Viewing Month: March 1949

Tabell’s Market Letter – March 01, 1949

Tabell’s Market Letter – March 01, 1949

Tabell's Market Letter - March 01, 1949
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SAN FRANCISCO, CALIF. NEW YORK, N. Y. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EUREKA FRBNO RIVERSIDE SACRAMENTO SAN DIEGO LONG BEACH MODESTO OAKLAND PASADENA SANTA ANA STOCKTON VAllEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 4-4141 The industrial average has now had a double test of the November low and has Succeeded in holding above that level on both February 11th oancdcaFsieobnrsuary 25th while the rail average reached new low territory on both Dow-Jones Industrials DOW-Jones Rails Nov. 30th 170.35 51.69 Feb. 11th 171.03 48.43 Feb. 25th 170,56 46.04 This divergence in the action of the two averages may well mark the end of the intermediate downtrend from the June-July 1948 highs of 193 and 65. At Tuesday'S high of 174.61, the industrials were close to the February 18th high of 175.62 which was the high point of ,the rally from the February 11th low. Ability to penetrate this high would confirm the change in minor trend. However, even if the November lows are penetrated downside, I would not expect much further reaction. Last week, I listed the down- Side objectives of the May-October tops of some leading rail, oil and 'steel issues. The balance of the list is given below. As noted last vleek, the objectives in many casel have been approximately reached Norfolk & Western Northern Pacific Ohio Oil Pennsylvania R.R. Phillips Petroleum Pure Oil Republic Steel Richfield Oil St.Louis-San Fran Seaboard Air Line R.R. Sharon Steel Shell Union Oil Southern Pacific Southern Railway Stand.Oil of Calif. Stand.Oil of Ind. Stand.Oil of N.J. Texas Company Texas Pacific Rwy Union Oil Union Pacific Western Pacific Wheeling Steel Youngstown s. & T. Allrox. 3 1/49 Last 52 1/2 14 1/2 27 1/4. 15 7/8 56 27 1/2 24 3/8 27 9 16 1/4 33 1/2 33 1/2 41 5/8 35 59 5/8 38 3/8 67 1/2 51 1/8 40 27 3/8 81 1/8 24 44 1/8 66 1/2 ObJective 48 14 24 15 52-50 24 23 27-23 7 14 30 31 39-35 34-33 55-50 37 66-62 48 41 24 75-70 22-19 42 66-61 Low 1246-1248 55 14 20 16 51 20 23 13 6 12 24 25 35 28 49 37 62 53 35 20 55a 27 33 54 Low 50 1/8 13 3/4 25 3/4 15 1/4 51 1/2 25 1/4 23 3/8 24 3/4 8 14 1/2 32 31 39 3/8 34 1/8 56 3/8 37 3/8 65 1/2 49 40 25 1/2 77 5/8 22 1/4 42 1/4 63 3/4 Since listing. a- On split basis. March 1, 1949 EDMUND W. TABELL . WALSTON, HOFFMAN & GOODWIN —–

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Tabell’s Market Letter – March 04, 1949

