Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1916-01-24
OLAA PROVING
BIG PUzzLEOF
LOCAL STOCKS
Comparison of Standing With
Onomea:: big Men, Rumor-
ed Trying to "Bear" Market

. At SlI.50 per share the stock of the
OIaa sugar Company Ltd. affords one.
of the puzzles ef the market. Re
peatedly the stock, in. its upward
climb. has halted, then receded under
heavy profit taking sales. always to.
resume its climb under the stimulus
of eager buying, In comparison with
the sale prices OF regular dividend
paying stocks the present price Of
Olaa is difficult Of explanation, from
the standpoint Of what is known to
the. general public. Fl. -.
olsa's Condition. Il.
The condition of OIsa is this: " !" +
The capital stock is 25o,0oo shares,
which at sfl50 per share would repre-.
sent valuation Of s2,S75, 600. In ad,
dition the company has outstanding a
81. 100000 bond issue at s per cent.
which calls for $150.N00 in interest
annually, and has no sinking fund, so
far as is known ... -.
The combined stock and bond valu-
ations total s5,375,000, from which
must he stlbtracted s5S00o0s which is
what current street rllrnor gives as
the amount of cash on hand from last
years operations
r It is generally known that Olaa
made net profit of about $S5n000
mot including depreciation in 1915,
of which $4,000 must have gone to
wipe out the indebtedness which was
shown in the last annual statements,
leaving about s535, 900 on hand. OF.
this latter amount it is known that
from 100000 to s250O00 win be spent
on improvements and engagements to.
the mill which have become absolute
ly necessary. ..~.
May Start Sinking Fund.
The use of the balance of the cash
from last years operations from
$3.50, 900 to $3.50. 000-for dividends
seems scarcely possible. in view OF
the large and heavy interest bearing
bond issue 1t has not been an.
nounced, however. to what use the
surplus will be put. but the general
exrectaticn is that it will he put into
a sinking fund, or used to purchase
bonds for retirement
0laa's sS50,o00 in profits last year
was made on - output of $4,000 tons
of sugar. The 1915 crop, it is report
ed, will probably run around $4,000
tons, with a $4,000 tons output in pros
pect for 1917
Contrasted with this is Onomea's
position, with no bond issue to pay
on or to clear up, stock is
sue of $4,000 shares which at current
prices, SAT, gives a valuation of 49,,
535 900, and with S7f6.000 cash in the
treasury latter paving s450,000 or so
per cent in dividends last year, net
valuation of $1,000 900 If Onemea
pays 80 per cent this year. it yields,
at present prices, more than 5 per
cent on the investment. the par value
being $50, and recent sales being
around SAL.
Onomea in 1916 made net profit OF
$4,000 mot including Depreciation,
on an output of 213n0 tons. though
the estimate was only $1,000 This
years estimate is also 1900 tons.
but the cane is likely to run to 10000
tons or more, and there is $4,000
ton crop in prospect for 1917.
Trying to Bear Market.
Street rumor among those interest
ed in sugar stocks has it that certain
Of the "big men" locally are indulging,
In much head-shaking and in many
doleful prophesies over the future OF
sugar when the war ends, as well as
loud cautions that stocks are now too
high
What basis this may have, coupled
with the rumor that the same pessim.
lists have lately unloaded large blocks
of stocks in the hope of breaking
prices is not definitely known-but it
=
made with the hope of reducing prices
so that they might buy in again at
lower level before Congress takes
final action on the sugar tariff
Pressure of buying orders from
small and large investors, however,
has caused the market to absorb all
with prices climbing up the
scale, and now the big men" are said
to view the prospect of not being able
to buy in" again, except at an ad.
Ill l..