Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, Mar 2 1992 Date: Mon, 2 Mar 92 05:57:42 EST Message-ID: 03-02 0000 DECISIONLINE: Personal Investing USA TODAY Update March 2, 1992 Source: USA TODAY:Gannett National Information Network KEEP AN EYE ON PERELMAN: Ronald Perelman is on a roll, and so are investors buying into his deals. In the past year, Perelman-controlled companies have had initial public offerings in shares of comics powerhouse Marvel Entertainment and medical-tests company National Health Laboratories. Both stocks surged, bringing big profits to Perelman and investors who bought after the initial public offerings. (For more, see special Perelman package below.) DOW ENDS WEEK WITH LOSS: The stock market posted a small loss Friday after an early advance faded. The Dow Jones average of 30 industrials, up more than 12 points at mid-afternoon, closed with a 1.78-point loss at 3,267.67. That left the average with a net drop of 12.52 points for the week. Losers just edged winners on the New York Stock Exchange, where 202.13 million shares changed hands. AUTO STOCKS AMONG WINNERS: Investors last month continued January's trend of buying stocks of companies that will benefit from an economic rebound. Stocks of companies that should pull in higher revenue and earnings when consumers begin to spend again - automakers, entertainment, department stores and household furnishings and appliances - were winners last month. GROWTH STOCKS SOLD: Stocks of companies that should benefit from any rise in industrial activity also were hot, including heavy-duty trucks and parts and hardware and tools. As investors scooped up those stocks, they sold stocks of companies that usually grow even during recessions, known as growth stocks. Among the lagging groups: Medical products and supplies, food producers and health care. BETTER GROWTH FOR THE ECONOMY: The economy grew at an annual rate of 0.8% last quarter, slightly stronger than the 0.3% rate first estimated, the Commerce Department says. But a large part of the increase in gross domestic product - the total output of goods and services - was from a buildup in inventories. Analysts say bigger inventories could mean a cut in output this quarter as businesses try to cut the backlog. RATES CONTINUE HIGHER: Fixed mortgage rates rose to their highest level in four months last week, according to the Federal Home Loan Mortgage Corp. The average rate on 30-year mortgages was 8.83% last week, up from 8.82% a week earlier. One-year adjustable-rate mortgages averaged 5.93%, vs. 5.92%. MORTGAGE PAYMENTS INCREASED: More homeowners are adding money to their regular mortgage payments, attempting to build home equity and save interest expenses by paying off loans faster. Countrywide Credit Industries says about 14% of the loans it services include additional principal payment each month, up from about 10% two years ago. At Bank One Mortgage, about 7.4% of customers are adding money. GOLD, SILVER POST SMALL LOSSES: Gold and silver posted small losses on the New York Commodity Exchange Friday. Gold for current delivery closed at $353.00, down 90 cents from late Thursday. A late bid at New York Republic National Bank quoted the metal at $353.50 an ounce, unchanged from late Thursday's quote. Silver for current delivery fetched $4.100 per troy ounce, down from $4.103 late Thursday. SPECIAL PACKAGE ON PERELMAN: LATEST DEAL A SUCCESS; Last Wednesday, Ronald Perelman began cashing out on another of his 1980s corporate raids - with the same success. Coleman, synonymous with coolers, lanterns and other camping gear, issued 4.3 million shares at $19 1:2 each. They closed that day at $25 1:8 - a 29% gain in one day, or a quick paper profit for Perelman of more than $100 million, based on his 84%, 22.8 million-share stake. ANALYST STILL LIKES COLEMAN: Having missed the initial surge, investors might be tempted to shy away from Coleman shares. Prudential analyst Robert Fetch likes Coleman, partly because of the changes in management Perelman has made since buying the company in 1989 for $545 million. Perelman revitalized management and improved productivity and profitability by closing some plants and upgrading others, Fetch says. REVENUE IS UP: Coleman's administrative costs are down and marketing efforts abroad are up. Foreign revenue grew 24% last year to $73.9 million. Meanwhile, U.S. revenue grew 21% to $279 million. And "with a name like Coleman, they should be able to extend product lines with ease," says analyst Mark Basham. He says earnings per share should grow 15% to 20% annually the next several years. GO FOR IT IF AGGRESSIVE: Discount-store giants Kmart and Wal-Mart account for about 25% of Coleman's U.S. revenue. Some observers warn that kind of clout could force Coleman to cut margins for those retailer. Fetch, however, says the retailers need Coleman as much as Coleman needs them. Basham recommends that aggressive investors accumulate shares of Coleman but warns against expecting another burst. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3267.67, after closing down 1.78 Friday. The New York Stock Exchange composite opens at 228.21, down 0.54. The American Stock Exchange market value opens at 416.09, unchanged. The NASDAQ OTC composite opens at 633.47, down 0.48. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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