Tabell’s Market Letter – March 04, 1949

Tabell's Market Letter - March 04, 1949
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….;;.,..r– — SAN FRANCISCO, CALIF. NEW YORK, N. Y. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EUREKA. FRESNO RIVERSIDE SACRAMENTO SAN DIEGO LONG BEACH MODESTO SAN JOSE SANTA ANA OAKLAND PASADENA STOCKTON VAllEJO TABEll'S MARKET lETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 44141 Market action continues to favor the probability that the market reached its intermediate term low on February 25th as against the possibility of a further dip into the 170-160 range of the DowJones industrials. There is a large segment of the financial world that expects a lower market before a turn but, in my opinion, the failure of the industrials to follow the rail weakness on two occaSions last month is a sign of a sold-out market condition and indicates a change in the trend. Ability to penetrate the February 18th high of 174.62 would definitely strengthen this conclusion. However, even in the event of new lows, I would not expect the decline to carry much below the February lows. The downside objectives of rails, oils and steels were included in recent letters. Briefly, I believe there is a good probability that we have reached the lows of the move. In the less likely event of a further decline, I do not believe the eventual 10W3 will be more than 5 below February 25th prices. This is in the face of my belief that business and earnings will be lower i 1949 than in 1948. I am repeating below my list of recommended issues. This group has shown, in the main, better than average market action and I believe will continue to do so. Thumbnail sketches of all of these issues are available on request. American Cyanamid American Horne Products Avco . Bendix Aviation Bigelow Sanford Borg Warner Cities Service Commercial Credit Cooper Bessemer Denver & Rio Grande Eastman Kodak Eastern Airlines Electric Power & Light Firestone Tire Firth Carpet Flintkote Fruehauf Trailer Hewitt RobinS, Inc. Holland Furnace Inter.Min. & Chern. Intertype Corp Closing 3/4/49 38 5/8 25 1/2 6 1/4 33 28 3/4 47 1/2 40 5/8 50 3/4 26 22 1/4 43 3/4 15 3/8 21 7/8 48 1/4 15 5/8 25 1/8 18 7/8 19 22 1/2 24 5/8 26 Closing 3/4/49 Johns Manville Joy Manufacturing Kresge, S.S. Lowenstein Niagara & Hudson Paraffine Companies Penn-Dixie-Cement Pressed Steel Car Radio Corp Reynolds Metals St. Regis Paper Schenley Sears Roebuck Shamrock Oil & Gas Sharon Steel Shell Union Oil Sperry Corp Stand.Steel Spring Sylvania Electric Wheeling Steel White Sewing Mach. Youngstown Sheet 37 1/4 38 36 1/8 22 1/4 9 1/2 19 3/8 19 3/8 6 3/8 11 7/8 20 1/8 7 7/8 26 1/8 36 1/4 29 1/4 33 1/2 33 1/2 26 1/4 14 7/8 21 1/2 42 5/8 19 1/2 66 1/4 Burlington Mills has been dropped from the recommended list. If held, would dispose of this issue on strength in the general market and transfer to other issues in the list. March 4, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Thll memorandum b not to be con.hued al an offer or solicitation of offen to buy or sell atr( securittes. From tTmtI fo time Walston. Hoffman & Goodwtn may have an tnterest In lome or all of the seclJl'itIel mentioned er.ln. The foroQoln9 material has been prepared by VI al a matter of Information only. It Is. based upon Information believed reliable but not necessarily c.omplete, 11 not Quarameed as accurate or final, and is not Intended to foreclose Independflnt Inquiry.

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Tabell’s Market Letter – March 09, 1949

