Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Wed, Aug 5 1992 Date: Wed, 5 Aug 92 04:32:44 EDT Message-ID: 08-05 0000 DECISIONLINE: Personal Investing USA TODAY Update Aug. 5, 1992 Source: USA TODAY:Gannett National Information Network SALOMON COMES BACK WITH CAUTION: A year after Salomon Bros. admitted extreme foul play in Treasury-bond auctions, it's clear the company has survived the scandal. But that hardly means investors should gobble up Salomon's stock, especially with business on Wall Street starting to slow, analysts say. "The company is still very much a force," says independent analyst John O'Keefe. (For more, see special Salomon package below.) UNIT DEAL GIVES MONSANTO BOOST: Monsanto stock rose 3 1:4 to $56 3:4 Tuesday on news that it has agreed to sell its Fisher Controls International unit to Emerson Electric for $1.3 billion. Emerson stock fell 1 1:8 to $50, but analysts say the sale likely will benefit Emerson more than Monsanto. The thinking: Fisher Controls should add $1 billion to its annual sales. JWP TAKES A FALL: Stock of JWP fell 2 1:4 to $6 1:4 Tuesday after the company said it overvalued inventory at its information-services division and may have to take after-tax writeoffs of up to $60 million. JWP also announced the resignation of former New York Stock Exchange Chairman John Phelan from its board, effective last Saturday. JWP gave no explanation for the resignation. BERLITZ TALKS MERGER: Berlitz International is talking merger once again, and that sent the stock of the Princeton, N.J-based language-education company up 1 1:2 to $21 Tuesday. That's still below the $25 a share Fukutake, a Japanese publisher specializing in correspondence courses, agreed to pay MacMillan in November. MacMillan has owned Berlitz since 1966. BERLITZ CONSIDERED PRIME BUY: Analyst David Childe of Robertson Stephens considers the $25 a share Fukutake offered for Berlitz a floor and says the price could go higher. The company, which has 310 language centers in 29 countries, has a premier market position, he says. Berlitz won't identify the bidders or say how many companies have submitted bids or at what prices. MCDONALD HIGH ON BURLINGTON: McDonald & Co. Securities recommends buying stock in Burlington Resources, the lowest-cost producer of natural gas in the USA. In June, BR finished distibuting shares of its El Paso Natural Gas, an interstate pipeline company, to shareholders, allowing it to focus on gas and oil exploration and production. Predicted: Earnings will rise 29% from 97 cents a share this year to $1.25 in 1993. OIL PRICES FALL SLIGHTLY: Oil prices fell Tuesday. Light sweet crude oil for September delivery fell 23 cents to $21.35 a barrel; September heating oil fell .73 cent to 59.07 cents a gallon; September unleaded gasoline slipped .20 cent to 59.68 cents a gallon; September natural gas rose 0.4 cent to $1.861 per 1,000 cubic feet. GOLD BARELY MOVES, SILVER FALLS: Precious metals had a slow day. Gold on the Commodity Exchange rose 10 cents to $352.70. Republic National Bank said gold, at $353.00, was unchanged. Gold fell in London to $352.85 from $354.10. In Zurich, the metal fell to $352.15 from $353.90, and in Hong Kong, gold dropped $4.69 to $352.58. On the Comex, silver fell to $3.870, down from $3.875. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3395.94 after closing down 11.08 points Tuesday. The New York Stock Exchange composite opens at 233.39, down 0.27. The American Stock Exchange market value opens at 391.82, up .95. The NASDAQ OTC composite opens at 581.32, up 1.04. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Wednesday. It opens at 0.5207 British pounds, up from 0.5200; 4.9830 French francs, down from 4.9850; 1.4757 German marks, down from 1.4763; and 127.21 Japanese yen, up from 127.20. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) SPECIAL PACKAGE ON SALOMON: SALOMON CAN BID FOR NOTES AGAIN: Last week Salomon received government permission to once again submit bids for clients at Treasury-bond and note auctions. The company's second-quarter earnings, which came in stronger than expected, made clear its comeback. Salomon's securities unit posted pretax income of $647 million, the highest reported by a publicly traded investment bank, analysts say. EVERYTHING IS NOT ROSY: It wasn't all good news for Salomon: Investment-banking revenue, hit by the scandal, fell 16%. Still, the second-quarter results prompted Lawrence Eckenfelder, analyst at Prudential Securities, to raise his 1992 per-share earnings estimate for Salomon to $5 from $4. Salomon no doubt will be around for a long time, but some analysts are turning cautious on the entire industry. SALOMON RATED LONG-TERM BUY: Salomon trades at a price-to-book ratio of 1.2 to 1. That's below its peers in the investment-banking industry. Morgan Stanley trades at 1.6 to 1. Merrill Lynch sells at 1.3 to 1. And Bear Stearns sells at 1.4 to 1. That means Salomon's stock is trading near its liquidation value. Perrin Long, analyst at First of Michigan, rates the company a long-term buy. (End of package.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing editor: Michele Coleman. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. 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