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Weak earnings momentum and the maturation of traditional markets have led the publishing industry stocks to underperform the market and be ranked low on the timeliness scale. However, many book and periodical publishers have turned to electronic publishing and new media as alternate revenue sources and the textbook sector remains bright for educational publishers. There are several good selections for investors in publishing stocks, although prospects for the industry as a whole are uncertain.

The retail (special lines) industry is comprised of a wide variety of subgroups and companies that cannot be analyzed and evaluated as a broad category, and these stocks must be individually evaluated. Results for the holiday shopping season in 1998 were satisfactory for most retailers, and the US economy is poised for growth in 1999 which augers well for the retail industry. These stocks are not strong in 1999 and investors need to be selective both for the short and long term.

There are varied prospects for the retail store industry in 1999 with increased market share gains for the discount store sector and mixed results foreseen for the department store chains. Efforts to improve marketing through the Internet are being taken by many companies in this industry, either through acquisition or internally. These stocks have outperformed the market for the past several years after a weak 1994 and 1995, but their potential for appreciation for the next three to five years is not great.

The soft drink indsutry grew by 7% during the 4th qtr of 1998 and by 6% or better for the year in North America, but shipments were flat for the foreign market due to uncertain economic conditions. Competition growth for the US fountain business, worldwide industry consolidation, and the developement of new flavors were other trends in 1998. Earnings shortfalls have made these stocks less timely in 1999, but prospects for growth through the years 2001-2003 are good.

The household products industry is consolidating during the late 1990s so companies can compete abroad and in the US through good strategic fits. Top-line growth, which has flattened, could also be accelerated through acquisistions by larger-capitalized firms, but the industry needs to increase its foreign operations. These stocks are not timely in 1999 and there is little potential growth for the next three to five years for the industry.

Capacity and comparable-store sales gains have become two of the major indicators of financial health within the restaurant industry, but these data can also be misinterpreted by investors. The shift toward quality, as opposed to price, has also become a major industry trend, and some operators do not engage in discount pricing in order to attract customers. International growth, quality themes, and timeliness are some of the items which investors must seek in these stocks.

The maturing of traditional markets is the single greatest issue facing publishing in the late 1990s, and industry expansion can no longer be the focus for higher tock prices. However, technology, such as on-line services, CD-ROMs, videos, and other forms of electronic publishing are being sought by both tradtional and non-traditional publishers. The future for these stocks is not certain and investors must be selective in their choices.

Consumer confidence in the US has decreased somewhat during the 3rd qtr of 1998, but interest rate cuts by the Federal Reserve Board should keep the economy going and a recession seems unlikely. Success in the retail industry in the 4th qtr of 1998 will depend on execution and the 1998 holiday shopping season, although some retail sectors are mixed. Investors need to focus upon growth companies for their selections.

More moderate consumer confidence and warmer-than-usual weather were the key factors in lower-than-expected same-store sales at many US department stores during the 3rd qtr of 1998, but share advances are expected through the years 2001-2003. Market share for discount stores sich as Family Dollar Stores and Dollar General continue to expand, as well. Investors need to evaluate individual stocks before selection.

Sales trends outside North America for the soft drink industry have been volatile in 1998, due mainly to the economic turmoil in Latin America, Asia, and other major markets. The growing competition for the restaurant and fountain business, especially between Pepsi and Coke, and new developments in soft drink flavors are the most notable industry trends. These stocks are untimely in 1998, but have excellent prospects through the years 2001-2003.

The household products industry is viewed as defensive by many investors due to mounting international economic problems and uncertainty as to the growth prospects of the US economy. The larger companies in this industry are able to deal with mass merchants on an even-handed basis, but many smaller ones may need to merge or form joint ventures. Investors need to be selective when evaluating opportunities in this industry.

Home meal replacement is the latest version of take out that restaurants are offering. It is too new a concept to discern whether it will be successful. There seems to be too high a supply of restaurants in relation to the demand. The abundance of single person households, the lack of time and the different schedules and food habits of families have caused restaurants to offer consumers an alternative to cooking their own meals. Each restaurant must be reviewed to discern whether it is a good investment.

The maturity of traditional publishing markets is the single most important question facing the industry in the late 1990s, and industrywide expansion can no longer be relied upon for earnings. However, periodical and book publishers have been seeking alternative markets, and textbook publishers will be helped by increased educational spending. Few publishing stocks are timely and the industry is expected to underperform the market in 1998.