Tabell’s Market Letter – March 09, 1949

Tabell's Market Letter - March 09, 1949
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TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. DIgby 4-4141 The airline issues have, in the last few months, shown much better technical action than the general market. This is a rather interesting commentary on public psychology because none of the common stocks of the airline companies listed below, with the exception of Eastern Airlines and Pan-American Airways, have paid dividends in the last two years, Further- more, with the exception again of Eastern Airlines and Pan-American, they have all shown sizeable deficits over the past two years, In most in- stances the airlines made their highs in late 1945 or early 1946. As noted in the table below, the declines have been extremely drastic with some issues, at their lows, selling at 1/6 to 1/10 of the levels reached in 1945-1946. Of course, just why the airline stocks sold as high as they did is another mystery of the market. In the 1945-1946 period the airline issues were selling at 20 to 75 times earnings in direct contrast to today when a great many stocks in other groups are selling at 2 to 5 times earnings. This is an example of the extremes of optimism and pessi- mism of public investment or speculative psychology. Last Sale High 1945-1946 Amer.Airlines 3 pf. 60 9S Amer. Airlines 9 liS 19 7/S Braniff Airways 7 3/4 37 1/2 Capital Airlines 6 3/4 49 3/4 Eastern Airlines 15 3/S 33 1/2 No.West Air.4.6 pf. IS 27 1/4 Northwest Airlines 9 5/S 63 1/2 Pan Amer.Airways 9 29 Transcontinental & W. 11 United Air.4 pf. 72 3/S 79 120 7/S United Airlines 12 3/4 62 1/2 Western Airlines – 6 40 1/2 1945 High Low 1945-1949 47 6 liS 6 1/4 3 7/S 137/S 16 S 1/4 S 9 5/S 57 1/2 9 5/S 5 Convertible into Shs. of Common 4.76 1-1/2 4 Regardless of the seemingly unfavorable fUndamental background of the airline issues, I believe that selected issues in the group offer possibilities of substantial price appreciation over both the longer and intermediate term. There are definite long term growth possibilities in – the industry and the individual issues will undoubtedly sell at a higher price to earnings ratio than the general market. Obviously, this group will have its appeal to the investor or speculator seeking long term capital gains rather than income. On this baSiS, I recommend the follow- ing issues. For the more conservative purchaser in a speculative group, I believe that Eastern Airlines, Northwest Airlines preferred, and United Airlines preferred are the outstanding issues. Eastern Airlines has shown earnings for every year since 1936. These earnings have ranged from a low of IIi a share to a high of 1.46. The technical pattern is good. At present price of around 15 1/2, Eastern is still selling close to its low of the last five years while American Airlines has appreciated 50. , Both Northwest Airlines preferred and United Airlines preferred are not earning their dividends at the present time and are paying out of surplus. Nevertheless, they offer definite speculative possibilities due to their convertibility into conon stock. If, in the unlikely event that the common stocks of thes.e companies again reached their 1945-1946 highs, Northwest Airlines preferred would sell at 94 and United Airlines preferred at 250 in contrast to present prices of IS and 72 1/2. Admit- tedly, this possibility is remote but these two stocks appear to offer more interesting profit possibilities than Amer.Airlines preferred which on the same basis would be worth 95 as against a present price of 60 1/2, These prOjections are based only on the value of the conversion privilege. From an extremely speculative point of View, I believe Western offers interesting percentage appreciation possibilities. EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Thl, memorandum 11 not to b, construed ill an offer or solicitation of offen to buy or ,ell IIny securities. From tIme to time Walston, Hoffman & Goodwlmal have an Int.rest In .om. or all of tit securities mentioned h.,..ln. The foroliloll'lO material has been prepared by us liS matter of Information only. It Is'n u;' upon Information belloed reliable but not neeels.!!r!ly complete, Is not Quaranteed as accurate or final, and II not Intended to fonlClose Independent q ry.

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Tabell’s Market Letter – March 11, 1949

Tabell’s Market Letter – March 11, 1949

Tabell's Market Letter - March 11, 1949
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TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 44141 As we 'approach the end of the first quarter of 1949, I Qecome and more convinced that my December 15th opinion, namely, that the for 1949 would be reached in the first three months of the year, will prove to be correct. Furthermore, I feel that the odds favor the probability that the lows for the year were reached on February 25th at 170.56 in the Dow-Jones industrial average and 46.04 on the rails. The industrial average has held above the November 30th low of 170.35 which coincides with my December opinion that the low of 1949 in the industrial average would not be much, if any, lower than the November low. My thought the rails would not sell much below 50 proved to be inaccurate 0 The rail average sold almost four pOints lower. What is the outlook from here on Taking the industrial average first, I believe we are in a minor uptrend that should carry to at least the 178-180 level where some temporary resistance should be encountered. After a correction to 176-174 and a broadening of the potential base pattern, I would expect a testing of.the 182-182t resistance. Ability to penetrate that level would be extremely constructive and indicate an intermediate uptrend to 195-200. All this could occur during, roughly, the second quarter of 1949. he rails, altRsUQ tH appear to have reached their lows… intermedrat upside progress may be a bit more labored than that of other groups. The rails appear quite oversold and any nearterm advance could be quite dynamic as there is little upside resistance between the present level of approximately 49 and the next congestion area between 52-54. However, there is strong upside resistance in that area and even if it is penetrated there is another upside resistance level at 58-60. The pattern on individual rail stocks in quite diverse. While I formerly favored the western and transcontinental roads, the technical patterns now suggest that some of the eastern, southern and southwestern roads have better intermediate term appreciation possibilities. The utility average possibly .has the most constructiye technical pattern. The average is now around 35. Ability to reach 362 would confirm the bullish potential formation and suggest an intermediate object- ive of 42. I It might be interesting to tabulate the possible percentage appre- Ciation, from present levels to the highest intermediate term upside po- tential, of the three averages Industrials Rails Utilities Now 1947-48 High Upside Potential POSSible 2f Rise 176 193 200 49 65 60 35 37 1/2 42 13 1/2 22 1/2 20 While this comparison favors the rails, it is not certain that the rail average will be able to penetrate the 52-54 upside resistance. In that event, the rise would be equal to only 10, based on a potential high of 54. These potential objectives are only for the intermediate term. Furthermore, individual stock patterns are quite diverse and selection will continue to be of prime importance. Suggest my recommended list of March 4th for individ'ual issues that appear to offer better than average appreciation possibilities over the intermediate term. March 11, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not to be construed liS an offer or solicitation of offers to buy or ,.11 any securities. From time to tIme Waldon. Hoffman & Goodwin may have an Interest In some or all of the securities mentioned herein. The fore;olng material has been prepared by lUI as III metter of Information only. It Is based upon InformatJon bell.ned rel1abl. but not neceuarlly complete, ,. not quaratrteed al eccurate or fin,,', and II not Intended to foreclose independenf inquiry.

