Tabell’s Market Letter – June 12, 1953

Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,'wld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TAB ELL'S MARKET LETTER – – -,..- —– i Both the Dow-Jones Industrials and the rails broke to new lows for th IIr.nove during the past week. The industrials, at the weeks low of 260.89, had declined below the October 1952 low of 262.01 but were still above the Nov,, ember 1951 and May 1952 lows of 254.91 and254.70. The rail average at I the weeks low of 99.82 was still above the October, 1952 low of 6.7. The question of the week has been Are we in a bear market To the owners of stocks in textiles, ethical drugs, metals, distillers, Oils, Elugars, farm machinery, coal, carpets and other groups this is an easy questioTl to answer. These groups reached their highs anywhere from nine months to more than two years ago and have since suffered declines of bear market proportions. When the innumerable issues that have done little or nothing marketwise are added to the groups listed above, it would seem that it is a little late to talk about a bear market As I have suggested many times before, it would appear advisable to forget about the market and the averages and concentrate on the action of individual stocks. There have been individual bear markets and indivi- dual bull markets occurring simultaneously for over two years and I expect this action to continue for at least another year. During that period, I doubt if the averages move out of the 300-250 range. The only average that makes much sense today is the utility average The stocks in this average act much more as a unit than the industrials or rails. The utility average reached a high of 5414 in March and has declined to a low of 47.90 during the week. The weakness has been due al- most entirely to the major change in interest rates and the declines in income securities. From a technical point of view, it would appear that the- utilities are quite close to major support levels and should be bought on further weakness. In terms of the utility average, I would expect strong support in the 47-45 area. The downside potential of a number of utilities ape noted below. DOWNSIDE 1953 – -PRICE YlLD OBJECTIVE HIGH Carolina Power & Light (p) Central Illinois Light Columbus & Southern Ohio (p) 35 5.7 35-33 43 36 6.1 35-33 42 1/4 24 5.8 23-22 26 7/8 Commonwealth Edison 33 5.4 33-31 37 3/8 Consolidated Edison 36 6.1 35 40 5/8 Consolidated Gas of Baltimore 24 5.8 24-22 28 Dayton Power & Light 34 5.9 34-31 38 1/8 Houston Lightin, 23 4.3 22-21 26 1/4 Idaho Power (p 42 4.7 40-3 48 1/4 Lllinois Power Iowa-Illinois Gas & Electric 65.'4 36-3 27 41 3/4 31 7/8 Iowa Power & Light 23 6.1 23-20 26 5/8 Mtnnesota Power 35 6.3 35-32 40 1/4 Montana Power 27 5.9 27-24 32 1/4 Ohio Edison (p) 35 6.3 35 39 3/4 . mlahoma Gas 24 6.3 24-21 28 ; Pacific Gas & Electric 36 5.6 36-33 40 Pennsylvania Power & Light 31 6.5 31-29 35 7/8 Public Service of Colorado 27 52 27-25 33 Public Service of Indiana (p) 32 5.6 31-30 36 1/4 . Southern California Edjson (p) Texas Utilities P) 34 38 59 5.0 35-33 40-38 3497 35 8 Ut.ah Power & Ligh Vjrginia Electric 4 6.2 5.8 29-26 23-22 34 5/8 27 3/8 i Wisconsin Electric 25 5.6 24 29 3/8 These issues should be of interest to those investors concerned mainly with income return rather than capital appreciation. However, even a return over a period of time to the highs of early 1953 would be a worthwhile price move. June 12, 1953 (p) Prospectus available on request. EDMUND W. TABELL WALSTON & COMPANY 1 I ) my memor''ldum IS not have an inter-O! In to'be 50'me construEd as an offer or or all -of – the feCl..lrlfie's ollcilahon mentioned of offers to herein The f buy or slIlI any oregoing mater sIiei IcuhralshesbeenFropmreptlilmree.dtobyhmulsl Wahton & Co, a5 I matter -of olrnfanHymatplaorntnoenr tyh-e-rHeo.fs, ' based upon Information believed rehable but not necessarily tomolete, IS not gUIHanfeed as iltcurate or fmal, ilnd IS not,. Intended to foretlose Independent inquiry d