Tabell’s Market Letter – December 14, 1951

Tabell’s Market Letter – December 14, 1951

Tabell's Market Letter - December 14, 1951
View Text Version (OCR)

Wolston.lloffnl0n &- Goodwin. -'' — NEW YORK 5, N. Y 35 WII Street DIGBY 4-4141 PHILADELPHIA 2. PA 1420 Wlnl.lt Street PENNYPACKER 55977 LOS ANGELES Il, CALIF 550 South Spnng Street MADISON '3112 SAN FRANCISCO 4, CALIF. 265 Montgomery Sheet SUTTER '11DD !('!i TABEll'S MARKET lETTER ,,'I'th, ,- ;,,;i If the fourteen-point advance the Novel iber low of 254.91 in the – !' Dow-Jones industrials is merely a technical rally in a longer terr, downtrena I, ,about all of the upside potentials have been reached at last week I s high , .J of,- ),;'268.95. The advance has (1) retraced about two-thirds of the twenty-three ;,;,point decline fro, the September high of 277.51. This is the allowable I,laxi,;. U);um retracement of a preceding move without changing the trend. (2) The ad-c f)vance has closed the October 22nd downside opening gap between 267.00 and'- 1/265.90. Many technicians believe that gaps between the range of one day , 'and that of the previous day ,1USt be closed before the move in the direction of the gap is resumed. (3) The industrials have rallied to just below the ' ,heavy overhead supp ly between 269.04 and 277.51. – ;r/ The ability of the average to rally above 2,- n L.reasing volume '..,would, in my opinion, be a constructive sign and indicat;2 a possible chan'ge !'in trend and at least a testing of the September high and the possibility ,'(' ; of a new high not too far above 277.51. The inability to move much above ;i.'last week I s high of 268.75, followed by a downside penetration of the Novem- 'ber low of 254.91, would indicate a continued downtrend of at least inter- -mediate term proportions. Until more definite indications are given, would -, ,continue with my previous recommendation of only a 50 invested position in ;',cafiital appreciation accounts. ,,' For accounts less than 50 invested, or for switching purposes, the three stocks mentioned below offer interesting possibilities for longer terci- , appreciation. One of the three, Cornell-Dubilier, has been previously ad- ;',;vised. The other two are new additions to my recommended list. All three ',are in the speculative category. CORNELL DUBILIER ELECTRIC (18 3/8) is the largest manufacturer of –, ,', capaci tators. Its products are used by television, radio, utili ties, fluo- — ',rescent lighting, aircraft, communications and various other industries. ;Defense backlog is large. Earnings for the fiscal year ending September 30 ,are estimated at around 3.70 as compared with 3.96 in the fiscal year — '',' ended September 30, 1950. Sales will show an increase and lower net is main' ',,ly due to heavier taxes. Dividends are expected to continue at a 30 cent 'quarterly rate with the possibility of an extra dividend some time in 1952.- The stock sold at a high of 27 7/8 in 1946 and as low as 7 in 1949. – The recent upside penetration of the year and a half trading range between ' ',,17 and 12 indicates higher levels. There is good downside support at 17-15. ';, BELL & HOWELL (19) manufactures precision-made motion picture cameras, I')projector equipment, sound and picture reproducers and still cameras. It ,– ,';also manufactures microfilm equipment which is distributed by Burroughs – r,Adding Machine. There are distino'c growth possibil i ties in microfilm and idemand for projectors and equipm,'mt from SChools and institutions should also show continued growth. 1951 earnings are estimated at 2.50 as against- 3.52 in 1950. Third quarter earnings w;r.; cut by retroactive tax charges. vii th increased defense orders, 1952 pro spec ts are favorable. Dividends, which have been paid for thirty-two consecutive years, are conservative at ',';the indicated rate of 50 cents regular yearly, and 50 cents extra. ,,' The stock sold at 37 in 1946 and reacted to a low of 11 1/8 in 1949. i,lThis year I s high is 23 1/4. The stock appears to be building up a very 'strong technical pattern. Some further work may be needed in the 17-23 area- , -but the potential long term objective is considerably above present levels.' GEORGIA-PACIFIC-PLYWOOD (20 1/4) seemed very reasonably priced at the ,recent low of 17 5/8 and had reached the downside objective outlined by the v26-25 top. Some further backing and filling in the 18-23 area may be neces- sary, but the stock appears to be building up a strong potential base i,' pattern and should be bought during periods of moderate price declines. – Lower plywood prices have caused a dip in earnings of most plywood companies, but the situation appears to be showing signs of improvement. ,' The 1.50 dividend provides a yield of over 7 and seems secure. Earnings for the nine months ended September 30th were equal to 3.40 a common share, ; Our Research Department recently issued a very complete report on this 'i/, company giving a more detailed picture. December 14,1951 t Dow-Jones Ind. -265.71 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN I', This ;iD.QJ;Jan;;JmOlrliAo nbto;d a; an ro2Iidtatton of offen to boy or lell ally seconti From lim. to hme Walston, Hoffman & Goodwin may h,u', n int'fest in lome- or JI of fhe- 1e-(UfifIIlS mllnlIOe-d here-i The- foregoing mte-rl' no3s be-en pre-po3t.d by liS 031 03 maner of mformdHon 01'11'1. It il baled UpOI'! information b.Uev.d rellabl. but not neceuatlly complete, is not ,tuaranteed as accurat. or final, and h not intended to foreclose independent lnqulty f-.- ..– -', '-.-'–''–'—–',-;–'- -'—- – … -,' ,-,- –,,-;. ,-,'-.-,– -,-' —'–,–,';.' -,'P – -,—- -,

Download PDF