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Tabell’s Market Letter – March 16, 1949

Tabell’s Market Letter – March 16, 1949

Tabell's Market Letter - March 16, 1949
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SAN FRANCISCO, CALIF. NEW YORK, N. Y. LOS ANGELES, CALIF. BAKERSFIELD IIEVERlY HilLS EUREKA FRESNO RIVERSIDE SACRAMENTO SAN DIEGO LONG BEACH MODESTO SAN JOSE SANTA ANA OAKLAND STOCKTON PASADENA VALLEJO TABELL'S MARKET LEnER 35 WAll STREET, NEW YORK 5, N. Y. Digby 44141 I believe selected oil stocks, particularly during periods of market weakness, present an outstanding purchase at around present levels. From a fundamental viewpoint, I believe the sharp declines from the 1948 highs have overdiscounted the probable decrease in earnings in 1949. Oil stocks, in the past, have usally sold at a rather high price to earnings ratio. For example, as reported in a recent Journal of Commerce article by Dwight Moody, the average price to earn- ings ratio of thirty oil companies during the 1936-1939 period was about fourteen times earnings. This high ratio was due to the growth possibilities and the more or less depression-proof character of the industry. People usually heat their homes and drive their cars regardless of bUSiness conditions and, as the population grows, the demand increases. Today, however, these same thirty stocks are selling at an average of less than five times 1948 earnings, or about one-third of the 1936-1939 average. Also, yields are substantial, even though present dividend payments are at a record low ratio to earnings. At present prices, oil stocks appear to be discounting at least a 50 decline in earnings. Such a decline would appear to be out of line with the outlook. Crude prices may be cut in the near future but any such cut, if it devel- opes, should be only moderate. It would appear that 1949 earnings may be 15 to 25 below the record 1948 earnings. This drop would be largely due to the unusually mild winter and the rigid restrictions on the use of oil burners because of past shortages of fuel oil. This has resulted in a piling up of inventory ano price cuts in the East. In the West, extreme cold and storms have cut down driving and gasoline consumption. These situations are temporary and with increased oil burner installations and normal weather conditions, demand will again increase. Furthermore, even with a decrease in earnings, present dividends should be fairly se- cure as expansion outlays are jn a declining trend. The technical actio;1 of the oil group seems to bear out this fundamental background. The technical irldications of the price trends in the oil group have been rather accurate in the past three years. The group built up excellent base patterns in the period between October 1946 and early 1948. The upside objectives outlined by these base patterns were reached in mid-1948 and profit taking in this group was advised in this letter at that time. During mid-1948, distributional patterns were built up. The downside objectives outlined by these top formations were reached,in most instances, during the first two months of 1949. The dovmside objectives of the more important oil stockS have been given in past letters. The most recent compilation was presented in our letters of February 25th and March 1st. For the past few weeks, the majority of oil stocks appear to be in the process of forming another strong base formation. More time may be required to enlarge this pattern but, in the me.antime, most oil stocks appear to be in a buying area in the lower part of the 1949 trading range. As for individual issues, it is rather difficult to select he most favorble situations until the potential base patterns are finally completed. I have included Cities Service and Shell Union Oil in my recommended list. Thumbnail sketches are available They are recommended for intermediate term appreciation. Other issues with favorable patterns and near term trading possibilities include Mid-Continent Petroleum, Pure Oil, Richfield Oil. March 16, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN

