Tabell’s Market Letter – August 24, 1951

.,;,. '''''''',' Walston.flofflnan &- Goohviu t;'';',',,;,',;,ii, ,r' \ ,'\ ' , 1-,,' NEW YORK 5, N. Y. , ';,l' ; 35 Wall Street DIGBY 4-41.11 , ,,'./, '''' TABELL'S ,,ft. ', ' I) of0;!'4tf;U7z& &er PHILADELPHIA 2, PA, 1420 Walnut Street PENNYPACKER 5-51177 LOS ANGElES 13, CALIF 550 South Spring Street MADISON' 3232 SAN FRANCISCO 4, CALIF 2b5 Montgomery Street sunER 12700 LETTER i ,p.',,,,! p'/! I1J (I'; '(' 1',/ 1-,1, ,! -,' ,fIJI' , ' -L ' \ When mei1tion .is made of growth stocks , the average investor F, ,,';Iusuall thlnks of clemicals, ethical drugs or oils. 10st of the cO1panies , ;,)n 'he above categories have had sharp 'market advances n recognition of ,', '.cheir excellent long term prospects. Today's prices, particularly in 'I', '.'icheaicals and drugo, are at levels that very liberally discount these fa- !' ;vorable developments. lliany of these issues are selling at very high price t, g ;..to earnings ratios and yields are very small. i'i There is one growth group, however, that has not yet discounted ;;; ; ,li ts xtremely favorable longer term prospects and wher-e the individual ,,; '.'issues in the group are still selling at l'easonable price levels. It is the ;1, 1/,,'1elec ,.ronics group. . !',, I', One reason, perhaps, is because the industry, its products and \' ,. their application and growth possibilities are not fully understood by the I ;,generl public. I' Electronics, to the layman, was first associated with the electrldl. ';eye and then with radar in World War II. Of course, television is what brin.;s electronics to mind today. But there are many o'her uses, both pre- r i' , sent and poteatial. Electronic research is causing great changes in the ;., ,,fiel( of business and accounting machinery, in micro-wave relays, automatic ;, !,',contl'ols and two-way communication systems. And, of course, electronics ;'has a very important place in the defense program. Military electronics 1,''' ''';,production is expec t;ed to reach a peak annual rate of 2.5 billion in 1952. \,,; I ';, Host of the better known electronic stocks are in the television '/' ;' ;field. Most television stocks have very favorable long term technical ;,0;' 7jpat terns. However, third quarter earnings are expec ted to be poor because .iof the heavy inventory of dealers and somewhat lO'.er stock prices may be I'd witnessed when these reports are issued. Television issues should be !i,,,',,i, (bought on moderate price dips. I favor issues t!1at also have an 'electronic ; , ..,.t research background as well as television assembly. Such issues include , -'Radio Corp.(22), Motorola (47), Philco (24), Dumont (16), Zenith (60). v,' These issues appear more attractive than stocks like Emerson (14), Magnavox ,,; .(16;, and Admiral (24). ;-, ,, There are other issues that are mainllr suppliers to the electronics ' , . indus try. In this group are inc luded suc h issues as Sylvania (34), Raytheon ;; ,(10), Cornell Dubilier (17), General Instrument (8), International Tel & c,'; 1''.,lToenlg (17), term and Standard patterns. Coil (13). Most of these stocks also have favorable , ' ' '! There is a third group of issues that are in electronics indirect- ';, ;. )y. The office equipment industry is a case in pOint. Such issues as 1,' ,'jBurr'oughs Adding Machine (17), Gray Manufacturing (16) and Remington Rand 'I ;i'ip(2a0r)t . are companies in which electronics may play an increasingly important ;'I The issues above that are underlined are part of my recommended i) list. I advise their purchase for intermediate term capital apprec iation, I;provided such purchase does not bring such accounts below the 75 buying i.',;; , L ',,;.','.reserve advised by this letter for accounts of this type. I, ,, , , , August 24, 1951 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN I, Closing Averages Dow-Jones Industrials 266.30 Dow-Jones Rails 79.04 .' rf- 'lt' – . , , ,/' , , '-, , I' ' ' Thb memorandum is not to b. conltrued o!IS iIIn offlr or lolicltation of offer, to buy or sell any securilles From time to time Wa.hton, HofflriJn & Good….' may ' hovi lin interld in loml or all of the securihes mentioned herein Th. fore90in9 material h/ll bun prepared by us as /Ii matter of informdtlt'ln arly , I bdUd , ,; upon informiltion beHeved r.liabl. but not necessarily complete, Is not uaranteed .'11 accurat, or final, and is not intended to forec\o1! Indt'pndf!nl InqUIry. .,'',,,', ,- – '-'',-';'I;-,'r-,,-, ,';-,';7',' ' 7 I', ',' \.. ..-, ' ,',