The Palm Beach Post from West Palm Beach, Florida on November 2, 1968 · Page 18
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November 2, 1968

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The Palm Beach Post from West Palm Beach, Florida · Page 18

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West Palm Beach, Florida
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Saturday, November 2, 1968
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18 Palm Beach Post-Times, Saturday, Nov. 2, 1968 Merger Fever' Reported Causing Investor Problems By GERALD M. LOEB NEW YORK (NANA) It's a dull week Indeed, these days, without someone proposing a billion-dollar merger! The merger fever, which has been growing by leaps and bounds, poses some new problems for security owners. It used to be that the sophisticated Investor left the static companies to others less shrewd. Today, the smart buyer goes on a hunt for possible "takeover" candidates. Over age management, over-rich cash assets and abnormally low return on capital traditionally kept the aggressive investor away. Today, if a take-over Is a possibility, these can be sound reasons for becoming a buyer. The original merger was probably between the coal and ice man. This turned two seasonal businesses into one all-year operation. As time went on, combinations evolved for an increasing number of reasons. It made sense to take over a company In a related line where economies of operation were clearly achievable. A high proportion of the cur-, rent merger craze is not so well founded. The motives of the acquiring company In clude over-ambitious management, shaky empire building through accounting legerdemain and just plain raiding. It is true that occasionally two and two can add up to five, but only in a minority of cases. In the long run, many mergers will take far longer to jell than their participants anticipated. Others will fall completely by the wayside. There is nothing unique In the current merger boom to guarantee Its permanence. In fact, there Is much to suggest that It will end as previous booms in this and other fields have ended. The merger of commercial credit and control data and the current negotiations toward a combination of Xerox and CIT Financial have a certain similarity. In both cases the acquiring company commands a very high market price for Its shares. The take-over candidates tend to be modestly priced. Commercial Credit, before the merger, tended to sell from 11 to 16 times earnings. Its annual growth rate was almost nil, but it had modest possibilities of Improving. Control Data commanded 50 to 85 times its earnings, with an expected growth rate of over 20 per cent. CIT Financial traded between 10 and 14 times earnings. Its growth rate was near 3 per cent with modest possibilities of Improvement. Xerox sold at 50 to 70 times earnings, reflecting a sensational growth rate of possibly as much as 50 per cent. The outlook for Xerox Is for this rate to slacken substantially. The stockholders of Commercial Credit and CIT Financial saw their shares climb sharply. They had the chance to cash In at a handsome figure. There were good reasons why control data took over Commercial Credit and why Xerox hopes to effect its merger. The two situations differ, but in both cases it seems very unlikely that the new combined companies can enjoy the high market valuations and the high growth rates that they experienced Individually. Xerox and Control Data are down 15 per cent to 20 per cent from their market tops. From' the viewpoint of the managements, the mergers are expected, in the long run, to reduce the problems faced by the companies Individually. Commercial Credit and CIT Financial failed to satisfactorily Increase earnings. Control Data needed additional funds. Xerox needs a broader capital base to finance expansion. Each merger has to be weighed on its own merits. These two mergers are giant combinations. Every day there are deals made by various-size companies. It goes