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Tabell’s Market Letter – March 18, 1949

Tabell’s Market Letter – March 18, 1949

Tabell's Market Letter - March 18, 1949
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TABEll'S MARKET lEnER 35 WALL STREET, NEW YORK 6, N, y, Digby 4-4141 The common stocks of investment trusts or investment companies roughly parallel the action of the general market. Unlike individual securities in other fields, they seldom, if ever, act contrarily to the market averages. This is easily understandable when it is realized that the security holdings of a large, well diverSified investment company are, in effect, a miniature general market. However, while individual investment company issues follow the trend of the averages, the rate of movement is quite often much greater, both on advancing and declining phases. The most important element that makes investment company issues move faster than the general market is leverage. Leverage is the amount of senior capital ahead of the common stock. The senior capital acts ,like borrowed money in a margin account and accelerates the changes of value of the common stock. If a company had assets of 12 million, represented entirely by common stock, a rise in the assets of 50 to 18 million would increase the value of the common stock by 50. On the other hand, take the same situation but change the capitalization to 10 million preferred and 2 million common. In this case, the entire increase of 50 in asset value accrues to the much smaller issue of common. The preferred gets nothing and the value of the common 'increases 300 rather than 50. An extreme example of a high leverage issue is Selected Industries selling on the New York Curb at around 2 3/4s a share. On December , 948, its portfolio had an asset value of approximately 42 million before deducting taxes on unrealized appreciation. But ahead of the 2,056,940 shares of common stock, there were senior securities, mostly preferred stock, entitled in liquidation to approximatelr, 52 million. Thus, the common had no asset value and was under water f. However, once the market advances to a point where the portfoliO has a value of 52 million, all further advance accrues to the common stock. This point would be reached at about 205 in the Dow-Jones industrial average. From then on, each 10 rise in the market would add about 2.50 per share to the common. This makes the common stock extremely speculative. Its value depends solely on the potential partiCipation in the assets of the company in the event of a sharp market rise. While exact figures are not available at present, there is in the portfoliO of Selected Industries an estimated 31 million of common stocks. This means that each share of common stock has approximately 15 in working assets – or, at the present price of 2 3/4, each dollar paid for the stock has 5.45 working for it. This obviously causes wide fluctuations in the market price of the stock. For example, at the end of 1944 with the averages at 152, Selected Industries was selling at 1. At the end of 1945, the averages had advanced about 27 to 192. In the same period, Selected Industries common had advanced 400 to 4 1/8. At the highs of 1946, the averages had advanced 40 from 152 to 213 while Selected Industries advanced 700 from 1 to 7 1/8. Of course, this extreme leverage also works in reverve as witness a decline of 70 from the 1946 top of 7'1/8 to the 1947-1948 low of 1 7/8 as against a decline of less than 25 in the averages. As recently as 1941 and 1942, when the averages were around 100, Selected Industries sold as low as 1/16. However, if the market advances sharply, Selected Industries common should appreciate approximately at eight times the rate of the general market. For example, if the averages reached 250, Selected Industries could sell at 9 or 10. For those who expect the market to eventually move higher, the purchase of Selected Industries common is equivalent to holding a diverSified list of stocks on small margin. Unlike a margin account, however, there is little chance of being sold out. No matter how low the market goes, there should be some value to these leverage issues as they represent a perpetual option on the market. EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN aThis memorandum t. not to b. construed u an offer or sol1cttatlon of offers to buy or .all any .ecurttlet. From tIme to time Walrton, HoHman GoodwIn may have an Int.rest In some or all of the securltl.s mentioned hereIn. The foreQoln; materiel has been prepared by us liS II matter of Il'lformatlon only. It II baled upon Information believed reliable but not nece.sarlly complete, b not qU/lranteed as accurate or final. and Is. not Intended to foreelose Independent Tnqu1rr.

