Tabell’s Market Letter – June 22, 1951

;,rr.\'; \'1'tJ7.'tf/'!f\-'t.j, WolStOll.Hoff111011 Goodwin t;.Zt.Pf.'Qp!.i'7f.R7!),,.o.f'!f;f;ttfJ.Jq' i /N-ed ck( lil!'Z NEW YORK 5. N. Y. 7it,ffi 35 Well Street f/l' DIGBY 44141 PHILADELPHIA 2. PA, 1420 Walnut Street PENNYPACKER 55977 LOS ANGELES 13. CALIF. SAN FRANCISCO 4. CALIF. 550 South Spring Street 265 Montgomery Street MADISON ')232 SUnER 12700 b70t!l/ifi!4,kr. ,t 1-Mr;,.-L!!1 bl;;i;Y!.f, TABELL'S MARKET LETTER jliI t&After reaching a high of 255.23 last Monday, the industrial average de- iP' t1.f fjlII!,' I\!clined sharply for the balance of the week to reach a low of 246066 on ti, i!l!;liFriday. The decline was to be expected because (1) the market had refftraced about 60 of its May decline of twenty pOints. 'This is about the utnormal rallying Rower in a downtrend. (2) The 255-260 range in the dus – Jtrial average is an area of heavy supply. (3) The rally ..as ,weak 0 Whlle t1l1! 2 'i;lJ.l ll (tI,the strength in the oils and a few other groups gave the' market abuoyant t;i'appearance, more stocks were declining than ad,,,andng th new, s , , I r !)l!the !lhl year greatly-outnumbered the, new highs. – . . – … . '-. However, the market appears temporarily oversold 'and, after so-me-;!p;1 ;Possible further weakness early ,Monday, would expect another attempt to t( Wjreach the 255-260 range .After a week or two of, firmness, I believe the May '0 ),llow of 241.89 will again be tested with the probabilities favoring ,a down- 'ti i'iside penetration later in J u l y . rWil,apply to While this pattern applies to the general averages, it ioes not individual issues. As always, the market will not move as a \Ihole. '';-7'' i.h iF!IThiS is particularly true today. The graphs of individual issues show quite l,!diverse patterns. Some issues, like the averages, appear to be forming dis-l !),,;tributional tops and indicate lower levels 0 Other issues. show very strong i' K410ng term patterns and indicate only relatively minor declines. Other t;. Ij!groups indicate that they have already reached their low.s. and might eve jmove moderately against the trend. C '.1 . Itf;!; iv'1 Such a group is the utility issues. It is the only group that ; ti) is below the pre-Korean highs of 1950. '! d )i!Cl',/ trials 2ii2f g Pre-Korean Hgih r anFiyd Close t1'i!!- !ji Dow-Jones Utilities 44.26 42.62 If&I ')'9 The technical patterns of most utility issues indicate that they I.A !;are slowly building up long term accumulation areas. The fuhdamental reason W.!are not hard to find. The utilities are receiving much better tax treatment..ii, ;iunder the present emergency taxes than they did in Wold War II. In addi- .. i WI! tion, they have no conversion problems and no inventory problems. Sales are \, Itl1running about 15 above a year ago and, with an intensification of' the de- ;4 j fense program, the spread could widen further. . , ll Listed below are a number of utility issues with' favorable tech- '!;. fiinical patterns. Issues of this type combine defenSive qualities and good !l i';f,yields with moderate long term appreciation possibilities. I am also list- M11;M! ing their longer term upside Approx. objectives Indicated a,s outlined by my technical work. 1950 Long Term g'l Price Div.Rate Yield Earnings Price Indic. carolina Pr.& Lt. 32 2.00 6.1 3.40 .38 Ii;.. Idaho Power i;Illinois Power 35 35 1.80 2.20 5.1 2079 6.3 ,.2.B4 16 46. ;,1.,.1 ,..1, t ,. ,;; if1powa Power & Lt. 20 1.40 6.8. 1.86 27 /.i Northern States Pro 10 .70 7.0 '1.94 13,-15 hl 1.1iPacific Gas & EL 32 2.00.' 6.1, ,2.51 42 i', f0PUbliC Serv.E1. 22 1.60 7.3 2.06. 30 fJ f;;lRochester Gas & El 32 2.24 6.2 2.84 38 1' Southern Cal.Edison 32 2.00 6.1; 3.18 . lf2 7\'j West Penn Elec. 28 2.00 7.0 3.49 37 F ,f'!!1t1( P rospectus '11 .. '…. t;'.,77/ f;l1!iii, ceii.t11stiTngh,erethearree other 'is not astturarrcl'ctinvnetftse'csluieisilbcault-ai.natasom01'e). 'cwahsiecnst,o-dbu-ae-'stoe-lr-eQ-ng! – term objectives. In other cases,. the issues are lID.listed and no technical -;l lli work is available. Nevertheless, research into these companies can unc.over t;''! il undervalued issues. .,' i. lYj,;Il June 22, 1951 EDMUND 'W. TABELI WALSTON, HOFFMAN' & GOODWIN 4t1f t4 Thll m.morandum I, no' to b. construed as an off.u or foliclt.tlon of offen to buy or .,11 any .,cur,tI,. Ftom tim. to tim. Waillon, Hoffman Goodwin may tan. an lnt.rut 'n lome or all of the Curltle. mentioned herein. The foregoing m.terl.l has b..n prepared by u. 411 m.tter 01 Information only. It Is baud Je-!;, upon information belle.,ed ,..lIable but not neullarily complete, II not ;uarant..d 411 aecUTale or final, and Is not Intended to for.clo.e Independent Inquiry. 'i 'ir!IJJIfl'll!li!Wf!j1.Yb;ifYZ(,!!97;ti7ft.;!ffiZ!. '/;JJ7!,,JMe.i(Ii,''7 ;d ,1',1,14,7;7'l/1 17 I!-';- -, ';;;!IJ;fI(J,/) ;;/I-; i !;'/!i,ri;.f7hli;7,fI', sf't;r.;7/1,!t71!1!/R!lN!/!I!!!P/.;'yi;/t57tfl;f,'IJt/.11!l!!i4Wlf,'!I;.fJ