without saying that the acquired company stockholders almost always benefit. They can sell out at a premium. There are times when it may pay them to stay with the new situation. There are acquiring companies which have gained In earning power and market price with each acquisition. This Is especially true where the situation has not grown overly large or overly complicated. Investors should look at neglected situations to determine If they are possible takeover candidates. The investor who is fortunate in seeing his stock advance sharply on merger rumors or actualities must carefully weigh their possibilities and decide whether to go along or liquidate. Business Outlook Conglomerate Mergers Described As Type Of Corporate Feudalism Your Social Security 7 "? J IV ',: St ,?i W IN ratios glamorous prospects have created It. Its test will come in adversity Just as with the public utility holding company of the late 'twenties assuming that adversity isn't passe. they are helped in their endeavors they'll look up to the top and forget their jealousies. The conglomerate Is a prosperity a Wall Street phenomenon. High price-earnings well he handles his princes. Can he win their support and cooperation? After all, many of them became princes without consent. If the benefits trickling down to them are large if r 7f yjsS 1 .TV s. i sf m mm 'PLANTING GOOD LUCK An ancient Mayan good luck symbol was "planted" within the walls of the new Mayan Towers high-rise condominium at topping off ceremonies earlier this week. The $2 million structure is being rapidly completed at Palm Beach Shores. Present for the ceremonies were Palm Beach Shores' Mayor C.J. Wolfe, left, and Dr. Daniel Vecchione, president of Mayan Towers, Inc., right. Man in background is not identified. The plaque is comparable to the "God Bless Our Happy Home" tradition in America, according to Dr. Vecchione long a student of Mayan culture. The 8-story Singer Island structure is scheduled for January completion. StaH Photo by VlncMlrindi of the old Wyoming frontier days which saw the opening of the first Penney store at the turn of the century. Pictured from left: Pat Marshall, Margo Conlan and Bob McCleary sales promotion manager of the store. FOUNDERS' DAYS STYLE Things took on an"oId-West" atmosphere at the J.C. Penney store in Palm Beach Mall this week as the annual Founders Day was celebrated with a four-day sales event. Store personnel dressed the styles Stock List Knocked Down By Election's Uncertainty Your Car Going To Trade? Clean Up 'Betsy' Turnover amounted to 14,480,000 shares, as against 17,650,000 shares in the previous session. Of the 15 most active Issues, four were winners, 10 were on the losing side and one was unchanged. Youngstown Sheet & Tube headed the list of most active By J. A. LIV INGSTON Here's Webster's: "Conglomerate-noun: A mixture gathered from various sources; a composite mass." And here's Random House: "Anything composed of heterogeneous materials or elements." Dictionaries haven't caught up to the Great Takeover Movement in Wall Street. Eventually there'll be another definition: "A collection of corporations mixed together as opportunity offers." An old-fashioned merger rarely was conglomerate. Usually the companies were in associated lines oi business. A company making a finished product might merge with a producer of raw materials. The principal stockholders and officers would decide whether economies were possible and the resulting enterprise' would be stronger. Then, they'd distribute power In the new company who'd be chairman, president, executive vice president, etc. Mergers then were a marriage, a meeting of minds, A conglomerate is a form of corporate feudalism. The monarch is called a president. And each prince, heading his own company and reporting to the monarch, is also called a president. This is rank inflation: A vice-presidency becomes a presidency. Wall Street disparities in stock prices has fostered conglomeration. Example: Company A earns only $1 a share