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Tabell’s Market Letter – March 23, 1949

Tabell’s Market Letter – March 23, 1949

Tabell's Market Letter - March 23, 1949
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TABELL'S MARKET LETTER 35 WAll STREET. NEW YORK 5, N. Y. Digby 4-4141 The market's technical action is becoming increasingly encoura- ging. The first favorable sign was the ability of the Dow-Jones industrial average, at the February 25th low of 170.56, to hold above the November 30th low of 170.35. The fact that the rail average made a new low on February 25th strengthens rather than weakens the picture because this divergence of the two averages is quite often present at important turns of the market. The second encouraging sign was the ability of . the in- dustrials to surpass the previous February high of 175.62 and reach a high of 177.66 before encountering resistance at the 178-180 overhead ly area. The third encouraging sign was the ability of the market Id in the 174-176 support area. Wednesday's low was 174032 and the market has rallied back to 176.20. So far, the market has shown perfect intermediat-e uptrend action. The next move should be a testing of the ire 178-182 overhead reSistance. The fourth favorable Sign is the ility of the high grade investment issues to hold or even advance in face of sharp declines in situations like American Woolen and Magnavox. Continue to believe that the better grade dividend paying stocks be the market leaders of the next aQvance. I am reprinting my recomm.en.oed list below. This list contains a large number of better issues. American Cyanamid Amero Home Products rican Seating March 23, 1949 Closing 3/23/49 40 1/2 26 26 3/4 6 1/4 33 7/8 29 7/8 46 3/4 43 3/4 51 27 1/4 23 45 3/4 15 7/8 22 5/8 49 15 1/2 25 1/4 19 1/4 19 1/2 23 1/8 25 1/4 '26 Johns Manville Joy Manufacturing Kresge (S.S.) Lowenstein Niagara & Hudson Paraffine Companies Penn-Dixie-Cement Pressed Steel Car Radio Corp Reynolds Metals St. Regis Paper Schenley Sears Roebuck Shamrock Oil & Gas Sharon Steel Shell Union Oil Sperry Corp Standard Steel Spring Sylvania Electric Wheeling Steel White Sewing I'lachine Youngstown Sheet & Tube ClOSing 3/23/49 37 1/8 39 36 7/8 21 5/8 9 3/4 17 3/4 20 3/8 6 12 20 1/2 8 1/8 26 1/2 36 3/4 30 3/8 33 1/4 34 3/8 27 7/8 15 21 7/8 44 3/4 22 70 EDMUND W. TABELL viALSTON , HOFFMAN & GOODWIN Thl. memorandum I. not to be construed at an offer or ,allettatlon 01 offen to buy or sell en., '.curltl… From time to tlrM Walston, Hoffman & Soodwln rna, have an lnte,est In lome or all of the securltle. mentioned herein. The loraoolnq mat.rlal hu been prepared by us III a matter of Information only. It I, based upon Information belleyed rellabl. but not necIIIlSarlly complete, 1s not 9uaranteed as accurat. or fInal, and II not Intended to foreclole Independent InquIry.

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Tabell’s Market Letter – March 25, 1949