The outlook for the 1997 holiday shopping season is good compared to 1996 with higher consumer confidence due to a higher minimum wage, continued personal income growth and low unemployment. The selling environment for books, video games, toys, consumer electronics and soft lines is also good in 1997 and this should continue through 1998. Investors must select stocks in this industry that are timely for both the near- and long-term.

Future prospects for the retail store industry are mixed, especially for department stores where women's apparel sales have been weak in 1997. The outlook for discount stores is better, however, as they continue to gain a greater share of the market. Retail stocks have outperformed the market in 1996 and 1997 after a weak 1994 and 1995. Investors must consider individual stocks, as the industry is unattractive for the next three to five years.

Volume for the soft drink industry in the US rose about 6% during the 3rd qtr of 1997, and about 6% for the year to date. Competition at the retail level has also increased during 1997, especially for PepsiCo and Coca-Cola, and there also has been increased sales growth in 1997 for the non-colas. Industry prospects for the long term are excellent, although PepsiCo and Coca-Cola are forecast to lag the market in 1997 and 1998.

Large companies in the household products industry appear to have an advantage, as consumers do more of their shopping at mass merchants such as Wal-Mart Stores Inc. The smaller companies are more flexible, but the demand for lower prices causes erosion of margins, and savings of scale become important. Giants like Procter & Gamble find it necessary to grow by acquisition to compete in the global market.

The large, traditional print markets, where most of the publishing industry operates, have not had earnings growth and revenue expansion, and demand for traditional printing has not grown, as well. However, publishers of periodicals and educational materials have some financial momentum and are expected to enjoy good markets. There are several stock selections that many investors will find worthwhile, in spite of uncertain industry prospects.

Financial results for special lines retail stores are as mixed as the numerous types of stores that make up the industry and although sales were good in February and March, 1997, they slowed considerable in April. Many sectors, even those doing well, are not likely to show much improvement and will have slow growth rates. Investors should seek companies with high growth potential or those that cater to price-conscious consumers.

Some investors, fearful that US stocks are overvalued, are looking at foreign markets. It is questionable whether gains in some countries are sustainable however. Some funds that trade in foreign securities are attractively priced, despite political problems and business slowdowns. The countries that could provide attractive returns include South Korea, Thailand, Malaysia, Germany, and Taiwan.

The restaurant sector, taken as a whole, would not appear to hold much promise for investors. But individual stocks within that sector could prove exciting. For the overall industry, comparable-unit sales have been flat or slightly lower. High costs are also a matter of concern to the industry. Chicken prices are high, and higher feed costs could ultimately result in higher beef prices.

Publishing industry securities are notorious for their poor timeliness ratings and their market underperformance and these securities are expected to do so in the immediate future but show signs of being a good long-term investment. Besides being a safe investment, publishing industry earnings will receive a boost from diversification into such areas as computer software, television and Internet. A levelling off of paper prices, which has been publishers' biggest cost woe, should make publishing industry stocks more desirable.

The forecast for the 1996 Christmas shopping season is good with high consumer confidence levels, along with the factors of supply and demand. However, specific retailers may have problems in 1997 since a slowdown in the US economy is expected, and consumer confidence and spending are not likely to be maintained. Investors in 1997 must carefully select those retail stocks with well-defined opportunities and proven records of success.

The environment for the retail industry, especially department stores, has improved in terms of same-store sales and profits in 1996 when compared to 1994 and 1995. Department stores have been accelerating the trend to private labels, as well as changing their merchandise offerings. However, results for discount store chains have been more mixed in 1996. Timeliness for these stocks has increased in 1996, but investors must still be selective.

The growth of huge retail mass merchandisers has placed the household products industry in a questionable financial position where small and medium sized manufacturers may be forced to merge with the giants in order to keep retailers from controlling their production and profits. Even giant manufacturers had their problems with retailers but they seem to have managed these in 1996. Investors should follow the companies who embark on acquisition projects because marketing competition will be increasing.

The construction and mining machinery industries are expected to do well over the next 12 months, from 3rd qtr 1996 to 3rd qtr 1997, as the US economy expands and international markets recover. These stocks have done increasingly well throughout 1996. An investor should be selective because major selloffs may take place at any time.

Low profit margins and losses make it difficult to evaluate cable TV stocks on the basis of current earnings in 1996. Depreciation, debt, and other capital costs must also be considered. The 'Information Superhighway' may bring in revenue, but the size and importance of this market is uncertain. Investors must be cautious and consider a wide variety of factors before selecting stocks in the cable TV industry.