but its stock sells for $50. Company B earns $4 a share and Its stock also sells for $50. "A" can afford to offer two shares or $100 of market value of its stock for one share of "B." How come? In earning power, it gives only $2 for $4. No cash changes hands. It's usually done with paper an exchange of securities. These offers are often made by tender by announcement. "B" stockholdres suddenly see shares that had been selling at $50 jump toward $100. They can't resist. A tender offer rarely permits negotiation among equals. The man with the highest-priced stock, relative to earnings, has the say. The princes are dragooned by the forces of the marketplace into acquiescence. What seems like a happy family may be an armed truce of convenience. The top company In a conglomerate offers organizational and financial advice and assistance. It may be able to coordinate sales efforts. Expertise in one company may coalesce with expertise in another. This cross-fertilization of ideas will lead to new products and new developments. The success of a conglomerate depends obviously on the underlying strength of the underlying companies. If they're strong In their own right and can survive amalgamation, the conglomerate will prosper. Success also depends on the skill of the monarch how Nov. 0t. 950 900 11 150 too 750 70 960 950 940 930 93a Ex-Resident, Accountant, Has Book Published By R. C. GEIIRKEN JR. DISTRICT MANAGER W est Palm Office q. Is it true that the Social Security collections are placed in the United States Treasury's General Fund? A. The moneys received from Social Security taxes do not go into the general fund of the treasury. The law has specifically set aside Social Security "trust funds," and all social security taxes go into this special fund. Q. If I work long enough to have enough credits to draw my Social Security, how do I know I will? A. The Supreme Court of the United States has ruled the right to Social Security benefits is protected by the U.S. Constitution. Therefore, if a person meets the requirements, the Supreme Court has ruled that he will receive the benefits he is entitled to. Q. The other day when I went to the doctor he asked me for my Medicare card. I told him it was in my bank deposit box, so that it would be safe. He told me I should always carry it with me. Is that true? Couldn't the Social Security Office furnish my number to him? I don't want to take a chance of losing it. A. He was correct. You should always carry your card with you. VVe can usually locate your number promptly. However, in some circumstances, it can take as long as 24 hours. If you should accidentally lose your card, it can always be replaced. Q. I noticed in my Medicare Handbook that there are several addresses for mc to send my Medicare claim to for refund. W hic h one provides the most prompt service? A. You should mail your claim to the insurance company in the state where you received the medical services. In Florida the address is Clue Shield of Florida, Inc., P.O. Box 2525, Jacksonville, Fla. 32201. Q. I am 76 years old and pay $4.0(1 per month for the Medical Insurance under Medicare. I have been in a nursing home since April III67, paying all of my own expenses in the home. Since coming here, I have had several room mates, and the Medicare Program helped pay their expenses. Why did they receive help while I am told that I am not eligible? They don't pay any more a month than I do. A. Your Medical Insurance will help pay for up to 100 days of care in a qualified nursing home if you were first in the hospital for three days, and you are admitted to the nursing home for further treatment of the condition for which you were hospitalized. You must also be admitted to the nursing home within 14 davs after vou leave the hospital'. Inn Head Among Best Frank Williams, manager ot the Holiday Inns of Palm Beach and West Palm Beach, announced that Ralph Muti of the Holiday Inns of Palm Beach was named among the top 8 per cent of chefs in all inns In the Holiday