Viewing Month: March 1953

Tabell’s Market Letter – March 06, 1953

Tabell’s Market Letter – March 06, 1953

Tabell's Market Letter - March 06, 1953
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Walston &Co. ,dl..jI71nt c5ec((/uEte.J.. MEMBERS NEW YORK STOCK EXCHA-N…G.- EIANOOTH-ER LEADING. STOCK AND C-OMMODITY EXCHANGES – NEW YORK PHILADELPHIA LOS /ANGELES SAN FRANCISCO LUGANO (Sw,t,.,I.,dl OFfiCES COAST TO COAST CONNECTE BY DIRECT PRIVATE WIRE SYSTEM I TABELL'S MARKET LETTER ,-. – MISSOURI-KANSAS-TEXAS,PREFERRED (69) with its high accumulation of back dividends, is practically a 'common stock. As of the end of 1952, back dividends totalled 147 1/2 per share of preferred. Thus the prefer- red has a claim of 247 1/2 ahead! of the present common stock. The road managed to keep out of receivership in the 1930s and has gradually impl'oved its financial position. TH,e back interest on the adjustment bonds was finally cleared away last year by cash payments. As the preferred stock is cumulative, the net earnings now all accrue to preferred stockholders. With accumulations totalling over 147.50 and the preferred en' ti.tled to a 7.00 annual dividend, this places the common stock in a very unfavorable position. There have been various plans submitted to clear awqy- these arrearages, but no plan can be adopted without the majority approval of the corrunon stockholders. Unless they assent to a recapitalization plan, all net earnings will accrue to the senior shareholders. This places the preferre'd stock in a very favorable position as compared with the common. EarniJgs for 1952 equalled 11.32. An initial dLvidend of 1.25, the first in rriore than twenty years, was paid on January 5, 1953 and another 1.25 will go ex March 11, payable April 1. It appears that this will be a re'gular quarterly rate and, at the present pl'ice of 69, the stock yields 7.2. With earnings prospects good, the pl'obability of the full 7.00 diviidend is not entirely remote. – The territory served shows excellent Igrowth. The road runs south from St. Louis and Kansas City to Dallas, ,Fort Worth, Houston and San Antonio. The technical pattern is fvorable. The longer term objective is 95-105 with a nearer term possiblity of 75-80. The 60-50 area should fmnish good support and would bel an excellent buying range. SMITH (A.O.)CORP. (34) has!a diversified line of products. Its principal customers are automobile manufacturers, petroleum drillers and dlstrlbutors, hydro-electric plants and public utilities, construction contractors and farmers and consumers. Among its products are auto frames and parts; petroleum pipeS, casings and gauges; fabricated parts; centrifugal and turbine pumps; elech'ic motors; large volume gas water heate's and agricultural storage lunits, Smith's growth has been abqve average in the auto accessory field. It has pursued an aggressive polilcy of new product development and because of this, dividends have beEin modest in relation to earnings. The company has conducted a large eansion program also with plant account rising from 10.2 million in 1945 to 29.8 million in 1952. The expanston program will be completed bi the end of 1953, after which shareholders may look for larger dividends. Both sales and earnings fot the fiscal year ended July 31st, 1952 declined from the previous year. I'This was due largely to the steel strike. Also, CMF restrictions held down sales to the civilian automotive industries. While first half earnings jof 1.21 were poor due to conditions noted above, this should be made lup during the balance of the year. 1953 earnings are estimated at 4.50-5.00 as compared with 5.02 in 1952. Dividends of 2.00 a share were paid in 1952 to yield 5.9 at the present p'rice of 34. Book value is about 63. The technical pattern is good. A high of 48 was reached in 1946 and a low of 19 in 1947 and 1949. The stock has recently held in the 39-33 area. An upside penetration would indicate 46-53 for the intermediate It'I'Ill. The long term obj ec tive is i60-70. There is very good downside support at 32-28. EDMUND W. TABELL WALSTON & CO. March 6, 1953 Til s memorandum is not to bE! construed as an offer or soll!;'tation of o'ffers to buy or sell any securities From time to time Waldon & Co, or any partner thereof, mll, live an Interest til some or … 11 of the securities mentioned herein The foregOing matenal has been preplired by us as a matter of information only. It IS b.ned upon Informahon believed reliilble but not necessarily tomplete, lIS not gUllfllnteed as lIccurate or fin.,l, and is not Intended to foreclose independent inqUiry I c

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Tabell’s Market Letter – March 13, 1953

