The Cincinnati Enquirer from Cincinnati, Ohio on October 27, 1991 · Page 118
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October 27, 1991

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The Cincinnati Enquirer from Cincinnati, Ohio · Page 118

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Sunday, October 27, 1991
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EDITOR: JACK SEAMONDS, 369-1962 THE CINCINNATI ENQUIRER SUNDAY, OCTOBER 27, 1991 SECTION I O) -- NYSE listI-4 NASDAQ stocksI-6 Amex stocksI-7 Mutual fundsI-8 m mmmmmmww I " Mark late boost toughest task for CEO Braykovich Money i jf I i Lai i ... iaaJI T ( km it A if u The Randolph file Name: Jackson H. Randolph. Age: 60. Hometown: Cincinnati. Family: Wife, Angie. Four children Terri, Patti, Todd and Craig. Position: President and chief executive officer of Cincinnati Gas & Electric Co. He joined the company in 1959 and has served in many positions, including manager of ... rate and economic research, senior vice president of finance and corporate affairs and executive vice president. Background: Graduate of Green-hills High School, 1949; bachelor of business administration degree from University of Cincinnati, 1 958; master of business administration degree from University of Cincinnati, 1968; Public Utility Executive Program, University of Michigan Graduate School of Business, 1969; Wisconsin Graduate School of Business, 1974; MIT Sloan Program for Senior Executives, 1983. Community activities: Campaign-drive chairman of United Way of Greater Cincinnati, 1989; board member of Boy Scouts of America; chairman of Greater Cincinnati Chamber of Commerce, 1 990-91 ; a commissioner for Hamilton County Hospital Commission. Randolph hopes 'to convince public BY JEFF McKINNEY The Cincinnati Enquirer Jackson H. Randolph leans forward in his leather chair and chuckles when asked if he gets invited to fewer parties these days. "Actually, I get invited to more," joked Randolph, president and chief executive officer of Cincinnati Gas & Electric Co. That might surprise some Cincinnati--ans, who are not amused by the utility's pending $201.3 million annual rate increase. The utility is seeking an average 20 increase in electric rates to offset costs tied to the $3.4 billion William H. Zimmer Generating Station in Moscow, Ohio. Randolph understands the public anger about Zimmer and the rate case. Together, the issues could affect CG&E's profits for years to come if the rate increase is denied. "Most of the public understands why we're doing this," Randolph said. "But some people get upset with the Zimmer situation, particularly if they're already having trouble paying their bills." Randolph, who became CG&E's president in 1986, admits that getting the rate (Please see RANDOLPH, Page 1-10) v j t M-?'"" y' The Cincinnati EnquirerPhaedra Singelis Jackson H. Randolph, president and CEO of CG&E, watches as power supervisor Leroy Blackford works in the control center at the utility. Retailers not bargaining on good holiday season Shaky economy making shoppers conservative . . j ' ' " Whila the nation beains to Dull out of a recession, albeit slowly, the Cincinnati economy continues to slow. Job growth is the slowest it's been since the 1980-81 recession, and manufacturing employment falls ever faster. The recovery in home construction appears to have been modest, and the slump in commercial construction seems to have Readers' questions to be answered Sharp readers might recall that up until nine months ago, when this column was introduced, an investment question-and-answer feature ran in this same spot. Trouble is, the guy who inherited the space never much Uked opening his mail, let alone answering it. So the letters kept coming, even if they rarely drew a response. But alas, this being fall, I have turned over a new leaf. Beginning today and appearing periodically, I will attempt to answer readers' questions about investing and personal finance. To take advantage of this new, extremely free service, just mail your questions to me at The Cincinnati Enquirer, 617 Vine St., Cincinnati 45202. Here are some samples from my last batch of mail: Utility stocks QUESTION: Can you please provide me with names of utility companies (or other high-yielding stocks) listed on the New York Stock Exchange who sell shares of their stock directly to the investor? Gerald Eger, Lebanon, Ohio ANSWER: What many people don't know and won't probably learn from their broker is that dozens of companies offer dividend reinvestment programs in which shares of their stock can be purchased directly from them, without the investor having to pay hefty brokerage fees. For instance, Cincinnati Gas & Electric Co. has 17,000 shareholders in its program, whereby their dividends are automatically reinvested by the company in additional common stock. No fees, no 1 fuss. Other utilities with such plans and listed on the NYSE include: Atmos Energy, Central Maine Power, Central Vermont Public Service, Connecticut Energy, Consolidated Natural Gas, Idaho Power, KN Energy, Peoples Energy, Public Service Co. of Colorado, Rochester Telephone, Southeastern