Tabell’s Market Letter – March 25, 1949

Tabell's Market Letter - March 25, 1949
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TABEll'S MARKET lETTER 35 WALL STREET. NEW YORK S. N. Y. Digby 4-4141 I have recently received a great many requests for a list of stocks selling under 10.00 a share. While there are a few low- priced stocks in my regular list of recommended issues, the number is small. Obviously, low-priced stocks are generally in a far more speculative category than the higher priced issues. However, I am listing below a group of fifteen stocks all selling at or below 10.00 a share. All of these stocks have attractive technical patterns and in most cases are selling at a considerable distance from their 1946 highs. Purchase is advised on a speculative basis for possible large percentagewise appreciation American Airlines 1946 High 19 7/8 Closing 3/25/49 9 5/8 Avco Manufacturing Budd Company Chicago Corporation 14 3/8 22 1/8 14 1/2 6 3/8 9 10 1/2 Fairchild Engine 8 3/8 4 7/8 Inter.Tel & Tel 31 7/8 9 3/8 Laclede Gas Light 9 3/8 6 1/2 . Niagara Hudson 15 9 7/8 Pressed Steel Car 30 6 1/8 Gray Manufacturing 23 1/8 St.Louis-San Francisco 16 1/2 9 1/2 8 3/4 Selected Industries 7 1/8 2 3/4 Tricontinental Corp 12 5/8 7 1/8 Western Airlines 40 1/2 6 Western Maryland 13 1/8 9 7/8 Adjusted for 5-for-l split,April 1946 1948 High 1945 High EDMUND W. TABELL March 25, 1949 WALSTON, HOFFMAN & GOODWIN Thb mtlftOt.ndum Is not to be conlttued el an off.r or IOlIclt.Hon of oH.n fo buy or ..II any I.curltlel. From filM to tim. Walmn, Hoffman & Goodwin may M. an 1nt.r. In lOme or an of the lecurltlel mentioned he,..ln, Tholl foRvolnc;tl m…rJal has be.n prepared by us a. a matht of Information on1y. It 11 b4s.d upon InformatIon bell .,.d ,.nabl. but not nacena,i1y compl.te, b not vuaranteed 0lil1 accurate or final, and 11 not Intended to foredos. Indep..d.nt Inquiry.

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Tabell’s Market Letter – March 29, 1949

Tabell’s Market Letter – March 29, 1949

Tabell's Market Letter - March 29, 1949
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TABELL'S MARKET LEnER 35 WALL STREET, NEW YORK 5, N. Y. Digby 4-4141 Tuesday's market action was very favorable from a technical viewpoint. The industrial average gained 2.40 and closed at 178.39. The rails were up 1.19 to close at 49. The overnight surprise news of a reduction in margins re- sulted in a very strong opening on Tuesday morning. Monday's high was 176.72 on the industrials and 48.24 on the rails. Tuesday's lows were 176.81 on the industrials and 48.41 on the rails. ThUS, there is an upside gap of 9 cents on the industrials and 17 cents on the rails. It is interesting to note that on February 5th there was a downside gap on the industrial average, which had reached a low of 177.69 on February 4th, as against the day's high of 177.19 on February 5th, or a gap of 50 cents. Thus, Tuesday's action leaves the entire trading range of the past seven weeks in a sort of little island detached from the rest of the pattern. This type of double gap is known as an island reversal and quite often indicates an important change in the trend — particularly when it occurs on heavy volume. We had almost an identical pattern at the start of last year's Spring rally from 165 to 194. On March 22nd, 1948, a Similar island reversal pattern was formed after a trading range of six weeks. The market appears headed for higher levels. Obviously, the advance will not be in a straight line. There are resistance areas at 178-182 and also at 190-194. Normal technical procedure, after the type of gap witnessed on Tuesday, would be for the market to consolidate for a few days at a point above the gap before resuming the main trend. While most ordinary gaps are filled a short time after their occurrence, it would appear that Tuesday's gap was of the breakI away variety. That is, a sharp overnight breakaway out of a prolonged period in a narrow trading range. Usually, this type of gap is not filled for a long while. March 29, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN this memorandum I, not to be nrlru.d 1111 lin off.r or lollclt.tlorl of off.n to buy or lell IIIny lea/ritles. From flme to time Walrton, Hoffman & Goodwin may hey. an lnt.tHt In iOme Of 111\1 of 'thlll lecurln., mllntlonad h.,.\, The 'Hlrllliolnq maiertal hat bun prepeM by ' .s Ito mef oi 1nfonnaUon onty. Ii I, based upon Information b.lI.ved rellebl. but not necossarlly complet., Is net Gu,uanto.d as accurate or final, and ts not Intended to foreclos. Independent InquIry. ,,

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