Tabell’s Market Letter – March 13, 1953

Tabell's Market Letter - March 13, 1953
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I, , r WaIsiOJl-.&. COill H …. N. '.' , … …….. '. .Y,J4tmn.c Decu/utuJ- MEMBERS NEW YORK STOCK EXCHANGE iINC OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw,t,.,IdJ OFFICES COAST TO cOAsrlcoNNECTEC BY OIRECT PRIVATE WIRE SYSTEM lrABELL'S MARKET LETTER In the face of potentially disturbing foreign news, the market has acted rather well. The rally from the February 18th low of 279.72 in the DOI-Jones industrial average carried to a high of 289.59 last week. This wan below both the January 5th high of 295.06 and the early February high pf 290.94 and-the downtrend still liS in effect. However, this could be-quite eanily reversed. In fact, any firmness during the coming week would result n a buy signal on my intermediate term technical indicator. This gauge !neCilferviunJsO!itieWohemt;!lp!- thtn that of the averages. j The light blue chips continue to show better action than the higher grade issues. There is a continued demand for higher grade equities from,inf!titutional sources, but the lo yields now obtainable act as a short of price Sf!ues cei is l ing. illus The trat yield ed be s ob low t ai n abil e on some representative blue chip growth AIUed Chemical Alum.Co. of Amer. American Can C01'ning Glass DOI Chemical -duPont PRICE 76 93 35 74 40 98 YIEllD 3.95 3.23 3.6 2.7 2.06 3.62 General Electric Minnesota Mining Monsanto Chemical Pitts.Plate Glass Procter & Gamble Union Carbide PRICE ,(2 45 92 58 67 69 YIELD 4.I'7 2.22 2.72 3.45 3.88 3.62 By contrast, there are a IJrge number of light blue chip issues that are still available on a 5 1/2 to 7 1/2 basis. This letter has been stressing issues of this type for la- considerable length of time and I have ncluded a large number of this tYjPeJlof equity in my recommended list. -Several of these reached new high ,territory recently, including Babcock & jlilcox, Blaw-Knox, Bucyrus Erie, Ellliott Co., Hall Printing, Joy Manufac- turlng, Lone Star Cement, New York Air Brake, Otis Elevator, Phillips Pe- troleum, Shamrock Oil and Western Auto Supply. The rail average has not shown as favorable action as the industrials. ThE! average has held between 113.94 and 106.25 since early January. The pOElsiblllty of the announcement o a wage increase shortly has evidently acteo. as a damper on this group. he technical pattern suggests a possible ;ndeIfoiig ed;is!erdem;ryaistbeduilhhe pattern clarifies. I The following issues in the light blue chip category still appear ,to be in a buying area for intermediate term capital appreciation. ALPHA PORTLAND CEMENT (47 78) yields approximately 6.4 which is about the best yield obtainable on the better-grade cement equities. There s a possible announcement of a pice rise in cement shortly. Also, an eli- 'mination of E.P1T. would be quite Ifavorable to this group. The technical 'pattern is favorable with a lon term indication of 60-75. BABCOCK & WILCOX (39 7/8) reached new high territory for 1952-1953 dUl'ing the past week. The 1951 high was 43 1/2. Earnings for 1952 equalled 5,,86 a share as against 5.67 in 11951. The outlook is favorable and 1953 ealings are estimated at 7.00 td 8.00. The 2 dividend in 1952 was sup- 'plemented by a 5 stock dividend.!probabilities favor an increase in pay- ments to 3.00 in 1953. BLAW-KNOX (21 1/2) broke out of a long accumulation range to reach 21 5/8 last week. The technical pattern suggests an intermediate term 28-33 fo110wed by a long term 41-46. Estimated earnings for 1952 are 2.70. Nine months earnings were 2.03 vs. 1.168 in the 1951 period. The dividend was t'eeently increased from 25 cents uarterly to 30 cents quarterly. 1952 payments, with the 25 cent year-end extra, totalled 1.25 NEW YORK AIR BRAKE (22 3/8) Less than 40 of sales are now in the cy- clIcal railroad equipment business. Since 1949, it has purchased several companies in the field of hydraulic transmission and control of power. This hall greatly enhanced the growth lossibilities as has also its entrance into, the high vacuum pump field. The lji.85 earned in 1952 amply covers the 1.60 dividend to yield 7.2. The technical pattern is extremely favorable. Jl'Jarch 13, 1953 EDMUND W. TABELL WALSTON & CO. TIm memQrandum is not to be construed as an offer or sollcfaHan of oHerl to buy or sell a.n)' securities From time to time Walston & Co, r any artner thereof, my ho!lve an Interest In some or 'III of the securities mentioned herein' The foregOing material has been prepared by us as a m'Jtter of ,nformatlon only It Il b.ned upon Information bl!lieved reli.llble but not necesulflly complete, Is not guaranteed ,n accurate or final, and is not intended to foreclose Independent inquiry ,

