Viewing Month: August 1953

Tabell’s Market Letter – August 07, 1953

Tabell’s Market Letter – August 07, 1953

Tabell's Market Letter - August 07, 1953
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Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (SwHwld) OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lETTER August 7. 1953 The marKet continued its favorable action over the past week, Earlier in the week. the pace of the advance became a bit too rapid and. at highs of' 277,19 for the Dow-Jones industrials and 106,45 .for the rails, the mar'' ket was temporarily overbought, A couple of days of mild decline and conso'- Itdation proved to be sufficient technical correction and, by the week-end, the averages were back to highs of 276,54 and 107,36, The action of the I'Iils is of particular importance at this pOint in the technical pattern, 't'he rail average has two important price barriers that must be sUI'!!Iounted, 'l'iley are the early July high of 108,34 and the May high of 109,21. Ability tc' push th'ough these levels would most likely indicate an advance to above ..the December. 1952 high of 113,94, Failure of the rails to penetrate the July and May highs oirer the next week would be discouraging technical action for this important group, JI1y thoughts on the market .remain the same, I expect the present inter- !l!.ediate teI'lll advance to continue through August and possibly into September'. '1;he industrial average will most likely advance to at least the 285 level a.nd the rails might reach new high territory, However'. I do not believe that the present advance is the start of the b!.g upward move I expect to start in 1954, More consolidation and re-adjustment similar to what we have wit- r.essed over the past two yea's is needed first,Therefore. some profit-taking will be in order when the pres.ent'intermediate term advance shows signs of sIackening, 'rhere are no signs of this yet, I have just finished a new summary of Technical Patterns on Secondary StoCKSi'. Covered .n it are th.e technical market indicaGions on some 600 ,mllmon stocks that are generally considered below investment quality, There a.re a large number of issues that have relatively unfavorable technical pat- te-rns in the sense that the;)! either indicate lower levels over t.he longer teI'!ll or else show little indication of worthw'hile pI'lce movement over the fOl'eseeable future. A numbel' of issues of thls type are listed below Price Pice Price A, C. F. Brill 5 Adas Millis 32 A.laska .Tunea1. 3 Allied Mlls 26 .ilJ.l!er,Export Lines 15 er. Locomotive 16 Argo Oil 19 ;l('tloom Carpet 8 .Ashland Oil 15 Babbitt 6 Baldwirt-Lima 10 Barium Steel 7 Be.st & Co, 26 Budd Company 14 Ce,1tral Agurre 20 Chickasha Cotton 11 Clopay 3 Consol,Copperm.ines 8 Cont,Diamond Fibre 13 Ceo Press 9 Dalfega Stores 7 Daystrom Diamond T Motor Divco Corp. Florence Stove Follansbee Steel Foster Wheeler Gimbel Bros. Gotham Hosiery Ha'bison Walker Hecht Co. Holland Furnace Holly Sugar Lehigh Yalley Coal Mack Trucks Macy. R. H, Madison Sq.Garden Missouri-Kan,Texas Nat'l Container Nat'l Malleable Nopco Chemical Packard 14 11 8 19 14 17 15 7 26 26 15 17 8 11 23 8 6 10 32 17 5 Peabody Coal 5 Pfeiffer Brewing 18 Poor &.Co, 15 Reo Motors 19 Reynolds Spring 7 Royal Typewriter 17 Seiberling Rubber 10 Simonds Saw 40 Smith & Corona 18 Spencer Kellogg 15 Std ,Railway Equip, 12 U. S. Tobacco 19 Vulcan Detinning 17 Walgreen 26 Warer Hudnut 17 Wayne Pump 10 West Virginia Pump 15 White Sewing Mach. 9 Young Spring &Wire 26 Youngstown Steel Door 13 I would sell these issues on strength and purchase issues with clearer teJhnlcal indications, In the very low-priced category. Alleghany Corp (4). Fmerican Encaustic Tiling (7), Raytheon (11). appear more attractive for capital appreciation than some of those listed in the table above. In the lLIediU!ll.-lriced group I suggest B1aw-Knox (19). Beaunit Mills (19). Elliott Co, (27). National Gypsum (21) or New York Air Brake (20) . Only a limited number of this study is printed and it is not available for public distribution. Visit your nearest Walston office. They will have a copy on file, EDMUND W. TABELL WALSTON & CO. Thh memorand.l,lm Is t to be construed as an offer or solicitation of offel's to buy or sell any seCUrities From time to time Walston & Co, or any partner thereof, may have tin rnterest In some or !III of the securities mentioned herem The foregOing matenal has been prepared by us as a matter of information only It IS base! upon Information believed reliable but not neceuardy complete, is not guaranteed as IlCcurate or final, and IS not Intended to forecl05e Independent Inquiry

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Tabell’s Market Letter – August 14, 1953

