Portfolio
Out of the red
Nephew Wilde
I feel more encouraged this week with the general appreciation of the shares in my portfolio. However, I do have my doubts, in an atmosphere of industrial unrest, that there will be much more scope for an upturn in the market over the next few months. This means that I shall have to be far more selective in my purchases, though most of my existing portfolio is well suited for the present climate.
One share I had particular reason to be pleased with is Siebe Gorman. The excellent results last week sent the share price soaring, Perhaps Mr Eric Goldschmidt (Letters, July 15) might take note of this. And perhaps Siebe Gorman's performance will satisfy him that I did not have my eyes closed when I searched for a situation well placed to benefit from the North Sea oil boom. He might also take note, that it is hardly relevant from an investment angle to mention the unquoted companies now operating in Aberdeen such as Schlumberger's and Peter Cameron.
To touch on another of Mr Goldschmidt's points, I should add that a visit to the Diver's Bar did not blind me to the speculation in property in Aberdeen. The very day of my visit, in fact, a plot of land was sold at a record price. And when I mentioned this to Wotherspool he did say Scottish Metropolitan Properties, with 10 per cent of its property in Aberdeen, would be a beneficiary.
While on the subject of the North Sea, I did have strong words with Wotherspool. His firm had produced a lengthy document which purported to estimate the effects on certain companies' earnings should oil be found on concessions in which they hold stakes. When I accused him of trying to generate business on the most flimsy of speculative hopes, he stammered, tried to change the sub ject to a less topical affair and ended the conversation. What amazes me more is that the current fever over oil follows so closely on the Australian mining boom. I sometimes wonder why the Government, which could close down gaming clubs as it did mine, much to my own chagrin, never examined the casino-like activities on the stock market! However, this is hardly my worry. But I would emphasise that I do try to select my shares on sound investment criteria. This week's purchase of Brown & Tawse certainly falls into this category.
The group stood up well to the recession in the steel industry as is well illustrated by last year's record turnover and profits. Also for the current year the chairman of this stockholding group, Mr S. D. Rae, views prospects with optimism. In the first quarter sales were up on the comparable period and Mr Rae reports that the Government measures to stimulate the economy are beginning to take effect, Brown & Tawse has a wide range of interests in steel and tube products. Its activities are also widely based but it is not irrelevant to mention the Scottish business. This is excellently placed to take advantage of the strong demand from the North Sea oil industry since though many products are supplied straight from the mill, there will always be a call for a stockholder able to supply at a moment's notice.
Apart from the stockholding business Brown and Tawse has a plant hire company and in Dundee an ironmonger side. I find it surprising that the shares are selling at only thirteen times last year's earnings and feel the market will soon grasp the attractions. I am selling my 'holding in Amey to finance the purchase.
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