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Tabell’s Market Letter – March 20, 1953

Tabell’s Market Letter – March 20, 1953

Tabell's Market Letter - March 20, 1953
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—————————————. rAllJWnlNzt DecuJu/t I MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY eXCHANGES NEW YORK PHILADELPHIA LOS NGELES SAN FRANCISCO LUGANO (Swit,ld I I OFFICES COAST TO COASTjCONNECTED BY DIRECT PRIVATE WIRE SYSTEM l'ABELL'S MARKET LETTER The market continues to show selective action. The Dow-Jones indus trial average advanced to a highlof 291.78 during the past week as compared wlth the January high of 295.06. The rail high was 112.80 last week, and 113.94 in December, 1952. However, numerous individual issues have shown relatively better action and hav advanced to new high territory. Most of these issues have been in the category of light blue chips or issues slightly below top quality. I continue to feel that these types of common equities will be the'..market lead-ers. They are still available on a 5 1/2 to 7 1/2 yield basis as against la 4 1/2-3 1/2 yield in the better grade blue Chips,. As far as the loweIl-grade common stocks are concerned, I do not believe tha-t there.-is enough1speculative interest at the moment to en- courage any wide moves in this tYiPe ,of issue .. As far as the averages ae concerned, I continue to feel that the market during 1953 will swing back and forth in a relatively narrow range. I do not expect 1953 to be a bull or bear year but rather a combination of both with private bull and bear markets in individual securities. The in- vestor -can maintain his position,; provided he has issues in favorable groups. He should also have a small cash reserve in order to take advan- tage of price corrections. The more speculative trader should have ample opportunity to take advantage of ,the expected trading range and be will- ing to' Se,ll on Jiltrengitlil ald not be afraid to buy on weakneBB. LONG TEEM INVESTMENT In accounts concerned mainly with income and longer term price ap'preciatic!n, would advise a 75 invested position in common stocks and 25 in short' term governments in order to take advan- tage of possible buying opportuniities during the year. ' The issues in the recommended long term investment list are show- ing good technical action and should continue to be held. For new pur- chases, the following issues appear attractive on moderate price declines I PRIC 1952 DIVIDEND YIELD Allis Chalmers AlphaPort.land Cement Babcock & Wilcox Blaw Knox Briggs Mfg. Bucyrus Erie Crane Company Eagle Picher Elliott Co. General Rwy. Signal Joy Mfg. Lowenstein New York Air Brake (p) Otis Elevator Shamrock Oil & Gas Smith, A.D. Sylvania Electric (p) Western Auto Supply 55 I 48 41 I, 21 42 27 32 23 32 35 39 32 22 44 38 35 36 57 4.00 3.00. 2.00-A 1.25 3.00 2.00 2.25 1.50 2.10 2.50 3.12 2.00 1.60 2.50 1.82 2.00 2.00 3.75 7.27 625,– 4.88 5.95 7.14 7.4 7.03 6.52 6.56 7.14 8.00 6.25 7.27 5.68 4.79 5.71 5.56 6.58 'A – Plus 5 Stock. P – Offered by prospectus, which is available on request. CAPITAL APPRECIATION In iSk accounts concerned mainly with capital Q,ppreciation over a six-month peritod, I advise a 50 invested position with tbe remaining50 kept liquid to await buying opportunities. On further strength into the 295-300 area would further lighten accounts to 33 1/3 invested. I MINNEAPOLIS, ST. PAUL & S'.STE.MARIE (SOO LINE) declined to 14 on tne news of the dividend omission. While some patience may be required, I ,believe this issue is an excellent speculative purchase. There is strong support in the 14-13 area. The road is in an excellent growth territory ad long term capital gains could be substantial. ' March 20, 1953 EDMUND W. TABELL WALSTON & CO. -ThiS memorandum is not to be construed mi'y have an interest in some or all of based upon InfOrmatiOn -believed reliable as an offer or soliCitation the secuflties mentioned but not necessarily comp lheoetfree,ointLtsernsTohtteogfuboaurryeagnOortienesgde 'Iranasan,Yaerctcaeu,'cruahrtalst'I0e,se;i,FnraoFm,reaptnimreeIdS t.onbotimIn'et aWshatomnatterCoof, or any partner thereof, Information only It IS d d to foreclose independent Inquiry en. e .

