Viewing Month: June 1950

Tabell’s Market Letter – June 02, 1950

Tabell’s Market Letter – June 02, 1950

Tabell's Market Letter - June 02, 1950
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,Wolston.Hoffmon Goodwin'& ., , …. ……………………. SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD 8EVERlY HillS EAST ORANGE, N. J. LONG BEACH MODESTO OAkLAND PASAOENA SAN DIEGO SAN JOSE SANTA ANA EUREKA fRESNO HAGERSTOWN .MD. HARRISBURG, PA. PITTSBURGH, PA. RIVERSIDE SACRAMENTO SEATTLE, WASH. STOCKTON VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 4-4141 HOTEL WALDORF.ASTORIA PLata 9-6860 The market continues in a consolidating phase. The Dow-Jones Industrial average has held between a high of 224.34 and 220.74 for twelve. !' trading days. The rail average remains in the narrow range in which it has' held Since February. Ability to break-out on the upside of the range, par-i ticularly on volume of two million shares or more, would be very construc- i tive and indicate a continuance of the advancing trend. A downside break- out should meet support at 217-215. ,i There' is much comment on the fact that General Motors, at Fridays high of 90 3/4 was within a point of the 1929 high of 91 3/4. On this ' basis, the stock appears to be historically high. However, such a conclu- sion leaves out the important element that General Motors today is a vast- ly larger company, from an income viewpoint as well as from balance sheet , viewpoint. In 1929, the net sales of General Motors were 1.5 billion. , The net sales of General Motors in 1949 were 5.7 billion, or almost four times as large. The earnings in 1929 were 5.49 a share and the stock paid dividends totaling 3.30 a share. For 1949 General Motors earned 14.65 and paid 8 in dividends. A glance at the balance sheet shows equally startling growth. While preferred stock increased 139.3 million to 283.6 million in 1949, cash and governments increased from 127.3 in 1929 to 913.7 million on March 31, 1950, and working capital increased from 247.6 million to 1.4 billion as of March 31, 1950. While there is no doubt that General Motors was greatly over-valued at the 1929 high of 91 3/4, the stock appears under-valued now. This confirms our technical work on the stock. This letter has stressed its favorable action on many occasions. The stock still indicates a minimum upside objective of 95-100. A great many other companies have shown a greatly improved con- dition since 1929 and yet their stocks are selling considerably below the 1929 levels. The eventual objective could be much higher. Take Illinois Central Railroad as an xample. Illinois Central sold at a high of 153t .., in 1929. This year's high has been 42 7/8. In 1929, Illinois Central \' earned 9.14 a share. In 1949 it earned 11.01 per share. Funded debt i decreased from 366.4 million in 1929 to 238.7 million at the end of 1949 i and fixed charges were reduced from 18.8 million in 1929 to 10.5 million at the end of 1949. In addition to this, cash and equivalent which equalled 7.8 million in 1929 had increased to 77.2 million as of March 31, 1950 and working capital had increased from 6.2 million in 1929 to 46.0 million as of March 31, 1950. Regardless of these improved finances, Illinois Central Railroad is selling at approximately one quarter of its 1929 high. .. / ,I The Dow-Jones Industrials at the recent high of 224.34 was selling at the higest level since September, 1930. Historically, this aver- age is high, statistically it is still cheap. That is also the verdict of ; my technical work. While my minimum objective of 225 has been approximately reached, I still believe the market will reach approximately 250 with or without a prior intermediate technical correction. June 2, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorndum Is not to be construed ell n offer or lolldttlon of offers to buy or sell any securities. From time to time Wallto.n, Hoffman & Goodwin may have ,an Interett In lome or all of the securities mentioned heroin. The foregoing mllterial hs been prepared by us as a matter of ,formation only. It Is based upon Information believed reliable but not neceuarlly complete, Is not IjIll8tanteed as accurate or final, and Is not Intended to foreclose Independent Inquiry. ..