Consolidation has continued in the broadcast and cable TV industry during the 1990s, and there have been a large number of acquisitions at every level. The financial structure of the industry has also become very complex, and it is still far too early to understand the information superhighway market and its impact. Investors must first look at business fundamentals, rather than hype, when purchasing stocks in this industry.

Restaurant industry share prices increased in the 2nd qtr of 1996 after good 1st qtr 1996 earnings. Restaurant chains will be affected by the minimum wage increase under consideration by Congress in 1996, but will be able to pass this on through higher prices. Low ingredient costs in 1995 and 1996, which could increase in 1997, have helped restaurant finances. Many stocks are timely in 1996, and several have potential for 1999-2001.

The lack of new hotel construction is dissipating the hotel room glut of the 1980's, and hotel occupancy and prices are increasing. Market brand names are important for hotels in terms of customer perceptions, and several hotel chains are also expanding into related areas. Profits for casinos are good in Atlantic City, NJ, Las Vegas, NV, and other markets due to high demand. There are several timely stocks in the hotel/gaming industry for investment.

Conglomerate corporation securities are a traditionally high attraction to many investors and while many have proved to be profitable, care must be taken in selecting the right companies in which to invest. Investors who anticipate purchasing conglomerate stocks at relatively low prices and cashing in when the corporations restructure or spin off sections, must be aware as to the profitability of all of a conglomerates operations before investing.

Returns on most single-country closed end mutual funds were negative for 1995. The European stock markets have been weak with currency problems, political scandals, and a slower economy. Latin American and Asian-Pacific funds have performed poorly due to inflation, slow economic growth, and other problems. Asian and Pacific Rim funds should be avoided, but several European funds may offer good discounts for the patient investor.

Ratings rose for cable TV and fell for broadcast TV during 1995, due to the departure of older viewers and rejection of new shows by younger viewers in the broadcast field. The media industry is still consolidating, although the effects of this are unforeseen. Earnings for the industry for the next three to five years are unpredictable, but there are some short-term trading opportunities for merger-related stocks.

Publishing is a mature industry and growth has become more difficult. Expected revenue growth for 1996 is 6%, which is below 1995. The textbook market is expected to weaken, and postage and paper costs are also putting pressure on margins. New markets, alliances, and acquisitions will enhance operations in the next three to five years. Several stocks are worthwhile investments, although this is not a timely industry.

There is good earnings growth for conglomerate corporations, mainly due to cost cutting, although sales are less impressive. Much of the restructuring has been in variable, rather than fixed, costs, and investors must be wary of any announcements. Investors must evaluate these stocks carefully, even though conglomerates perform well during economic uncertainty. These stocks are only moderately ranked for timeliness in 1995.

Household products historically have been defensive, with relatively stable profits compared to other industries. Uneven earnings have changed the appeal of these stocks, however. Hard goods, such as small appliances, and soft goods, such as toothpaste and soap, are the two main subgroups of this industry, both of which are seeing less demand. Investors in this industry need to evaluate these stocks on an individual basis.

Stocks in publishing and printing experienced a poor year in 1994, and 1995 is not expected to see improvement even though several magazine and text-book publishers should do well. The increasing price of paper and reduced volume forecast a poor year for financial printing. Few of the stocks in this group are expected to do well in the next 12 months, although many will offer investors long-term growth opportunity.

Investors looking to invest in media stocks will find much competition among companies aiming to eventually offer their customers similar services. Cable firms are laying fiber optic to offer interactive services, as well as 500 channels of television programming. Telephone companies have more financial clout and will soon join the competition, along with direct broadcast satellite systems. Customer demand for so much television programming remains doubtful, so these firms may fare better over the long term.

Investment in foreign funds may be more timely in 1995, due to expanding Pacific Rim markets and a more stable political climate in Latin American countries. However, the US funds may also be a good investment, after many firms have undergone streamlining efforts and inflation has remained now low. Japan has been affected by the strong yen and is still reeling from property value inflation, despite declining prices.

Most publishing firms lost value in 1994, due to a weak economy. Revenues rose a meager 3.7% in 1993 and 1994, earnings are expected to rise, due to streamlining efforts. The publishing industry is considered a mature industry, and will grow only modestly in the 1990s. A few companies will outperform the others, especially textbook publishers. Economic activity should increase in 1995, giving advertising and publishers a boost.

Diversified companies as a group are attractive to those investors who remain skeptical of the market, but in 1994 the market is improving and investors are more confident of the market direction. However, there are still opportunities in this sector. Some firms have found strategies to boost profits despite lackluster earnings by spinoffs, bust-ups, buybacks and other tactics. Investors look to clever CEOs to lead the way.