Today’s Investor
By THOMAS E. O'HARA
Chairman, Board of Trustees
National Association of Investment Clubs
Q. Why would one stock sol
for more than another, althougl
the latter’s earnings per share Ji
higher? I cite Control Data anc
Sperry Rand. Control Data cost!
more, but Sperry Rand earn:
more.
A. Your question is a very gooc
one and illustrates a very funda
mental fact of life in the stock
market. In the long run, the sin
gle most Important factor deter
mining the price of a stock is its
earning power—the earnings per
share generated by the corpora
tion.
Quite commonly, the stock of
an industrial company will sell
at 10 to 15 times earnings. That
is, a stock earning $5 per share
per year will sell at $50 to $75 a
share.
Shares of a company with a
record of growing faster than
others, or seeming to have pros
pects of doing so, may sell at
an even higher price earnings
ratio. When enthusiasm for the
stock subsides, the number of
people willing to pay high price!/
earnings ratios shrinks and the
price of such a stock falls rapid
ly
Right now Control Data is
selling at around $ioo a share
while its earnings are only about
$1 per share. On the other hand,
«£frry l*and is selling at around
$36 and has earnings of $1.75
per share. Thus it seems that
Sperry Rand ls the better buy.
Both companies have had prob
I Jems in the recent past, but both
seem to have overcome these and
appear headed for better days.
It would appear that the peo
ple who are buying Control Data
are basing their decisions more
on what they hope the future
will produce, while Sperry Rand
buyers are basing their price
more on present earnings. A num
ber of security analysts, how
ever, expect both companies to
improve earnings by about the
same amount in the coming year.
Q. In a recent column you rec
ommended buying shares in
growing companies that are put
ting a good slice of their profits
back into new plant equipment
and inventory. How can one tell
which companies these are?
A. First, to find a rapidly
growing company, you can check
the .Standard & Poor’s invest
ment listings at a broker’s office
or your library. By skimming
through these you can find firms
whose sales have Increased 75
per cent or more in the last five
years. These will definitely be
rapidly growing companies.
Once you have found them,
check their earnings per share
for the same years. If earnings
have increased at about the same
percentage as sales, you have
found a company with a good
earnings record. It is an easy
step to next determine what per
centage of earnings is being paid
out in dividends.
Also, the Standard & Poor’s ;
Rainbow Girls
Hold Meeting
The Kings Mountain Assembly
No. 50 Order of Rainbow for
Girls held a meeting Tuesday,
July 18 with a program honoring
Past Worthy Advisors of the as
sembly. Those advisors attending
were Mrs. Diana Allen, Miss Lib
by Alexander, Miss Joyce Dixon,
and Miss Ann Sanders.
The assembly’s Mother Advi
sor, Miss Helen Logan, presented
the grand cross of color for serv
ice rendered to the assembly, to
Camille Leonard and Ann San
ders.
After the meeting, refresh
ments were served in the dining
room of the Masonic Hall.
sheet, or other reporting service,
will give information about the
new capital investments made by
the corporation each year, so you
can tell if the firm is building
new plants and adding to its
equipment, or just piling up
money.
A convenient way of studying
an individual company is outlin
ed in NAIC’o Investment Club
Manual, available by mail for
S3.00.
Have you a question about in
vesting? Mr. O’Hara, editor of
the monthly magazine, ‘‘Better
Investing”, and one of the na
tion’s recognized authorities, will
answer as many as possible in
his column or by personal mail,
hut must limit questions to those
af more general interest. Corres
pondents will receive a free copy
>f “Better Investing”. Write to
r. E. O’Hara, National Associa
tion of Investment Clubs, Dept.
3, Box 1056, Detroit, Mich. 48231.
There Is No Short Cut
III jjte&tjjS 3 i Sljik p
7* 7 »
Gov. Moore Wants
Emphasis On Safety
North Carolina is Joining the
nation in observance of National
form Safety Week, July 23-29.
Gov. Dan (Moore has called on
Tar Heels to place increased em
phasis on safety. “I am pleased
to call attention of the citizens of
North Carolina to the vital im
portance of agriculture to the
economy of North Carolina, the
nation and, indeed, the world,”
Gov. Moore said.
He added, “Whatever diminish
es or impedes the efficiency and
productivity of our farms is,
therefore, detrimental to men
Boy Scout News
Troop 92 Boy Scouts met at 7
p.m. Monday night with good at
tendance.
Adrian Beam drew a picture
of the Scout Badge and what it
means for the pre-opening. Billy
Talbert had the opening with a
flag ceremony. Steve Cook led
the troop in a compass game.
When the Scouts reassembled,
patrol corners were held. The
main topic was discussion of the
camp-out set for Friday.
Monday was Board of Review
night: Billy Talbert earned First
Class. Frank Humphries earned
the Aviation and the Cooking
merit badges. Jimmy Amos earn
ed a rowing merit badge. Swim
ming merit badges were earned
by Buddy Oliver, Mike Freeman
and Jerry Valentine. Eddie Brid
ges earned a merit badge in corn
growing.
Ken Culbertson ^
Scribe
and iwomen everywhere, as has
been pointed out in an offic^pjL
proclamation by the Presidentn
the United States. 1
“Since accidents each year kill
and disable many of our farm
people, it pays us to give full at
tention to safety on the farm."
National Farm Safety Week is
one of the programs and obser
vances promoted by the North
Carolina Rural Safety Council.
