Tabell’s Market Letter – June 09, 1950

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