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Tabell’s Market Letter – March 27, 1953

Tabell’s Market Letter – March 27, 1953

Tabell's Market Letter - March 27, 1953
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I Walston &Co. t'l('1/-'11Int DuuJu/iM– I MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES AGELESNEW YORK PHILADELPHIA LOS SAN FRANCISCO LUGANO (Swit,ld) TAB Ell'S MARKET OFFICES COAST TO COAST bONNECTEC BY DIRECT PRIVATE WIRE SYSTEM ! lETTER I Since August, 1951, a period of twenty months, the market, in terms of h var-ious averages, has heIdi in a relatively narrow trading range. As measured by the Dow-Jones industrials, the low has be'en 255 and -the high has been 295. The percentae advance from the low to the high was approximately 15. In terms of a 10 stock, this would mean an advance from 10 to 11 1/2, or, in a 50 stock, an advance from 50 to 55 1/2. However, during this same period, Carrier C01'p. avanced from 22 to 45 or over 100. Also, duing the same period, American inc declined from 29 to 17 or over 40. Numerous other examples could be ited. Even stocks in the same group have. shown widely diverse movements. In the.chemical group, UnionCarbide-advanced from a low of 55 to a high of 72 during the past twenty months. -' This is an e.dvance of 30 or 100 better than the industrial average. Con- trarJlise, another chemical issue, American Cyanamid, declined from a high 'of 65 to a low of 48. This is a decline of 26 as compared with a 15 ad- vance in the industrial average. I Over the past twenty months, if one had the foresight to ignore the tr(md of the general market and had concentrated on the technical patterns of individual stocks, he would have assumed a long position in some issues and a short position in others. This would have been much more profitable than either a 100 bullish position or a 100 bearish position. In periods such as we have 1I (fitnessed over the past two years, techni cal indications can be extremely elpful. However, a technical analysis of ea(h individual issue is needed. A forecast of the general market has been mell.ningless for the past tw year. The market has not moved as a unit and, in my opini.o'l, will not do so in 1953 or 1954 except for ve.ry short periods of time. The technical patterns sggest continued diverse movements and the investor must hold the favored issues and dispose of' the unfavorable issues .in orner to take advantage of tpeladJustment or consolidation that seems .indicated over the next two years t . Forsaking the technical action of the maricet for the moment, and coneem;rating on fundamental businessI outlook, it would appear that production, s8,les and –cmp oyment–have-'reachea la leve1 'Just Moui; as–higfi as they -are go.lng to go ave, the next fe\'/ years. The inventory replenishment since the steeJ stt'ile has been about complted. However, indications are that all of ,these factors may remain on a relittive1y high plateau. The capital goods 'boom continues and, due to obsolecense of many plants, may continue longer than many economists expect. Inciiations point to stability rather than sharp incree.ses and that means highly competitive conditions with rewards fo!' the strong and set-backs for the weak. The mOf,t l.mcert8,in factor has been the foreign outlook. The market haS beeome increaslr.gly nervous over the past few weeks and has had sharp spo- 'radic moves both up and down on news of Stalin's death, shooting down of planes and rumored peace proposalS. Ma,ket action and reasoning has become confusedo At this pOint, it mightibe constructive to consult the technical pattern of indlvidual issues for a possible clue These graphs reflect the cOucentrated feeling and oPinionslof investor and speculator throughout the v.'orld. If the technical graphs meaA anything today, they indicate that the lO1g' trm buying has been most prnounced in issues that would ultimately benefit from peace rather than war. The technical pattern of the market seemS .t'2. sge;.!'st that some time in the thear future events may come about that will maJ-ce World War III unlikely over 'the next five to ten years. The first mar- ket-reaction to this development Will mostlikely be wrong.cSuddenand-un ,expected n9WS usually results in lower markets. The Dow-Jones industrials I'deelined almost thirty-five points after the invasion of Korea in 1950. ThiS. 'fi't'st impression was wrong as was evidenced by the subsequent ol).e hundred- pcint o.dvance. That is why I have been advocating a partially liquid positiot); i inveEtment and trading accounts in order to take advantage of possible buying opportunities brought about by such developments. However, the cer- tatnty of peace would, of course,ibe a very bullish development and would I'esult in the ultimate long term advance that I have been predicating to levels cc.nsiderably above the 1929 highs However ,the advance, particularly in the earlier stages, will be extremely selective with some isaues advan- cing while others decline. j EDMUND W. TABELL Narch 27, 1953 I WALSTON & CO. TIll memorandum IS not to be construed as an offer or solic.!Ition of offers to buy or sell any ulcurltles, From time to time Willdon & Co, r any artner ther(lof, mel'! have an Interest in some or all of the ecuritles mentioned herein I The foregoing Material has been prepare;d by 1;1 al a matter of information only It, I bused upon information believed reliable but not necessarily c.omDlete, is not guaranteed 055 accurae or final, …nd IS not Intended to foreclose Independent IMqUII,/ – . I .. .. . , – .t'

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