Share price not linked to value, a 10-cent stock can be expensive

The Ticker

August 02, 1996|By Julius Westheimer

New angles on "cheap" stocks, bank statements and "automatic" loan machines:

CHEAP IS CHEAP: Speaking of stocks, some people seem happier with 1,000 shares of a $1 stock than 10 shares of a $100 issue. But price is no indicator of value. Some $100 stocks are dirt cheap, some 10-cent stocks very expensive. Value and earnings are what count." (Dick Davis Digest)

UNHAPPY SURPRISE! "Uncle Sam might make your nice tax-exempt municipal bond taxable next year. This stems from IRS' quest for money it says is owed by municipal-bond issuers, such as states and towns.

"IRS said in a July 19 ruling that if municipalities don't cough up money in a year, it may yank their exemption." (Business Week, Aug. 5)

HOMETOWN HONORS: BG&E stock is listed under "Favored Electric Utilities We Like" in S&P Outlook, July 31 ("Pending merger with Potomac Electric is a long-term positive"). USF&G appears under "Selected Companies With Major Stock-Repurchase Programs" in same Outlook. ("Share buybacks help support stock prices.")

MARYLAND MEMO: "Comptroller of the Treasury is beefing up its audit staffs. There will be more sales tax audits. Taxpayers are vulnerable when they buy things out of state and don't make necessary reports." (Solomon & Nislow, CPAs.)

TOPS & SHOPS: "Five top-performing newsletters over 10 years through June 30 were, in order, MPT Review, California Technology, Fundline, New Issues, Investment Quality Trends." (Hulbert Financial Digest, July)

Kiplinger Washington Letter says shopping is now top attraction for foreign tourists in the United States, more than Disney World, Yellowstone, etc. ("Many tour groups head straight to malls and discount outlets.")

"The bull is wounded, but the market's already oversold -- a buying opportunity for near-term gains." (Smart Money, Aug.)

WARNING: "Busy entrepreneurs often fail to take measures to safeguard their families and companies' futures after their death. With estate taxes as high as 55 percent, that's a prescription for disaster. 40 percent of those surveyed have out-of-date plans." (Inc., July.)

MIDSUMMER MEMOS: "Clintonomics boosted financial health of most Americans. Stocks are way up, the Dow rising 75 percent since he took office. Disposable personal income ahead 5.2 percent through this year's first quarter." (Money, Aug.)

"Automatic loan machines, coming to your bank soon, are

hottest new tools in banking. ALMs allow creditworthy consumers to get loans, 24 hours a day, without having to face a loan officer." (U.S. News & World Report, Aug. 5, in a useful story, "The New Money Machines")

Pub Date: 8/02/96

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