?‘WONDER-DRUG$
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There is much talk about a
"wonder-drugs” these
days. While it is true that
the drug industry and
medieine have made
tremendous strides in
combatting disease,
nobody should use this
fact as an excuse to put
off a visit to the doctor
and a physical check-up.
See your doctor regularly,
tf he prescribes medica
tion for you, y.ou can be
sure our Pharmacist wHI
give you his test profes
sional service.
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Kings Mountain
Drag Company
Phone 739-2571
CONTINUING WITH NEWLY ADDED SPECIALS AND FURTHER REDUCTIONS THROUGHOUT
■
All Men's Spring & Summer
SUITS
DACRON & WOOLS AND DACRON & COTTONS
34.99 Values.Final Clearance 19.88
39.99 Values.Final Clearance 22.88
49.99 Values.Final Clearance 29.88
69.50 Values.Final Clearance 49.88
These Include Styles Suitable For Year-Round Wear.
Buy At These Rock Bottom Prices.
All Men's f amovs Brand
Sportcoats
23.99 Values.Final Clearance 13.88
24.99 Values.Final Clearance 14.88
26.99 Values.Final Clearance 15.88
29.99 Values.Final Clearance 17.88
34.99 Values.Final Clearance 19.88
45.08 Values.Final Clearance 2938
Entire Stock Men's Famous Brand
i>/ ; . \ v
Dress Pants
Plain or Pleated Fronts — Sizes Up To 50
5.99 Values.HOW
8.99 Values.NOW
7.99 Values.NOW
8.99 Values. NOW
9.99 Values. NOW
18.99 Values..NOW
11.99 Values.. NOW
ALTERATIONS FREE
ENTIRE STOCK LUKES'
DRESSES—SKIRTS—
SLACKS-SHORTS
KNIT TOPS
NOW /
I Price
' THROW RUGS
LONG AND OVAL SHAPED
REGULAR 3.99 VALUES
2.00
CHILDREN S RED BALL
TENNIS OXFORDS
SIZES UP TO 3
RED OR BLUE
3 00 VALUES
1.99
SPECIAL PURCHASE
FOR THIS SALE
MEN'S PERMANENT PRESS
PANTS
80% FORTRELL-50% COTTON
NEVER NEED IRONING
Olive • Blue - Chili - Blown
REGULAR 6.00 VALUE
4.00 Pr.
SIZES 28 TO 38
Special
MEN'S WHITE
SHORT SLEEVE
SPORT SHIRTS
PERMANENT PRESS
DACRON & COTTON
SIZES SM-L-XL
NO. 1 SECONDS
LUXURY
PERCALE SHEETS
Whites and Colon
TWIN BED SIZE
1.44
DOUBLE BED SIZE
1.88
3UEEN and KING BED SIRE
2.88
ENTIRE STOCK BOYS'
SUMMER SPORT
COATS
SIZES UP TO 18
£00
MEN’S PLAIN COLLAR
SOLID COLOR
SPORT SHIRTS
DACRON AND COTTON
PERMANENT PRESS
SPECIAL
1.39 or
3 For 4.00
ENTIRE STOCK
LADIES*
Gowns - Pajamas
Housecoats
% OFF
NO. 1 SECONDS
LUXURY
PERCALE
PILLOW CASES
WHITES & COLORS
44c Each
ALL LADIES’
SUMMER
SHOES
VALUES TO 12.99
NOW
2.88-3.88-5.88
HI QUALITY
BROADLOOM TWEED
NON-SKID BACKS
SIZE 24x60
va
ALL MEN'S SHORT SLEEVE
MANHATTAN
DRESS SHIRTS
425 Value ...
5.00 Value_
6.00 Value_
125 PAIRS MEN'S
DRESS OXFORDS
AND LOAFERS
Mart All Slue But Not
IbEtwt strh
VALUES TO 15.99
5.88 Pair
ENTIRE STOCK MEN'S
Manhattan & Mo«rrU Casual
SPORT SHIRTS
3.W Value .... 249
5.00 Value — 2.99
1&00 Value .... 3.99
FULL AND TWIN SIZE
TUFFEED .FEE-SHRUNK
BEDSPREADS
Tlwrt Smt Need Ironing.
SUGHT IRREGULARS OF
VALUES TO 9DO
45** Unbleached
DUVQT LINING
20c Yd.
m
ALL GIRLS' -
Sportswear, Shorts, Knit, & Tops ..... i Price
a __
Ladies' 6.00
Red Ball Canvas Oxfords.346
One Croup Men's Suits.... Vt Price
3.99 to 6.99 Values
Men's Walk Shorts, Now249 to 144
2.99 to 4.50 Values
Boys' Walk Shorts, Now 148 to 248
Boys' 3 to 7 — 2.99 to 3.99 Valuw
Shirt & Short Sets.. New 1J8&244
Little Boys* 3 to* — Were 2.50
Walk Shorts ...
NovA.44
Boys'2.00 Shortie Pajamas_144
Boys'Beg. 200 White Shirts 99c
Were 1.99 to 3.99
Boys' Sport Shirts.. Now 1.44 to 2.44
Ladies' CAROLINA MAID
Cotton Dresses...
ALL MEN'S « ROYS* ..
Swim Tranks.....
Men's LOO
Dress Shirts
All Girls*
Gowns & Pdj*mas
144 & 188
i ■■■-}' -. - V:..
■' . y •' -u v.1 y> j
.... Vz Price
NowL88
Yt ftjee
" i Til.