Tabell’s Market Letter – August 14, 1953

Tabell's Market Letter - August 14, 1953
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, '………….,.. , . .',.', Walston &Co. !. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Swamld) OFFICES COAST TO COAST CONNECTE; BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lETTER August 14, 1953 The market continued very mixed last week with the volume dropping 'pelow 1,080,000 shares for two out of the five trading days. On Thursday, ,the Dow-Jones Industrials managed to edge ahead to a new intra-day high of '273.30 forthe summer advance. Some of the gain was lost on Friday, when the close was 275.71. , The Industrials still seem to have the potential of advancing to the ,280-285 range before the current intermediate-term rally is completed. The 1n1ermediate-term indicators are still not vulnerable. However, the rails are showing relatively poorer action and are locked in a trading range. At Frlday's low of 104.30 they were in between the June and July lows of 99.06 and 102.22 on one hand, and the July high of 108.34, as well as the May pigh of 109.21. ; Over the next few weeks, the rails must be watched very closely to uetermine whether an upside, or a downside, penetration of this important , trading range impends. ' Continuing my review of the various groups brings us to the — AUTOMOBILE PARTS & ACCESSORIES There are 49 issues listed on the New 'York Stock Exchange that fall into this broad classification. On the Auto- motive Equipment average (24 stocks American Investors Service), this group reached a high in March of 1953 at about 37 1/2. The recent low was 32. , Most stocks in the group, from a technical viewpoint, show more or less of ,a neutral pattern with no indication of a decided move in either direction. The long term patterns, in most cases, are relatively good. Of the more fa- vorable patterns, Borg Warner ,perhaps the most interesting. At around , p't'esent levels of 72, the stock yields 6.9. There is good downside support 'in the 70-65 area. On the upside, the technical pattern indicates a slow uptrend to 95-105. The 1953 high was 86 and the low was 70 1/2. Despite the lengthy strike at the Warner Gear division, only a moderate decline in earn ings is expected. 1952 earnings were 9.33 a share. ' Briggs Manufacturing is more speculative than Borg Warner, but it also has a favorable pattern. A high of 42 3/4 was reached in 1953. The 1946 high was 53 1/2. The stock held in a wide trading area between 22 and 40 for over Six years with most of the time spent in the 28-36 area. It was not until this year that the range was penetrated on the upside. The long term pat- tern indicates considerably higher levels and the 35-30 area should furnish good downside support. At 34 1/4, the stock yields over 11 on the 1.00 uarterly payment which was raised from 751 quarterly. 1953 earnings should be considerably better than the 2.93 shown in 1952 because of the steel strike last year. In addition, a non-recurring net profit of 3.40 from ' the sale of the English subsidiary is also available. Chrysler is Briggs' largest customer and there have been periodic rumors of a merger of the cwo companies, but this appears unlikely. From a technical viewpoint,Briggs appears to be an interesting price speculation. Other issues with favorable Jon3 term technical patterns include American Chain, Arvin Industries, imken-Detroit Axle, McCord Corp., Sheller Mfg., Motor Products, Motor 'Wheel, Stewart-Warner, Hayes Industries. In\the neutral classification I would now include Allen Industries, Amet'ican Bosch, American Metal Products, Bohn Aluminum, Bower Roller Bearing, Campbell Wyant, Clark Equipment, Clevite, Collins & Aikman, Dana Corp., Baton Corp., Federal Mogul, Fruehauf, Gabriel, GOUld National Battery,Hayes Mfb Houdaille-Hershey, F.L. Jacobs, Kelsey Hayes, King Seeley, Midland Steel, Murray Corp., National Automotive Fibre, Raybestos, A. O. Smith, Standard Steel Spring, Therrn,oid, Timken Roller Bearing. Most of these issues may work out favorably, but the patterns are not yet quite clear or more ti;n may be needed. . On the unfavorable side of the technical picture are Budd Mfg., Elec triG Storage Battery, Reynolds Spring and Young Spring &,Wire. I would switch these issues into the stocks listed in the favorable group. Although it Ls an excellent company, I would switch Thompson Products into Borg Warner. Thompson recently rallied from a June low of 46 3/4 to 54 and is 'near overhead supply. EDMUND W, TABELL WALSTON & CO. This memorandum i. not to be construed .1 en oR.r or solicitation of offen to buy or sell any lecurltles, From time to tim. Walston & COlor any partner thllreof, may have an Interelt In lome or aJl of the lecurltl.. mentioned herein. ThII foregoing mate,lat hal been prepared by UI as ,. matter 0 Information only It 11 boned upon information believed ,.liable but not nec.starU, complete, II not guaranteed as accurate or final, end is not Intended to foreclole independent Inquiry ' ' ……. … , …,…. ' ' ' … 3.. .,'''''.''''.' .,. . ' , ;. ' ' . . … ….. . . .;' …

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Tabell’s Market Letter – August 21, 1953