Michigan Gas Enterprise, Southwestern Bell, and Washington Gas. The problem with most of these plans is that you have to be a shareholder first before being allowed to plow dividends back into commission-free stock purchases. Perhaps the best bet to get involved with these or other stocks such as McDonald's, Cincinnati Bell or Chase Manhattan is to join the National Association of Investors Corp. in Royal Oak, Mich. After paying $32 to join, members can buy shares in any of 82 companies with dividend reinvestment plans for a $5, one-time fee per company plus the market cost of the stock. After you own at least one share, you can send payments directly to the company's dividend reinvestment agent again, no brokers and no commissions involved, which means nice savings for small investors. For more information or to obtain an application, write to NAIC at P.O. Box 220, Royal Oak, Mich. 48068. Opinion on Grace Q: We own W.R. Grace common stock, and it is starting to increase in value recently. We would like to have your opinion of this stock for the future. bottomed out. stores, reaping 27 of their sales in 1989, the latest year for which figures are available, the National Retail Federation, a New York-based trade group, says. It's also the season for profits. "For a company that is marginal all year long, Christmas can be the whole profit," Jack Schwartz, president of the National Retail Federation, says. "Christmas is make-it-or-break-it for the general retail industry. Without Christmas, you can't survive. It means a great year or a terrible year." Last year bad And last year? Well, last year was terrible, too. December department store sales of $29.5 billion were up just 0.4 from 1989, and apparel store sales of $7.5 billion rose just 2.4, the U.S. Department of Commerce said. But more people than just retailers follow the progress of the Christmas shopping season. "It means a great deal to the economy," says Richard Feinberg, director of the Retail Institute at BY JOHN BYCZKOWSKI The Cincinnati Enquirer Retailers are worried about Carol Phelps and her friends. "The economy's pathetic," Phelps, a nurse who lives in Cheviot, says. Her full-time schedule has been cut by eight hours a week. The spending money she earned at a second, part-time job now goes toward bills. Work has been good so far for her husband, a truck driver, but she said he sees things slowing down next year, and he's begun looking for part-time work. Result: The Phelps are now banking on a leaner Christmas. While she won't trim her shopping list, Carol Phelps said she will spend less on each person. As for her husband: "We won't get anything for each other." And as for her friends at the hospital where she works, "a lot of them say they're going to be cutting back on their Christmas lists." While retailers try to create excitement in Total employment 0.9, September vs. a year ago Cincinnati added 6,900 jobs from September, 1990, to September, 1991, the smallest gain since the 1980-81 recession. The services sector gained 12,300 jobs, while manufacturing lost 5,300. Total nonagricultural employment: 760,200. Manufacturing employment -3.6, September vs. a year ago The eighth consecutive month of decline, and the worst yet: a loss of 5,300 jobs from a year earlier. Biggest losses are in transportation equipment and electronic equipment. Gaining jobs were chemicals, publishing and food. New unemployment claims 27.7, September vs. a year ago Total new claims filed: 3,244. Cincinnati continues to do worse than the state overall. ADS New housing permits 1 5.9, August vs. a year ago Pacing this industry is a big gain in multifamily housing construction, lid 63 from a vear aao but Rowe still trailing 1990 year-to-date totals. Single-family home construction rose a modest 4.4 in August. Nonresidential construction Purdue University. Tor the last 10 or 15 years, we've been a consumer-driven economy. Consumers have driven inflation. Consumers have driven growth in gross national product. When people buy goods and services and put people to work, there's more money to spend." Some retailers are crossing their fingers, holding out hope that sales will rise. Many won't have their Christmas merchandise out for another two weeks. But the economic news has been grim. The Federal Reserve Board reported last week that there has been little improvement in retail sales in most of the country. Orders for durable goods fell 3.2 in September, and new unemployment claims reached their highest level since May. "We're trying to stick with the plans we had originally made, to just have it be a normal Christmas for us, that we promote what we feel we need to promote, and not do anything different," their stores this Christmas shopping season with garland, carols and and discounts, shoppers might not return the favor. Last year, Christmas spending was depressed by the prospect of the Persian Gulf War. This year, retailers fear that spending might be depressed by widespread worries about the economy. Pessimism reigns Merchants and economists say they're pessimistic, expecting gains of 4 or so in retail sales this year