Stock Picks In A Variety of Sectors

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It will take some time to realize the enormity of the loss and the amount of suffering caused by the wiping out of accounts which the recent break brought about. The effect upon trade and industry of this break is of course a matter of conjecture, but it seems clearly obvious that for some months at least the effect upon the luxury business will be rather severe. As a whole there seems to be no doubt that the market has made a bottom, and started another bull market. The drop in prices is approximately equivalent, on a percentage basis, to that caused by the panic of 1907, although accomplished in a very much shorter time.

Pick Your Stocks

From the viewpoint of our readers the most helpful thing that we can do would be, we think, to call attention to a long list of stocks in various industries, which are selling on an earnings basis with every anticipation that the earnings will not show a sharp drop lasting any length of time, and discuss these individual situations.

We will endeavor to pick tow or three stocks in each group which seem to be in a favorable position. It is to be remembered we have not had a serious commodity inflation, or a money panic, but merely a bad break in stocks caused by the turning of the mob psychology from the bull to the bear side, which has unquestionably driven a number of stocks far below their true value.

In the agricultural implement group the estimated earnings of Case Threshing Machine are $25 and the stock is selling around 180. International Harvester’s estimated earning per share are around $10.50, and the stock is selling at 90. These are the recommendations for this group.

In the motor group Chrysler’s estimated earnings are around $6 per share and the stock is selling $35. General Motor’s estimated earnings are $5.75 and it is selling for 50. Hupp’s estimated earnings are $3 and it is selling for 24. Nash’s estimated earnings are $8 and it is selling for 55. Studebaker’s estimated earnings are also $8 and it is selling for 47. These are the stocks recommended in this group.

In the automobile accessory group, Electric Autolite’s estimated earnings are $14 and the stock is selling for 80. American Bosch Magneto’s estimated earnings are $6 and the stock is selling for 30. These are the recommended stocks in this group.

In the tire group, Goodrich’s estimated earnings are $8 and the stock is selling for 55. Goodyear’s estimated earnings are $12 and the stock is selling for 70. U.S. Rubber’s estimated earnings are nil but the company has excellent prospects and the stock is selling for 35, and its retention for the long pull or initial purchase is advised. These seem to be the three best choices.

In the building group, international Cement’s estimated earnings are $7.50 and it is selling for 60. Warren Brothers’ estimated earnings are $20 and the stock is selling for 145. These seem to be the two best choices in this group.

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In the chemical group, U.S. Industrial Alcohol’s estimated earnings are $16 and the stock is selling at 142. Union Carbide and Carbon’s estimated earnings are $3, and the stock is selling at 90. We would rather wait for a reaction to about 80 for this stock, but it must be realized that a large part of the earnings are not shown in this report, and hence the stock is recommended. These seem to be the choices in the chemical group.

In the copper group, Anaconda Copper’s estimated earnings re $11 and the stock is selling at 95. Inspiration’s estimated earnings are $4.50 and the stock is selling at 30. Kennecott’s estimated earnings are $7 and the stock is selling at 75. Nevada’s estimated earnings are $4.50 and the stock is selling for 40. We like all these stocks, but would prefer to buy them at prices five to ten points cheaper than the prices mentioned.

In the dairy products division, Borden Company is selling for 80 and estimated earnings are $5.25. National Dairy Products is selling for 50 and estimated earnings are $5. These two stocks would seem to be the pick of this group, and if Borden can be obtained anywhere near the low prices made in the break would advise purchase as well as buying Dairy at the prices mentioned.

In the packing group, Cudahy, which is selling around 41, would appear to be the outstanding bargain. No estimate of its earnings is available.

In the mining and smelting group, American Smelting is estimated to earn around $10 a share, and is selling at 85. International Nickel is estimated to earn $2 and it is selling at 38. These appear to be the cheapest in this group.

Oil Recommendations

In the office equipment group, Remington Rand is estimated to earn $4 and is selling at 37. National Cash Register is estimated to earn $7.50 and is selling at 85. Underwood Elliott is earning $10 and is selling 104. These seem to be the three choices in this group.

In the oil group, Pure Oil is estimated to earn $3 and is selling at 25. Royal Dutch and Shell Union, its subsidiary, are selling at 54 and 25, respectively. It is impossible to get estimated earnings on these two but they are recommended. Standard Oil of New Jersey is estimated to earn $5.25 and is selling at 65. Sinclair is estimated to earn $4 and is selling at 28. Texas Corporation is earning $5.50 and is selling at 55. These seem to be the choices of this group.

In the railroad group, Atchison, Topeka & Santa Fe is estimated to earn $25.60 and is selling at 240; Baltimore & Ohio is estimated to earn $13.10 and is selling at 124; Bangor & Aroostook is estimated to earn $8.60 and is selling at 63; Chesapeake is estimated to earn $22.60 and is selling at 200; Chicago and Northwestern is estimated to earn $8.40 and is selling at 87; Chicago, Rock Island & Pacific is estimated to earn $14.60, and is selling at 115; Delaware & Hudson is estimated to earn $16.80 and is selling at 170; great Northern is estimated to earn $12.70, and is selling at 101; Missouri Pacific is estimated to earn $11 and is selling at 66; New York, Chicago & St. Louis is estimated to earn $20.80 and is selling at 130; New York, New Haven & Hartford is estimated to earn $11.30 and is selling at 111; Pennsylvania is estimated to earn $9.50 and is selling at 91; Southern Pacific is estimated to earn $13.10 and is selling at 129; Texas & Pacific is estimated to earn$16.20 and is selling at 130. These seem to be the pick of the rail group with an extremely good ratio of earnings to selling prices, considering the stability of the business.

In the store group, Best & Company is estimated to earn $5 and is selling at 42. May Department Stores is estimated to earn $7 and is selling at 66. Jewel Tea is estimated to earn $5.50 and is selling 47. Montgomery Ward is selling at 66 and Sears at 105, with no estimated earnings, but they seem to be the pick of this group.

Best Steel Stocks

In the steel group, Bethlehem Steel’s estimated earnings are $12, and the stock is selling at 94. United States Steel is estimated to earn $18 and is selling at 185. These would seem to be the choice of this group among the higher priced stocks. In the lower prices Central Alloy Steel, estimated to earn $4 and selling at $40, seems attractive.

In the amusement group, Fox Film is estimated to earn $10 and is selling at 65, and Warner Brothers Pictures, estimated to earn $6, selling at 38, would seem to be the choice of this group.

The above list is recommended at the prices mentioned, which are the closing prices October 30th, or at lower ones, and we would buy the stocks which do sell under any prices given.