Tabell’s Market Letter – August 21, 1953

Tabell's Market Letter - August 21, 1953
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I——– . ;' …. Walston &Co. 1. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Switz.rland) OFFICES COAST TO COAST CONNECTEG BY DIRECT PRIYATE WIRE SYSTEM TABELL'S MARKET LETTER August 21, 1953 The reaction at mid-week found the rails relatively softer than the .. industrials. At Wednesday's low of 101.36, the rail group broke the July . ..low by 861 but held 2.30 above the important June low of 99.06. However, the relatively stronger Dow Industrials at Wednesday's extreme low of 270.06 held 2.76 above the July bottom and a good 9.31 above the June low of 260.75. ' . A short-term buy signal was given on the close Wednesday. In regard to the whole intermediate-term advance from the June lOWS, there has been no intermediateterm sell signal given. However, the market must rally durina tho current week to avoid such a sell indication. At the moment, it seems as if the market will attempt a further rally. But, of course, the June lows' on the rails must be watChed rather carefully because the rails have now eS'ablished a rather long trading range and the direction of breakout will . have significance. Southern Pacific is Just one example in the rails. SX hail held in the 43-47 range for a long time. Ability to rise to 48 would indicate 56-57. But a decline to 42 would indicate a dip to 34. Other rails have ,similar patterns. Continuing my review of the various groups brings us to the – AIRCRAFT-ffiNUFACTURING AND ACCESSORIES – The patterns of individual lssues in the group are quite diverse. This is understandable, of course, eeause of the uncertainty surrounding the defense program. There are three '-sEllies that appear to have outstandingly favorable patterns, They are BendiX Aviation, Garrett Corp., and North American Aviation. It is interest-.. iDE; to note that all three issues are concerned with speCialty growth air- .craft manufacturing or with other growth potentials. , Bendix Aviation reached a 1953 high of 68 1/4 and a low of 54 1/8 and is now selling at 56. The yield is 6.6 based on the 1952 dividend of 3.75. From a technical paint of view, there is strong support in the 55-50 area. h' long term upside potential is 80-90. BendiX, in my opinion, is a very 'int.eresting purchase for both generous income and substantial price appre- cia.tion. 1952 earnings were 7.22 a share and net for the twelve months ended June 1953 rose to 8.30. . Garrett Corporatio is a leading manufacturer of high-altitude and high-speed aircraft equipment. It is a speCialty type company with an ex- cellent growth trend. The 1952 high was 34 3/8 and a low of 24 was reached th1s year. At present price of 29 the stock yields 5.5 on the 1.60 divi- Iiend. Just declared 10 stock dividend. Stock appears to have corrected the sharp run-up to 34 and may be forming a new reaccumulation area. This may t.ake further time but there is good support not too far below the market 'and the stock should be an excellent purchase during general market weak- ness because of its good growth potential. North American Aviation's major production item is the F-86 Sabre ;1e'c fighter. The company is also engaged in guided missile and atomic energy Qevelopment. It is more speculative than the two issues mentioned above, but nas a very interesting long term appreciation possibility. At its present price level of 17 it is near good downside support at the 16-14 level. I consider this issue outstanding among the lower-priced aircrafts. The technical patterns on other aircrafts are not too clearly defined. EeFFY Corp. has a very good long term pattern but there is a possibility l;hat it may work a bit lower first. For that reason, I am giving it a neutral rating, but it should be purchased on moderate price declines. United Aircraft and Bell Aircraft are interesting because of their helicopter divisions. There is an excellent long term growth potential in this field. his also applies to Piasecki Helicopter which is unlisted and on which I ,ave no technical work. However, the patterns on both United Aircraft and Bell do not appear complete and some further work may be needed. They both 'loo,. like interesting long term purchases. Lockheed Aircraft has an excellent upside potential, but there is no Definite indication that the pattern will turn out favorably. It is also uifficult to figure out the patterns on Boeing Airplane and on Douglas Air- frft. The patterns are too vague to arrive at a definite decision.While ad- jait t;ing that some of the other issues might also advance, I would prefer to con,entrate my commitments in this group in the three issues with the clear- est patterns, namely, Bendix Aviation and Garrett Corp. and North American vll.tion. Would also conSider Sperry Corp., United Aircraft, Bell Aircraft and Piasecki. EDMUND W. TABELL (Wr.Ltten at Banff,Canada) WALSTON & CO. Thi, r,emorandum II not to 1M construed as an off.r or loUdtatlon of offen to buy or lell any lecurltles. From time to time Walston & Co, or any partner thereof, may have an int.,est in lotne or an of the securities m.ntion.d h.r.in The for'90inQ mat.rlal hal been prepared by loll as a matter of Information only It h baled upon Information beli.ved r.liabl. but not n.cuwrlly compl.t., II not Quarantd as accurat. or final, and is not intanded to foreclose Independent inqUiry .. . .. ………………. …. .. ……. ,. '''' , . . .' ; .' ; ' ; ' .; , . ;. 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