Q–A recent death in our family left my wife and me with 500 shares of Viacom Inc. Class B shares. Should we hold or sell? I’ve taken your recommendations on past occasions with good results.
A– Who said entertainment was all fun and games?
Viacom Inc., a diverse entertainment company carrying a heavy debt load, has been feeling the pinch of weaker sales at its Blockbuster video stores and is attempting to contain costs there.
In addition, following a fierce two-year court battle, it recently agreed to the $1.7 billion sale of its 50 percent stake in the USA Networks cable television partnership to Seagram Co.’s Universal Studios.
Based on a wide variety of opinions about its prospects, Viacom Class B shares currently rate a consensus “weak buy” recommendation from the Wall Street analysts covering it, according to the Boston-based First Call Corp. That includes five “strong buys,” six “weak buys” and 12 “holds.”
Among analysts willing to take a stab at Viacom projections despite all its changes, a strong 15 percent annual growth rate is predicted over the next five years. That compares to 5 percent industrywide.
The company, 67 percent-owned by National Amusements, is benefiting from strong performance of its MTV networks. Its Paramount Pictures subsidiary will reap profits from syndicating the TV show “Frasier.”
Besides advertiser-supported cable services, such as MTV, Viacom distributes television series, feature films and television specials. It operates cable-television systems and publishing units Simon & Schuster, Macmillan and Prentice Hall.
Q–We have 100 shares of the Stutz Motor Co. of America Inc. Does the certificate, dated 10/19/37, have any collectible value?
A–There’s still some fuel left in that handsome certificate. While this maker of prestigious automobiles gave up the ghost shortly after the certificate was issued, collectors remain interested.
Stutz Motor Co., incorporated in Delaware with offices in New York City and Indianapolis, was declared insolvent in March 1938 and its assets were sold the following October. It left no equity for stockholders and bondholders were not paid in full.
If your certificate is in good condition, it could bring $300 at auction. At the very least, a dealer would buy it outright for $100, estimated Robert Fisher, president of a stock-search firm.
For investors seeking the value of other certificates, Robert D. Fisher & Co., P.O. Box 2102, Cliffside Park, N.J. 07010, researches and evaluates inactive, closely held and extinct stocks and bonds. Along with a check for $50 for each search, the certificate owner must provide either 1) a copy of the face of the certificate, or 2) relate the exact name of the company, state of incorporation and date of certificate. Fisher’s telephone/fax number is 201-945-0080.
Q–Last year my stockbroker convinced me to buy into Ivy International Fund and Ivy Global Fund. I never see anything in print about these. What’s your opinion?
A–There can be big differences in the siblings within fund families.
Ivy International Fund, investing only in foreign stocks, has a stellar track record. But Ivy Global Funds, whose world stock portfolio includes the United States, has been nothing to write home about.
The $2.8 billion Ivy International Fund was up 27 percent over the past 12 months to rank in the top 20 percent of foreign stock funds. Its three-year annualized return of 16 percent places it in the top eight percent of its peers.
Closed to new investors last April because it was growing so rapidly, Ivy International is run by veteran manager Hakan Castegren. He emphasizes value investing in companies of the more developed nations, with his greatest concentrations in the United Kingdom, Switzerland, France, Japan and Sweden.
On occasion, however, he chooses a stock of an emerging country if he sees potential, as in the case of top holding Lukoil of Russia.
Other holdings are Sweden’s Skandia Foersaekrings, the UK’s SmithKline Beecham, Hong Kong Telecommunications, Russia’s United Energy Systems, Royal Dutch Petroleum, Japan’s Matsushita Electric Industries, Japan’s Fuji Film, Sweden’s AGA Class B and Hong Kong’s China Light & Power.
Returns of the $26 million Ivy Global Fund aren’t world-beating. It was up 16 percent over the past 12 months to rank in the lowest 10 percent of world stock funds. Its three-year annualized return was 10 percent, placing it in the lower 15 percent of comparable funds.
Having one-third of its portfolio in the troubled Pacific Rim and only 11 percent in the booming U.S. and Canadian markets kept recent Ivy Global returns near the bottom of its peers.
“Ivy International is a great fund with spectacular performance,” concluded William Whitt, analyst with the Morningstar Mutual Funds investment advisory. “But while there are a lot of very good global funds, Ivy Global doesn’t currently rank as one of them.”
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Andrew Leckey, an anchor on the CNBC financial cable television network, answers questions only through the column. Address inquiries to Andrew Leckey, “Successful Investing,” Suite 367, 76 N. Maple Ave., Ridgewood, N.J. 07450 or by e-mail at successinv@aol.com.