compared with last Christmas, barely matching the rate of inflation. Retailers would essentially break even. "I do not predict a banner Christmas," says William M. Rowe, national director of the Cincinnati-based merchandising consulting group at KPMG Peat Marwick. "I think it's going to be extremely competitive, lots of mark-downs, and I think most of the department stores and specialty stores are 0.9, Year to date through September Nine months into the year, and this industry finally pulls ahead of last year's total, signalling the industry has bottomed out. In dollars Ml fir$7i$7 Klee Retail sales 3.7, August vs. a year ago The smallest year-to-year gain since February, 1989. Sales of apparel, furniture and other department-store merchandise rose 0.3 - the third gain in the last four months after eight consecutive losses - and department stores sales rose 2.6. going to be competing very vigorously and not getting the profits" from full-price sales. Adds Edward J. Klee, director of investor relations for U.S. Shoe Corp., which operates 1,700 women's apparel stores nationwide, including Casual Corner and Petite Sophisticate: "We're very cautious. The fall started off very lackluster, and there's a lot of promotional activity out there in the marketplace," meaning sales might hold steady, but profits will drop. "We feel it's going to be a fair Christmas, not a good Christmas." Already, the retail community is seeing signs of weakness. "Vendors are shipping earlier, which would tend to indicate that orders are down," says Larry Gresham, of the Center for Retailing Studies at Texas A&M University in College Station, Texas. "For the economy in general, that would tend to be an indicator that it's going to be slow." November and December are the two busiest says Greg Pellegrini, manager of McAl-pin's downtown Cincinnati store and assistant to the division's president. Everything depends on consumers, with the early signals leaning toward conservative spending. "We've not been getting very good consumer confidence readings in the past few months," says Fabian Linden, executive director of the consumer research center at The Conference Board in New York. That group's October consumer confidence survey, 'due out Tuesday, will help indicate what kind of spending mood consumers are in heading to Christmas. His expectations aren't high. "I would think that the way the economy has been going, we may not have a spectacularly good Christmas," Linden says. Cincinnati-area retailers report mixed signals. (Please see ECONOMY, Page 1-3) Maliufac -0.5, September vs. a year ago The 10th decline in the last 12 months, but a better total than in 1987 and 1988. The improvement from August to September was smaller than in recent years. Industrial electricity sales""";''. 11, September vs. a year ago There's some good news here; we just can't tell how much. A warm month and a comparison to a weak Should we hold it for the long term or will its value appreciate soon to a point where we should consider selling it and taking the profit? Joe Cupito, Cincinnati A: Indeed, you and other Grace shareholders must be rejoicing the more than 60 jump in the stock in 1991. The long-time "problem stock" is getting rave reviews from many corners, including First Boston Corp., which put out a "strong buy" recommendation in July, marking the first time in 22 years it told clients to buy the stock. About two-thirds of the analysts who track Grace are bullish; not a one is saying "sell." Reason: A new management team is restructuring the company, a move that should make the company more focused and profitable. Some expect earnings to double by 1995. Jim Wilbur, an analyst at Smith Barney, says that if you're a trader and interested merely in short-term profit, "you should probably sell tomorrow." Indications are that the stock could lose some ground near term before continuing its advance. But if you can have some patience and hold the stock for a few years, you should do well, he says. "We've got a buy on it, which is about as emphatic as we can get." Mark Braykovich's Money column appears each Sunday. September, 1990, account for some ot the gam The Cincinnati EnquirerRon Hufi months of the year for department and specialty and Source: Ohio Bureau ot Employment Services; U.S. Department ol Commerce; Cincinnati Gas 4 Electric Co.; F.W. Dodge, a division ot McGraw-Hill. After almost a decade of trying to shake up the world market for computerized noise and vibration test equipment, tiny Zonic Corp. in Milford has seen a dramatic increase in sales and earnings and set a record for net income. The Mariner Man, long synonymous with Old Spice cologne, has been replaced by a younger, hipper man of the sea. For the story behind the decision by Procter & Gamble, which bought the product last year, see Patricia Gallagher's "Selling Points." As the Nov. 5 election approaches, local advertising agencies have adopted this strategy: If you represent incumbents, push their names and experience. If you represent challengers, promote them as fresh and energetic. " '5s T

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