Snap-On Tools (around $34, NYSE), maker of hand tools, because there are initial signs that the company's domestic dealer sales are picking up, said John Mirek, analyst with Kemper Securities Group.

Although last year's earnings results were disheartening, the investor should look deeper, he said. The company took a one-time charge for writing down a debt and a one-time charge for a retiree health care expense.

"Snap-On Tools lowered its down payment requirements for new franchisees from $30,000 to $15,000 and is beefing up its campaign to recruit qualified franchisees by offering financing," Mr. Mirek said. "Prospects will pick up as the recovery takes place."

Q. I recently found a stock certificate dated 1957 for 250 shares of Southern Union Oils Limited among old papers. I was wondering if the company still exists.

A. Southern Union Oils Limited is no longer in existence. The charter for that Toronto company was canceled in 1975, said Robert Fisher, vice president with the New York-based R.M. Smythe & Co. stock-search firm.

Southern Union, which had been around since 1952, was last listed in the Canadian Mines Handbook in its 1971-72 issue with the designation of idle with no property to report. Southern Union's last known address was 111 Jarvis St., Toronto, Canada.

Q. I just completed my first year of self-employment and recently received my IRS 1099 form. I would like to know how I go about reporting this money and how much I can expect to pay in taxes.

A. Report the amount of income on the IRS 1099 form on Schedule C of your 1040 form, said James Schlesser, tax partner with Deloitte & Touche.

Schedule C is a summary of income and expenses pertaining to self-employment.

On Schedule C, also list any expenses incurred during the year related to self-employment, such as mileage or supplies. Then the net income is reported on the front page of your 1040 on line 12.

"The IRS requires that you pay two types of taxes, your regular tax as computed from your tax tables and a self-employment tax," Mr. Schlesser said.

"The self-employment tax is 15.3 percent of your net income, and you can then calculate your regular tax."

Q. I am interested in Hillhaven Corp. on the American Stock Exchange. What do you see as the future for this company?

A. Hillhaven Corp. (around $3, American Stock Exchange), second-largest operator of nursing homes with 340 centers in 37 states, is worth buying as a low-priced speculative investment, said Richard Wholey of Chicago-based Wayne Hummer & Co.

It provides a full range of skilled and intermediate nursing care and specialized services such as care for Alzheimer's disease patients.

Q. I have 200 shares of Wells-Gardner Electronics that I bought in 1981. I wonder if it is worth my big loss to continue to hold on.

A. Since you're still aboard, hold shares of Wells-Gardner (around $5.50, AMEX), a designer and manufacturer of color video monitors, said Sharon Conway, based in Chicago with A.G. Edwards & Sons Inc.

"Though fourth-quarter results were still weak, the company's stock moved upward on speculation about its potential as a dominant monitor supplier to the growing state video lottery industry," Ms. Conway said. "Hold on and hope this stock hits the jackpot."

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