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Tabell’s Market Letter – June 09, 1950

Tabell’s Market Letter – June 09, 1950

Tabell's Market Letter - June 09, 1950
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Wolston.Hoffmon &, Goodwin' .' . SAN FRANCISCO, CALIF, NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSF(ELD BEVERLY HILLS EAST ORANGE, N. J. LONG BEACH MODESTO OAKLAND PASADENA SAN DIEGO SAN JOSE SANTA ANA EUREKA FRESNO HAGERSTOWN, MD HARRISBURG, PA PITTSBURGH, PA RIVERSIDE SACRAMENTO SEATTLE. WASH. STOCKTON VAllEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 4-'1141 HOTEL WALDORF.ASTORIA PLot 9-6860 After a sharp rapid dip to 218.66 on Tuesday, the Industrial average recovered sharply and, at Friday's intra-day top of 227082 was in new high territory for the past twenty years. The Industrial average has now reached the minimum objective of 225 mentioned repeatedly in this letter since our bUYing recommendations in the 160-170 level. I continue to believe that the probabilities favor reaching the 250 objective. The rail average dropped to 53.62 on Tuesday. At that level, the rails were at the lower part of the 53-57 range in which the group has held since late January. Ability to hold at the old low was constructive and the average has rallied back to 56.91. Ability to decisively penetrate the high of 57.58 would indicate a further advance to the 62-64 area. The sixty-six point advance from the June lows has been extremely selective. The leadership has been excellent. The bulk of the advance has been confined to the better grade investment issues and a few special sit- uations. The greater part of the list has shown only moderate appreciation' and many issues are selling at the same level as when the Industrial aver- ' age was in the 170-180 area. There are some signs that the secondary issues may participate more fully in the rise. The type of stocks that are showing improving action are not so much the outright speculations but the type of issues that are usually classed as business men's risks. A large number of these stocks have built up large potential accumulation patterns and appear ready to mov, I am listing below a number of issues of this type. Their purchase is reccommended on minor price dips Approx. 1949 Price Div. 1946 Yield High 1949 Earnings Allied Stores 35 1/4 3.00 8.5 63 3/8 5.18 Amer. Airlines 10 1/2 nil nil 19 7/8 .79 Amer.Export Lines 19 1/2 2.00 10 02 28'5/8 4.22 -Atchison 116 1/4 8.00 6.8 121 Burlington Mills 20 3/4 1.50 7.2 29 7/8 18.06 3.96 City Stores 18 3/4 1.20 6.4 38 1/4 2.34. Columbian Carbon 35 1/4 2.00 5.7 48 3.69 Denver & Rio Gr&de 29 1/2 2.00 6.7 39 3/4-b 6.33 Eastern Air Lines 14 3/4 nil nil 33 3/8 .82 Electric Boat 17 1.50 8.8 35 3/4 .13 Fruehauf Trailer 25 2.00 8.0 48 2.37 Gulf,Mobile & Ohio 16 1/2 .50 3.0 30 1/1 2.52 Illinois Central 41 3.00-a 7.3 45 1/2 11.01 Lambert Co. 22 1/4 1.50 6.7 68 2.29 ..Lerner Stores 23 1/4 Long Bell Lumb. A 27 2.00 8.5 2.80 10.3 44 1/2 35 2.46 2.77 \ Lowenstein, M. 26 3/4 2.00 7.5 43 3/4 4.33 i , May Dept. Stores Montgomery Ward 48 1/2 3.00 6.1 70 59 3.00 5.1 104 1/4 5.79 7.13 Otis Elevator 41 2.50 6.0 39 1/2 5.26 Penn Dixie Cement 26 1/2 1. 75 6.6 30 3/4 4.37 Reynolds Metals 24 1.10 4.5 37 5/8 4.20 Schenley 32 1/2 2.00 6.1 100 5.27 Servel 13 3/4 .30 2.1 24 3/8 .46-c Shamrock Oil & Gas 29 1.60 5.5 36 3/4-b .63 Southern Pacific United Carbon 56 1/4 39 1/4 5.00 2.00 8.8 5.1 70 45 3/4 8.07 3.60 Western Auto Supply 47 1/4 3.00 6.3 90 1/2 5.00 I' a–New rate. b–1948 high. –For 12 months period ended in 1950. c–Earned April 1950 quarter. June 9, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum is not to be construed in an offer or sollcitation of offen to buy or lell any securities. From time to time W.!Ihton, Hoffo!In & Goodwin may have an intered In some or all of the securities mentioned herein. The foregoing material has been prepared by. us as a maHor of lnformlltlon only. It Is blled upon information believed reliable but not neceullrily complete, Is not guaranteed as aeeuTlite or finlll, and II not Intended to foredoJe Independent InQuLry. J

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Tabell’s Market Letter – June 16, 1950