system of 1,026 Holiday Inns in 48 states, Canada, the Caribbean and Europe. Williams also announced that James McManemon, who was formerly Innkeeper of the Downtown Holiday Inn here, was listed among the top 8 per cent of Holiday Inn managers. The rankings were made last week at a conference of the International Association of Holiday Inns at Memphis, Tenn. Richard R. Brown Jr., of Brown Moving and Storage, Inc., will speak Friday at the three-day meeting of the Mayflower Warehousemen's Association In Fort Worth, Tex. Brown, on the Insurance committee, will speak on "Protection to Warehouses and Customers." Kgg Market Lower tasi toast lorally produced uraae A cartons direct trom producer to retailer. Extra large 49-SR. mostiv 53-55. Large 46-54. mostly 49-51. Mediums 41-46. mostly 42-44. Smalls 35-37. mostly 36. Market steady; supplies ample; trading (air to good. r'lorida fc.ngs. direct from producer to retailer Including hotels and restaurants. Extra large 47-55. most I v 50-52. Large 43-51, mostlv 48 49. Mediums 38-43. mostly 41 43. Smalls 32 37. mostlv 35. Market steady; supplies ample; trading (air. Issues, rising 3 1-2 to 47 1-8 on 233,100 shares. In second place was Sinclair Oil, gaining 3 1-8 to 102 on 215,-900 shares. Sinclair and Atlantic Richfield announced plans to merge through an exchange of stock. The latter dropped a point. work devoted to the problems, peculiarities, and characteristics of small and medium-sized enterprises. Much has been written about big business, but systems especially applicable to smaller organizations have never before been gathered Into one accounting book. Thus the "Portfolio" is a material contribution by NSPA members to the accounting profession. Other Floridans contributing to the "Portfolio" are John J. Welch, Boca Raton, whose system is for auction galleries; Fritz M. Anes, Daytona Beach (automobile dealers); and Clarence Langer, Coral Gables (women's apparel shops). j July Awf.SQt. Oct. By EUGENE B. MILMOE Spruce up your car if you're planning to trade In for a new '69. Appearance, not performance, Is the key to obtaining maximum used-car allowance. A small Investment in cleanup materials, plus elbow grease, can bring up to 20 per cent more than you might otherwise get. Start with the exterior. Get rid of rust and pitted spots on all metal trim Including wheel covers with stainless steel wool. Wash thoroughly, then apply a protective coating of good chrome polish or wax. Remove stubborn stains and scuff marks from body finish with a kerosene and water solution, steel-wool rust marks and apply touchup paint where needed. When dry, blend In touched up areas with rubbing compound. And, of course, coat the entire finish with a good wax. Finish off the exterior by spiffing up tires with a rubber dressing. Tackle under the WASHINGTON - Drawing on expertise acquired In his 28 years as an accountant, 22 of them in West Palm Beach, William Dobrow has written an accounting system for movers and haulers, just published by Prentice-Hall, Inc. The author Is president of Dobrow-McKenna, Inc. Dobrow joined fellow members of the National Society of Public Accountants In writing the two-volume "Portfolio of Accounting Systems for Small and Medium-Sized Businesses." The 70 chapters cover a full spectrum of businesses and professions typical of the American community. Unique In its purpose, the "Portfolio" is a reference J E M A M 375 340 325 300 275 250 - National Exchange NKW YORK I UPI) - Following is s record of stocks traded on the National Stock Exchange Frldav. Sales! hdn) Hiih Low Close Chi. Adams DS WO ft ; 15 15 - , Alnslle CP UK) 51 K) 51 K) WW 3' 3'i 3 V Am Mtg&lnv Am Mtr Inns Anodvne Applied Syn Auto Proc Canada So Can So rts Childhood Pd 2 2t 2M,- V, 12 29, , 17 -1 13 '! 12. 29 29 17 18 Hot) 1K) 3V, 3 3V, 3V, . 