Tabell’s Market Letter – January 27, 1950

(,,'''''''' .Walston.Hoffman \\ Goodwin . SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. .' . LOS ANGELES, CALIF. AKERSF\ElO BEVERLY HillS EAST ORAHGE. H. J lONG BEACH MODESTOt OAKLAND pASADENA SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD PE8BlE BEACH PITTSBURGH, PA. SANTA ANA STOCKTON HARRISBURG, PA RIVERSIDE VALLEJO TABELL'S MARKET LETTER lS WALL STREET, NEW YORK 5, N, Y. Digby 4-4141 , No material change has occurred 1n the market's pOSition or outlook since last week. Another sharp, late tape sell-orf took place on Tuesday, again followed by a selective rally. I . 1, .; Still expect irregular consolidation between roughly 205 and 190 in the industrials. Recommend trading purchases of issues which have completed good basework during periods or sharp weakness. The \ longer term outlook remains strong and selective investment buying is advisable. . Listed below are brief resumes of some merchandising issues on our recommended list. This group has received relatively little attentioh over recent months but the action has been good and the technical formations promise worthwhile future appreciation. Some of these issues were originally recommended at much lower prices but are still attractive for purchase as indicated. ALLIED STORES – Has shown improving action for the past two years. The June, 1949 low of 26 held above the 1948 figure of 25. Appears to be rounding out major base and ability to reach 37 would indicate long term uptrend. Has near term upside reSistance at 35-36 but should be bought on all dips. FEDERATED DEPT.STORES – This issue has done very well over the last two years, coming from a low of 19 to present 36. Still has strong potential pattern, and on recent dividend increase should make its minimum objective of 40 followed by possible 48. Buy on any reaction. ! ….! oj KRESGE (S.S.) – The stock has broken out of the long 32-41 . accumulatIon area in which it had held for over three years. The first objective is 45 followed by a later 53 and 64. Buy on all dips. LERNER STORES The stock appears to be forming a head and shoulders bottom at-22-17-2l with a top at 26. An upside penetration would indicate 32-34 followed by an eventual 42. Would buy on all dips in expectation of eventual breakout at 27. McCRORY STORES The stock has penetrated the upside of the 24-33 range and has an upside potential of 45 followed by 55. Would purchase on all dips. Approx. Dividend Price Rate Yield 1946 1949 est. High earnings Allied Stores 35 1/2 3.00 8.4 63 3/8 5.00 Federated Dept.St 36 2.50 6.9 42 3/8 4.50 Kresge S.S. 40 1/4 2.30 5.7 45 1/2 3.50 Lerner Stores 23 2.00 8.7 44 1/2 3.25 McCrory stores 34 1/2 2.50-A 7.2 43 4.00 ,i ,. -Div.rate on Fed. Dept.Stores increased on Jan. 6th to 2.50 annual rate against 2 previously A-Including 50 extra paid in March 1949. -Including 30 extra paid in Dec.1949 January 27, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN , T\1hIhe memorllndum en inhHe1i.t In Is not 1i.Ot!\e to Of be all construed as an of tile lecurities ., offer Qr sol,dta.tlon mentio,ad here,,' Tofe b offofre,resgtorn'utreotdrr,se II;enuyteuorItrflesalr.eFdaronbmdy htuimsne.o11ttoianttmeimnadetteedWr taoolfdo'infnof,orerHdmooaftefimoinnandoenp&leyn.G.doeIontdtwIsiinnbqaumsleafl)dl upon information believed reliable blrl not netessarl 'f cemp e e, 15 no 9 .. . …. -.. . …… . . . .—.– .. — …… … ….. ' . …………. -.-., c,..'.,…;.'……..'……..,………. ,.';,;;;… ……', '. ' .N.. .'…. ……,,' ' , ,