Tabell’s Market Letter – February 20, 1953

( Walston &- Co. .- – ,- – 1e4)7lent I DutvwuJ-. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES .— — NEW YORK PHILADELPHIA LOS IANGELES SAN FRANCISCO LUGANO ISwihed.nd) OFFICES COAST TO COAS1 CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER As far as the Dow-Jones Industrial Average is concerned, volume indications suggest that the marketlmay remain in the 285-275 trading area for a considerable period of time. However, the technical patterns of individual issues and groups are quite diverse and I would expect worthwhile moves in both directions in various indiviual issues during the waiting period. BLAW-KNOX (19 3/4). saleslin 1952 reached the largest dollar volume of business in its history. Shipments and billings should total about 168 million. Profits too will Feach alnear high record despite the shutdown of five plants during part of the steel strike and the inability to obtain comensating price increases to offset higher costs. Net in 1952 rose to about 2.75. Backlog about 150 millioni , Blaw-Knox is a virtual department store for heavy industry. The company designs and builds plantsifor the chemical, petroleum and gas in,dustries; it manufactures castings for the steel, automotive, oil refining, cement, paper and other industrie; it designs and manufactures radio and TV towers and prefab steel buildings and construction machinery; it produce3 equipment for rolling mills; it manufactures food processing equipment, evaporators, dryers, distillation!and solvent recovery equipment. It is also 'an important factor in atomic plant construction. , The company paid quarterly dividends of 25i for a total of 1.25. Reeently the 9-uarterly dividend was raised to 30i thus placing the company on a regular j\1.20 basis. Whether lor not this will be augmented by an extra will depend on earnings at the year-end. On the 1.20 rate, the yield is C'oughly 6 at the present price o 19 3/4. The technical pattern is excellent. The stock appears to be forming a very strong potential base pattern. An upside breakout to 21 would indica1;e 28-33 followed by a long teI'lI\ 41-46. From a technical viewpoint, this 'is an outstandingly attractive iss,ue. ELLIOTT COMPANY (32) was organized in 1901 and is an established manufacturer of steam turbines, el'ectric generators, and electric motors; is the leading manufacturer in thel United States of turbo-charges used to supercharge four-cycle diesel engihes; and also manufactures a variety of related products such as'deaerating heaters, steam condensers, steam jet ejectors, centrifugal blowers, strf3.iners, tube cleaners and accessory and ot)er equipment. Its products are ),lsed principally in the production of 'Power in stationary installations and in locomotive and marine use. Its maln competition is from General EClectric and Westinghouse. Even though thls competition is formidable, thr company has held its own. Net sales have increased from 5.2 million in 1940 to an estimated 50mlllion in 1952. Although company is small, it haS paid some dividend every year since 1905. I The comparison between Ellott and its two chief competitors is in- teresting I Price Dividend Yield Est.1952 Earnings General Electric Westinghouse Elec. Elliott Company 68 45 32 3.00 2.00 2.10 4.4 4.4 6.5 5.10 4.35 5.25 Despite the better investment quality of General Electric and West- inghouse, it would appear that the! price spread over Elliott Company is not entirely justified. 'I From a technical viewpoint, Elliott has a strong pattern. The stock appears to be in a slow uptrend channel. The outer limits are now 28 and 38. The intermediate term objectiv is 42 and the longer term objective is , 50-60. The long term upside potential is 80 above the present price of 33 '.. and the downside risk appears to b 15. \I EDMUND W. TABELL February 20, 1953 WALSTON & CO. \ This memorandum is not to be construed liS an offer or solie tation of offefs to buy or sell any securities from time to time Walston & Co, or any partner thereof, may have an Interest In some or all of the securities mentioned herein iThe foregoing material has been prepared by us as iI matter of infrmatlon only It. is belled upon information believed reliable but not necessrily comDlete, 15 not guaranteed as accurate or final, and IS not Intended to forecloe Independent InqUiry 1