24,900 3-16 5-.12 3 16-1-1 -16 1100 184 17 V, 18 Csl Carlo Will 1 11 16 IS 1 11-161-16 Com Auto Svc W0 13 h IIS 134- Delta Ind K Cat Ins E Utah M Frank Mini Gen Elect Hlco ( p Inl Lite Int Nursing Leasing l"r Magellan Mltron Monarch Movie-Malic Olympic Lite Outdoor Sup Palms Pasa Pancoastat Panlepec Paterson S Perfect Fit Real Eight Rotodvne Saucy S Stskon Telmont Cp Tolchtn Inst Utd Canso Wells Ind Whale El WW 29 2, 29 1 1300 124 11S 124 urn is iv, iv,-4 2500 117 no 110 -a 14110 I S 1916111-161-16 ZIW 1, 1, 1, 69110 4S 12 US S 5S 5S 5S 3 2S 3 74 74- 4 17V, 16S !74 l 1 7-16 1716-116 34 3S 3S- V, 3111) 500 5WI0 100 2500 1 11 III 210 51 l 300 151 10 Hill) 1110 6K) l.'IIX) 21 N) 1IKI0 300 100 200 9IKJ ltlv, 10 174 IS 2 V, 6S 6 12S 4S 24 34 8S 7S 64 74 25 154 164 14 2 6S V 124 4V, 24 164- 14 2 - 4 6S- 4 54- 4 124- 44- 4 24 4 34 34 as 7S 8S- 4 1S 4 6 6 - 4 1400 1301) 1100 64 74 4 24 24 4 15', 4 Yoo Hoo 14 V, Total Sales 54,21X1 Florida Vegetables BELLE GLADE, Fil. Nov. 1 FOB ping point Information for Friday as reported by Federal-State Market News Service. Precoollng Extra. Lake Okeechobee Section: BEANS: bu. Harvester! Few 6 40. CHINESE CABBAGE: 16"crtsl 50. CORN: Mkt. steady CrU 44 5 doi. Yellow 2 50 55. White 4.00. ENDIVE: Mkt. steady 1 1 bucrtl 2.00- 25 ESCAROLE: Mkt. steady 1 1-9 burcts2.00 LETTUCE: Romalne Mkt. steady 1 1-9 bucrts 1.25 Leaf 4-5 bucrts 2 00. RADISHES: Mkt. steady bkts clni reds 304 oz films 1.75. Fort Mvers Immokalee Seel Ion: CUCUMBER: Mkt: steady bu. 8.00 Fair quality 5 6 00, PEPPERS: Mkt. iteady Med 4.70. Fort Pierce Section: TOMATOES: 4t) lb etns 75 per cent more U.S. No. 1 5-6 8.00 6-6 7:00 -7 6.00. Tax Free Bonds Selected dally quotations of tax exempt public authority bonds furnished by the Palm Beach office of Goodbody and Co. 832-6331. Chesap Bay Br Fla Tump III Toll Rd 111 Toll Rd Ind Toll Rd Jvtlle Exp Jvllle Exp Ka Tump Ky Tump W Mack Br Auth Me Tump Mass Tump Mass Tump N J Tump N J Tump OTur WVaTump 5V, v, 3S s 34 '00 414 444 -'01 MS 99 491 '95 85S m ft '98 994 1014 4.9 '94 794 81 4.91 4 '92 83 S 4.10 '03 83S 34 '94 754 4.83 '00 90S 4 '94 IMS 4 '89 954 3 30 '94 77 S 4 15 '02 814 34 '! S w4 ra 864 503 5.02 5.41 4.15 465 509 401 4.84 3 83 flat S '08 93 V, 3V, '92 894 "91 89SS 71 Sugar Futures NEW YORK (UPI) The Work! Sugar contract closed 4 to 19 points lower on the New York Sugar Exchange Friday on 2,771 contracts traded. The domestic contract closed unchanged. Wi UHL08UOAK The Ranges: Op HI U a Pr Jan 2 65B 2.71 2 55 2.53A 2.72 Mar. 2 78-71 2 81 1 ?. ! 2.77 May 2 89 2 92 2 80 a.M 83 2 87 Jul 2 97 9 2.98 2.83 2.87-88 2.93 Sep 3.0M1 3 02 2 90 2 92 B 2 99 Oct 3.03B 3.03 2.93 2.95 B 3.02 Nov. 3 06B 3 09 2.98 2 98B 3.01 Jan 1.10B 3.08 3.07 3.04N 312 Mar 3.18B 1.20 1.07 3.09 316 Sales 2,779 contracts Spot price 2 20 cents per pound Open Interest 23.446 contracts, Be-mastic Sugar The Rangei: CI Pr Mar. 7WB 7 65 May 7.6TB 1.67 Sales None Spot price 7.57 cents per poind Open Interest 481 nominal. NEW YORK (UPI (-Investors, largely discounting the U.S. bombing halt over North Vietnam which had been anticipated to a great degree, became aggressive sellers Friday amid new doubts over the results ot next week's Presidential election. There was general belief on Wall Street that the de-escalation may offer new hope for the Democrats, but at the same time possibly hamper the ability of either candidate of the two major parties to win the electoral majority needed for election. Thus, the House would choose the next president, a particularly discouraging prospects to the financial community, which has little taste for such uncertainties. The UPI stock market Indicator, measuring all stocks traded, was off 0.33 per cent on 1,565 Issues crossing the tape. Declines outnumbered advances, 778 to 552. There were 64 new highs set and 20 new lows. The Dow Jones Industrial average, which reflects movement in the blue chips, was off 3.98 to 948.41. The New York Stock Exchange Index mirrored a decline of 19 cents in the average common share price. Over The Counter Quotations from the NASD are representative inter dealer prices as of approximately 4 p.m. Inter-dealer markets change throughout the day. Prices do not Include retail markup, markdown or commission. Allco Land W; 20V, AloeCreme Labs 84 Amer. Bankers Life Assurance Co. 17 17 Amer. Hankers Life Insurance Co. 24 25 Amer. Heritage Life Ins. Co 144 151 Arvltia Corporation -.17 184 Atec Oil 164 16 Bancstock Cotp. of America .... 