Tabell’s Market Letter – June 16, 1950

Tabell's Market Letter - June 16, 1950
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'- .If …. , …….. ..-.-. 'Walston-Hoffman &, Goodwin' SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, , …. LOS ANGELES, CALIF. BAKERSfiElD BEVERLY HILLS EAST ORANGE. H. J. LONG BEACH MODESTO OAKLAND PASADENA SAN DIEGO SAN JOSE SANTA ANA EUREKA FRESNO HAGERSTOWN, MD HARRISBURG, PA. PITTSBURGH, PA. RIVERSIDE SACRAMENTO SEATTLE, WASH. STOCKTON VALLEJO – 1- ' . TABELL'S MARKET LETTER ,, . '–'-'' , ''''—jS'WALL STREET, NEW 'YORK 5, N. Y. Digby 4-4141 HOTEL WALDORFASTORIA PLa, 9-6810 On June 14, 1949 the industrial average reached a low of 160.62, ,On Monday of last week, June 12, 1950, the industrial average reached a ihigh of 229.20. This is an advance of 68.58 points in a year's time. To the ';holders of the better grade investment issues,and a few special situations, .this has been indeed a banner year. Their holdings have in most cases pass ed the 1946 highs and in some cases have even surpassed the 1929 highs. However, to the holder of most secondary and speculative stocks, ;this has been a disappointing bull market so far. As a rough estimate, I iwould say that fulJ;y'two-thirds of the listed issues are selling 25 below itheir 1946 highs even though the industrial average is sixteen pOints above .its 1946 high. Probably one out of every three listed issues is today sell ing at less than half its 1946 highs. ; This situation really is not an unusual technical phenomena . ., Every bull market starts with investment leadership. Gradually, as the jmarket moves higher, confidence returns and the demand seeps over into the ,secondary and speculative issues. The only unusual part of the present attern is the time element. It would appear that after a year of rising ,demand for blue chip issues, there would be at least the start of a drift ,over to the more speculative sections of the list. However, the fact that it has not yet happened is the main reason why the industrial average has been able to advance almost seventy points without a worthwhile interme- ldiate reaction. The technical pattern of the market remains sound. There ;are no signs of speculative excesses. , Unless this bull market 'is going to follow a pattern entirely ; \ ,;different from preceding markets of this type, it would appear that, oefore' ,','the advances top out, the secondary issues will playa more important part. ,I do not believe that a move comparable to the sharp runups of 1946 is iI', !, the offing. This letter has stated for a year that this phase of'the ad- . ,vance would be led by sound dividend paying issues. Nevertheless, the se- ,';condary issues should partiCipate to a much greater degree than heretofore. I draw your attention to last Monday's letter which contains a list of 'issues of this type. The price swings in the averages have been unusually wide over , ,the past two weeks. After reaching a low of 218.66 on June 6th, the indus-, 'trial average rallied back to 229.20 on June 12th, to be followed by a de- I cline to 221.79 on June 15th. The rail average, by comparison,has shown ! better support. The June low of 53.62 was followed by an advance to 57.55 , on June 12th. The low so far has been 55.82, reached on Friday. These 'gyrations resulted in an overbought position on the short term indicator f' ,and a selling signal on Monday. However, the 8.42 point decline has now brought the short term indicator into an oversold position. From the pat- , ,tern, it would seem almost certain that a buying signal will be given some L time Monday on the short term indicator. Would replace all trading posii ,tions that have been liquidated early this week because of the sell signal. !.' ; At no time during the year's advance from the June 1949 lows has! ,'either the long term or intermediate term indicator reached an overbought position. Each rise has been consolidated before ,the'advance assumed climactic proportions. Continue to believe that the market will move to the 250-260 range before a full fledged intermediate correction occurs. June 16, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Thi, memorandum Is not to be con5trLled as an offer or solicitation of offen to buy or sell any securities From time to time Walston, Hoffman & Goodwin may have an Intetflst In lome or all of the seCUrities mentioned herein. The foregoing material has been prepared by us as a matter of Information only. It is based upon Information beheved rellablo but not neceuarily complete, is not guaranteed as accurate or final, and II not intended to foreclose independent inquiry. ——–.,/.. …..

