CHAPTER 13A Comparison of Four Listed Companies
In this chapter we should like to present a sample of security
analysis in operation. We have selected, more or less at random,
four companies which are found successively on the New York
Stock Exchange list. These are eltraCorp. (a merger of Electric
Autolite and Mergenthaler Linotype enterprises), Emerson Electric
Co. (a manufacturer of electric and electronic products), Emery Air
Freight (a domestic forwarder of air freight), and Emhart Corp.
(originally a maker of bottling machinery only, but now also in
builders’ hardware).* There are some broad resemblances between
the three manufacturing firms, but the differences will seem more
significant. There should be sufficient variety in the financial and
operating data to make the examination of interest.
In Table 13-1 we present a summary of what the four companies
were selling for in the market at the end of 1970, and a few figures
on their 1970 operations. We then detail certain key ratios, which
relate on the one hand to performanceand on the other to price.
Comment is called for on how various aspects of the performance
pattern agree with the relative price pattern. Finally, we shall pass
the four companies in review, suggesting some comparisons and
relationships and evaluating each in terms of the requirements of a
conservative common-stock investor.330- Of Graham’s four examples, only Emerson Electric still exists in the same
form.ELTRACorp. is no longer an independent company; it merged with
Bunker Ramo Corp. in the 1970s, putting it in the business of supplying
stock quotes to brokerage firms across an early network of computers.
What remains of ELTRA’s operations is now part of Honeywell Corp. The firm
formerly known as Emery Air Freight is now a division of CNF Inc. Emhart
Corp. was acquired by Black & Decker Corp. in 1989.