Financial Queries

September 15 1929

Financial Queries

September 15 1929

Financial Queries

Question—I would greatly appreciate any information you are able to give me about the De Havilland Aircraft of Canada, Ltd.—A.I.O., Toronto.

Answer—The De Havilland Aircraft of Canada, Ltd., will work closely with the De Havilland Co. of England. It has taken over a 70-acre aerodrome on which it is purposed building a plant to manufacture planes. The head office is in Toronto, and the officers and directors are as follows: R. A. Loador, General Manager and Managing Director; Wm. Zimmerman, Secretary; W. R. Parker, K.C.; J. H. Black and A. S. Butler, Chairmen of the Board. The company is capitalized at $500,000 seven per cent cumulative preferred, $300,000 outstanding, $100 par and 25,000 shares of no par value class “A” common and 5,000 shares of par value class “B” common outstanding. The industry, of course, is comparatively new, and it is difficult at this stage to form a true estimate of its possibilities, that is, of an individual company, although the industry as a whole is bound to expand. De Havilland seems to be well established and ably managed.

Question—I am interested in Alberta oil stocks and would appreciate your advice on Baltac Oils which has been recommended to me as an attractive speculation.—E.M., London, Ont.

Answer—The Baltac Oil Company has a small acreage in the heart of the Turner Valley field, Alberta, immediately west of Home Oil Company’s operation. You may recall that Home Oil brought in one of the gusher wells of the Valley last February which has continued to produce at the rate of 600 barrels of naphtha daily. The proximity of Baltac to this producing area renders its outlook particularly interesting. So far Baltac has not reached the production stage, but is now drilling and it will be a matter of several months before results can be expected. The stock is quite speculative, of course, but is not lacking in possibilities for a reasonable hold.

Question—Dominion-Scottish Investment has been referred to me as a sound investment. Please give me your opinion. I am holding some TeckHughes and am undecided whether to sell or hold on. What would you advise?—Dr., St. Catharines.

Answer—The Dominion-Scottish Investments, Limited, has been formed under favorable auspices, and its sponsorship appears to be sound. Of course it is a new enterprise, and has its way to make; consequently one cannot speak positively as to its future possibilities, but I am of the opinion that its shares offer an attractive investment medium for the business man.

The Teck-Hughes situation is quite promising, and I feel that there is a reasonable prospect of substantially higher prices in due course. The mine is developing in an important way at the lower levels, and there is a likelihood that production will be increased to some extent in the near future.

Question—Kindly give me some information on a firm called the Blue Ribbon, Limited and your opinion as to the investment merits of preferred stock of this company —Mrs. J.R.C., Calgary.

Answer—The Blue Ribbon, Limited, imports, blends, packs and distributes tea, coffee, spices, essences and allied products under the trade name of Blue Ribbon. It has warehouses in Winnipeg and Vancouver and others leased in Edmonton, Calgary and Victoria. The company was incorporated in 1928 to acquire the capital of a company of the same name incorporated in 1910. The head office of the company is in Winnipeg. The preferred stock is paying dividend at the rate of 6^ per cent per annum, and the stock is convertible into common share for share at the option of the holder. At the present time a dividend of $2.00 per share is being paid on the common stock. Earnings are well above dividend requirements, and the preferred seems to be reasonably well secured.

Question—I have recently heard Ventures, Limited, referred to as a promising speculation. I would be glad if you would supply me with detailed information as to its capital structure, organization and general outlook.—Dr. A.C., Winnipeg.

Answer—Ventures, Limited, is a member of the Lindsley organization of mining operations. The Lindsley brothers are mining engineers who are probably outstanding in their activities in the Canadian mining field today. They are interested in a dozen or more companies, notably Sudbury Basin, Sherritt-Gordon, Falconbridge Nickel and others. Ventures is their latest creation, and it controls Falconbridge Nickel and has a large share interest in all the other operations of this enterprising group. Ventures, furthermore, has property interests in all the newer fields in Manitoba, Ontario, and Saskatchewan, and has property holdings in United States, Norway, Sweden, Russia, and large financial interests in some of the South African copper mines, notably Bwana-M’Kubwa, Roan Antelope, and others. This investment is showing the company a very handsome profit. Recently, Ventures purchased a nickel refinery in Norway, and is prepared to refine the concentrates from Falconbridge Nickel in Europe, close to the market for the product. Ventures is not yet producing, but it stands to benefit from all the activities of the Lindsley organization. It is rather heavily capitalized, 10,000,000 shares authorized and over 6,000,000 shares issued, but I feel that in view of its important associations it offers attractive speculative possibilities for a hold. I do not anticipate any quick action in the stock, but one who is prepared to wait on it for two or three years should be well rewarded.

Question—I am an old subscriber to MacLean’s Magazine and have now taken it regularly for some years. I am always interested in your financial section and read it through very carefully. The result is that I have decided to ask your advice. Up to the present I have never attempted to invest any surplus cash on any systematic plan, but after reading your interesting article in the issue of June 15,1 have decided to do so. I am a teacher and in the ordinary way would have from $50 to $75 a month for investment. If it is not troubling you too much, therefore, I would appreciate it very kindly if you would please suggest a method of safe investment which would bring from five to six per cent interest. Perhaps you would also suggest the name of some investment banking house with which I could do business. I realize, of course, that with such a comparatively small surplus for investment, many financial firms would not wish to be bothered with ‘ it.—D. H.L., Saskatchewan.

Answer—I am of the opinion that if you religiously follow the plan you propose for the next few years you will be more than satisfied with the results. Your first problem is to form a connection with an investment banking house, which will handle amounts of the relatively small figure you name. I would suggest that you correspond with one or other of the houses whose advertisements appear in MacLean’s Magazine. I would suggest further that you write to them and ask for specific recommendations and endeavor to open an installment account with them. This should be easily arranged. There is a wide range of securities offering a yield between five and six per cent, but I would prefer to leave any specific recommendations to the investment banker. I would be glad, however, to run over a list that may be presented to you and give you my opinion. I would suggest that you ask to have your name placed on their mailing lists in order to receive their monthly security manuals. These contain a list of all the prominent issues and will give you a good idea of what is on the market and relative prices and values.