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Tabell’s Market Letter – June 23, 1950

Tabell’s Market Letter – June 23, 1950

Tabell's Market Letter - June 23, 1950
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—-r – Walston.Hoffman&. Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EAST ORANGE, N. J. LONG BEACH MODESTO OAKLAND PASADENA SAN DIEGO SAN JOSE'''- SANlA ANA EUREKA FRESNO HAGERSTOWN. MD. HARRISBURG, PA. PITTSBURGH, PA RIVERSIDE SACRAMENTO – …. ……;lATIlE.wASH.- ..-; STOCKTON VAlEJO – – '''; TABEll'S MARKET lETTER 35 WALL STREET, NEW YORK 5, N. Y. DIgby 4-4141 HOTEL WALDORFASTORIA PlO1B 9MlbO The industrial average continues to move in a wide range. Since the first of the month the market has advanced from a low of 218.66 to a high of 229.20 and then tested the low again this Tuesday at 218.99. At , , this week's lows the market reached an overhL,-apght condition on our short term indicator and gave two distinct buying signals one on Monday which 1 proved to be somewhat premature, and another on Tuesday at 219.92 in the I. averages. From this pOint a very sharp rally ensued and at Friday's high of 225.55 the market had rallied 6.56 points (from the week's low. While this average has not yet reached overbought territory on our short term indicator, it will ,do so on Monday unless a sharp technical correction should occur. This may result in a short term sell signal early next week. However, neither the intermediate term indicator or the long term indicator are in danger of registering a comparable overbought signal as they have i strengthened their position due to last week's decline. Therefore, even I .' if a short term sell signal is given early next week, it would appear that it would result in no more than a consolidating phase and a minor decline. It is entirely possible that we are entering a more dynamic – phase of the advance – a phase that will be the prelude to an eventual distribution area. It takes time for such a distributional area to form and during the formation of such a pattern the market in general, and specific issues in particular, could have sharp price advances. This would be accompanied by much larger volume than hitherto witnessed. From a time element such a period could last from three to six months. I continue of the belief that the highs in the industrial average will be somewhere in the 240-260 area. This opinion is purely conjectural because as yet there are no actual building up of distribution patterns. Before that occurs , it would appear that there must be increased public participation and ad- vances in the secondary and speculative issues. ,i Leadership' this week has shifted somewhat. The soft goods iSsues! i notably department stores and textiles, showed considerable strength. These' . . groups, which have been laggards for the past f.our years, were drawn to ; your attention in our letter of May 5th when we advised the purchase of eight retail store issues. Since then we re-recommended several of these issues and a number of textile stocks. While these issues have advanced , from recommended levels, I still believe that they will move higher and , ; advantage should be taken of all price dips to add to holdings. A group of representative issues is listed below, together with their accumulation areas, upside breakout points and possible price objectives. Approx. Price Allied Stores 38 ; Assoc .Dry Goods 19 ; Best & Company 29 , Burlington Mills 22 City Stores 20 Goodall Sanford .,17 Interstate Dept. 27 Lerner Stores 23 , Lowenstein M. 27 May Dept .Stores 50 r'jercantile Stores 17 Montgomery Ward 57 National Dept. Stores 18 Pac ific Mills 34 Reeves 14 Robbins Mills 24 Wyandotte Worsted 12 1949 1946 Approximate Div. igh Trading Range 3.00 3 3/8 25 37 1.60 36 1/4 12 – 19 2.00 52 1/2 24 30 1.50 29 7/8 14 24 1.20 38 1/4 13 – 21 1.37t 47 3/4 14 19 2.00 50 18 26 1.50 44 1/2 17 26 2.00 43 3/4 21 – 27 3.00 70 36 48 1..00 35 13 – 18 3.00 104 1/4 48 59 1.50 39 14 – 22 3.50 48 28 – 34 1.50 18 11 18 1.00 26 3/4 15 26 1.50 25 3/8 8 13 – New indicated rate. – 1948 high. Possible Indication 50 – 55 29 33 48 28 40 35 – 40 29 36 32 35 34 70 25 75 80 32 42 – 51 '26 34 17 24 ,, I ;' I ,1i .'' , June 23, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not have an Interest in some to or be all construed as an offer or 50ltdtation of of the securities mentioned herein. The offen to bll)' or sell o/Iny securities, From time to time Waldo,n, Hoffman foregOing material lias been prepared by, us as.a matter of Information o&nlyG. oIotdwISi.nbameady upon Information believed reliable but not necessarily complete, Is not guaranteed s accurate or final, lind IS not Intended to foreclose Independent Inquiry,

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Tabell’s Market Letter – June 30, 1950