12 13 Blllups Western 1W, UV, Commercial Bancorp of Florida .t5 -16 1st Nat l Bank of Palm Beach ...78 80 1st Nafl Bank of Riviera Beach .33 35 Fisher Foods 404 41 Fla. Pub. Util. 1.12 Pfd 204 - Fla. Pub. Util,. Common stk 19 20 Florida Tile 264 274 Fla. Water Utilities 5'-, 5S Gulf Life 304 31 Lum's Inc 52 53 Marriott Corporation 27$ 274 National Life Insurance of Fla. ..114 12 Si Soroban Engineering .'Ill U.S. Sugar 19 51 Unlvls, Inc 17 S 181, Commodities Rubber March 2190 2240 No. HSugar March 264 No. 8 Sugar Mav 282 WoolTops March 16,19 1666 Crease Wool March 1201-1211 Lead March 1225 Copper March 453 Zinc March 1250 Frozen Pork Bellies Feb 31,55 65-31. 72 31, 30-31. 40-30 Sales 2,290 March 31. 50-55-31. 65-31, 25-31, 35 25 Sales 5.17 Mav 31. 95-32.02-31.70-.il, 70 Sales 214 July 32. 42-32. 52 32, 15-32. 20-25Sales 171 Aug. 31. SON Sales none Markets At A Glance NKW YORK (UPI 1 - Markets al a glance at the close on Friday: Stocks Lower In active trading. Bonds Irregular. l S. Government Bonds Ssteadv. American Stocks Lower. London Stocks Higher. Cotton Futures mostly lower. Grams in Chicago Wheat closed 4 lower to higher, corn 4 higher to V, lower, oats uncharged to higher, rve unchanged to lower, sovbeans to 1 S lower Hogs 25 cents lower, top $20 (Hi, Cattle 25 cents lower, top 1(0 25- Sheep sleadv. top SJ7 2.V Hi ,. JFMAMJ J A ON P hood with degreaslng compound to clean up the engine and all accessories, Including fan blades and dipsticks. Finally, clean up the upholstery, and, where needed, replace worn floor pads. Q What Is the carburetor air horn, the neck? J. A. A j- It's more commonly known as the throat, where gas and air blending take place. Q My dealer say studded mow tires should be on all four wheels lor maximum antiskid protection. I thought they were needed on rear wheels only. V. O. A Rear only Is the usual practice. It can't be denied, however, that studded front tires will provide extra control during emergency braking on icy roads. Q I had my battery quick-charged on the car, and It burned out my transistor radio. Isn't the garage to blame for not disconnecting the battery? -W. P. A Apparently they didn't realize you had turned on the radio. Q My car has been stalling frequently, and I've been told It's probably doe to defective dash pot. What Is that? S.T. A It's a carburetor device connected to the throttle linkage. Its function Is to slow down throttle closing when the accelerator Is suddenlyreteas-ed. TIP OF THE WEEK: Leakage of a screw-on oil filter Is usually due to overtightening. (EUGENE B. MDJMOE'S new 14-page booklet, "Your Car," answers 50 common car problems. Send ZS cents In coin to Your Car, Palm Beach Post-Times, Box 1872, Grand Central Station, New York, N.Y. 10017.) What Stocks Did By I nKH Prm InUriMlloiial Frldny Tharaday Wk A pro New Highs M 75 m New Lows 21) 14 13 Advances 552 741 Declinel 778 705 6(14 Unchinsed .... 215 215 217 Totals 15,5 1619 1582 New York Stock Exchange lain today 14.4HU.OIIO New York Stock Exchange Bond lalet today I19.160.otw Egg Futures CHICAGO (UPI)-FK ftittirn Friday: Oprm Hlk Uf CIom NoSv"U.'40 40 25 340 39 p 40 00 41 40 40 00 41 00 Jan 39.25 39 39 15 39 40 Apr 35.00 35.00 35 W 35.00 Sep ....... 4000 40.00 38.75 38.75 Frozen whole ettK' Dec 2l5 2S70 2815 280 Jan 2800 28 05 27.95 2805 m Be ii 1 1 Eld Mow.Tuo. Woo'.Thvf. ftl Mow. Tum. Wd. Thwn. fr. 360 351 356 354 -5 350 -imoii Joi- i, i 341 - Sine foot. 33 -.1 I 346 i 3441 I I I I I Tu. TKun. Cfoiod ago. The Dow Jones average of 3 industrials also declined, closing at 948.41 Friday, down from 961.28 a week earlier. STOCKS AVERAGE DECLINES The Associated Press average of 60 stocks declined sharply, closing Friday at 351.0, down from 355.7 a week

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