Tabell’s Market Letter – June 30, 1950

Tabell's Market Letter - June 30, 1950
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-Wolston.Hoffman (\ Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. .-. '' . LOS ANGELES, CALIF. BAKERSfIELD BEVERLY HILLS EAST ORANGE, N. J. HARTfORD, CONN LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGESTOWN. MD HARRISBURG, PA PASADENA PlnSBURGH, PA. PORTlAND, ORE. SANTA ANA SEATTLE, WASH . STOCKTON' VALLEJO TABEll'S MARKET lETTER 3S WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 HOTEL WALDORF-ASTORIA Under a deluge of selling brought about by the suddeH unexpec-teG Korean crisis, the industrial average toppled to a low of' 206.33 on Tuesday and, after rallying back to 216.99 on Wednesday, again reacted to ,the same low on Thursday. The rail average dropped to 50.66, rallied to 53.84 and then declined to 51.10. The market rally on Friday carried the averages baclc to highs of 211. 96 and 52.52. The c.i.,ility to hold above Tuesday's 10KS and above the strong 205 support level is an encouraging technical indication. The present market is dominated by fears and emotions and flash news happenings rather than values, earnings and ' i vidends. This is liable to continue until the present crisis clarifies. In the long run, the present happenings should result in higher stock prices. Ask yourself the question of I'i'hether you would rather own cash than stocks in the event of a huge in– crease In our national debt and the consequent infl,,lonJ.r- pres cure . Of course, it may take some time for this reasoning to assert itself and under , the stress of fear and hysteria, stock prices might work temporarily lower first. Let us try to divorce emotion from reason and present the techni- cal pattern entirely apart from our fears of what mayor may not happen. When the industrial average penetrated the June double bottom lows of 218.66 and 218.99 and the rails penetrated the 53.62 low of June, the intermediate trend was indicated as down. It then becomes a question of wheter the 229.20 top of June 12th was a bull market high to be followed by a bear market or whether the 229.20 high was just an intermediate term top to be followed by correction, consolidation and new highs. r believe the latter to be the case. The June 12th high had none of the .; 0 -2cteristics of a major top. There was no heavy volume of trading in low-priced speculative issues with widespread public particjpation. The leadership was in higher grade investment issues and even at their tops, thece issues were yielding above 6 in comparison with 2 5/8 on high grade bonds and after paying out less than half their earnings and selling at 'prices well below eight or nine times earnings. There were no undigested 'new offerjngs or large purchases on slim margIn. There were no large distributional tops formed. Compare these conditions with those present at the 1929, 1937 and 1946 tops. If the June 12th high is just an intermediate top to be fOllowed by new highs after an intermediate correction, how low could the intermediate correction carry The industrial average has advanced approximately sixty-nine pOints from the June 1949 low and the rails have advanced eighteen points. A normal intermediate correction usually retraces one-third to -, one-half of the advance. That would mean approximately 206 to 194 in the -, industrials and 52 to 49 in the rails. The first objective has been 8ached 1.n both' averages. How do these objectives check with the technical pattern There is, strong support at 205 in the industrials and so far the average has held above this figure. There is also strong support all the way down from 205 to' 195. Below that is the heavy support at the top of the threeyear accumulation range. There is strong support in the rails at 50-49 and all the way down to 45. What are the downside objectives on the point and figure charts ',';e industrial average has built up no top pattern so no indicz.tion is available. However, top counts on individual issues indicate tbe possibility of moderately lower levelS 1.n some issues. It is harl to translate this into' terms of the industrial average but I would hazard the opinion it is within 205-195 area. The downside indication on the rails is 49-46. What is ' – – -' — , the short term and intermediate term in- dicators The short term indicator is in a sharply oversold condition, the lowest since the 1946 break. The intermediate term indicator has not yet reached an oversold c,onditlon as yet but it is very close to such a condi- tion and is in a position to do so in the next 22 trading days whether the averages do or do not reach new lows. In conclUSion, from a purely unemotion al technicl viewpoint,believe we are in an intermediate term correction of a major upswing. The low may have been reached at 206.33. Further unsettling 'news mieht carry the averages temporarily lower. Favor purchase of issues that would benefit from a semi-war or defence economy. Rails and steels are ou din rou s of this t e. If; h!l m,;'M1(!d;;.t.64rnedduilAdtbmQe to or be alt construed as an offer or solleltatlon of of the securities mentioned herel The offers to buy or sell any foregoing material has been .l m prepared by fl'fb us as a matter ston, Hoffman & Goodwin may of Information only It is bas(1d upon Information believed reliable but not naceullTily complete, Is not fi1uaranteed 5 aCCUfo!lte or final, and 11 not Intended to foreclose Independent inquiry

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