Viewing Month: June 1954

Tabell’s Market Letter – June 04, 1954

Tabell’s Market Letter – June 04, 1954

Tabell's Market Letter - June 04, 1954
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r Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,t,laod) OFFICES CQASr TO COAST CONNECTEr. BY DIRECT PRIVATE WIRE SYSTEM TAB Ell'S MARKET lEnER . June 4, 1954 / As one looks at the general market pattern, it becomes very evident hat the action of the averages bear no relationship to individual stock. he Dow-Jones industrial average has advanced'from approximately 255 in/ eptember, 1953 to approximately 330 today. This is an advance of seventyfive pOints, or roughly 30 in a period of a little over eight months. everal high grade investment issues have bettered this advance. For example, General Electric has advanced over 75 during this same time eriod. On the other hand, a great many issues have done little marketwise during the same period . .It would appear evident that some issues have advanced substantially to discount the over-pessimism of mid-1953. Probably issues of the type of General Electric, Union Carbide, Minneapolis Honeywell, DuPont, etc.,are in need of a resting or consolidating period. This may result in very little price movement in the general averages over the next six months or so. I have stated in a previous letter that it is probable that the Dow-Jones industrial average will fluctuate in a trading area between, roughly, 335 and 300 for the next six months or longer. However, this statement taken by itself is no more a picture of what may happen in the market than the statement that the market has advanced sharply from 255 to 330. It is quite possible that some of the issues of slightly lower quality than the blue chip leaders of the last eight months may stage a fairly grod advance. There is too wide a discrepancy at the moment between Grade A and Grade B issues. It would appear more likely that the spread between these groups will be narrowed by an advance in the light blue chips rather than a sharp decline in the h'gh-grade issues. An advance in light blue chips T.ight result in little change in the averages as most issues of this type are not part of the various averages. As far as the low grade, speculative issues are concerned, I see no great evidence in my work of an immediate worthwhile market move. There will be exceptions, of course, but I believe holdings should be concentrated in medium quality issues. TherJ are. ,al1llmb.e.ro.fissuesil1my r.e.cDmmended..,.l.ist thathave about reached their upside objectives and in capital appreciation accounts could be switched into other situations with better profit potentials. They are BENDIX AVIATION which has advanced sharply from its recommended level of 47 (after adjusting for stock dividend) to 80 1/2. The upside objective for this issue on my technical work is 80-90, so I would be inclined to take profits on further strength. INLAND STEEL was my original recommendation in the steel group and has advanced from the 36-40 level to a high of'59 1/8. My upside objective on this issue was the 60-65 area. I believe U. S. Steel at around 48 offers better price appreciation possibilities and I would be inclined to switch from Inland into U.S. Steel. INTERNATIONAL PAPER has moved from 45 (after adjusting for 10 stock Ldividend) to a high of 71 3/4. My upside objective on this issue was the 70-75 area and I believe the stock may have to 'undergo a consolidating period. Here also I would be inclined to t&ke profits on strength. NORTH AMERICAN AVIATION was originally recommended in my letter between 17 and 20. The stock has advanced quite sharply to a high of 35 1/4. For the longer term this very excellent company indicates higher levels,but for the time being it appears high enough. My technical work suggests an intermediate term objective of 36 which has almost been reached. Here again I would sell on. strength and shift. into situations that appear more under- valued. PHILLIPS PETROLEUM also appears high enough for the time being. This issue has advanced from a recommended level of 50 to 67 1/2.The intermediate term objective is 69 and I would be inclined to take profits on further strength. The following issues appear to be interesting replacements for those mentioned above. In most cases the quality is a bit lower, but they are all better grade companies Allied Stores, Celotex, Flintkote, Hewitt-Robins, Lowenstein, Pennsylvania Salt, Pullman, St.Joseph Lead, Simmons, United Fruit, U. S. Steel. These issues will be reviewed in my next bulletin, together with the remaining issues in my recommended list. EDMUND 1'1. TABELL I'IALSTON & CO Thl may memordndum have an Inl .. 'f('tno,tn 10 be lome contrued or 311 of bMed upon InforlT'i1!lon believed rel'db'e tb'IhIuelanneOcoIfufrndre'ceeolrlmoroellnlly(tdIoc'nloelmidpoln htoeerf ,eionf,fsernT' ohtieo buy or sell /lny IE-curd,es foregoong qu,Fonteed moaledoccdul r hilS ate b or From lime een prepdred final, dnd II to !.me Walston & Co, or 'Iny partner ther('of, by us ,H a maller of ,nlormail0'd only 11., not Intended 10 lore close Indepen ent 1IlQUy

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Tabell’s Market Letter – June 11, 1954

Tabell’s Market Letter – June 11, 1954

Tabell's Market Letter - June 11, 1954
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h ,— Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA lOS ANGELES SAN FRANCISCO LUGANO (S.,hedaod) OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 11, 1954 The market had its long overdue technical correction and the Dow-Jones industrials declined to a low of 315.66 and the rails to 105.23. At the lows, both averages were near the strong support points of 315-310 on the indus- trials and 105-103 on the rails. As I have stated in previous letters, I do not believe that the market is vulnerable to a sharp decline of intermediate term proportions. The mar- ket, as measured by the Dow-Jones industrial average, has advanced 75 points in eight months. This steep advance can be corrected technically in one of two ways. One way would be a one-third to two-thirds retracement of the 75point advance. This would mean ,a declineto 305280. The, oXher way would be- a- long consolidating period'before the market continues its advance. I favor the latter. I believe the market will hold in a broad trading area bounded roughly by 335 and 300 for an extended period of time, perhaps as long as six months or a year. During this period, individual issues will act indenpendently of the averages with many issues staging worthwhile advances. This consolidation period will be followed by the next stage of the broad advance with the Dow-Jones industrial average certainly reaching the 1929 high of 386 and probably advancing considerably above that old landmark. Below is the start of a review of the issues in my recommended list. It will be continued in next week's letter. ABBOTT LABORATORIES (47) continues to hold in the broad 40-49 range. More time may be needed to broaden the pattern. Would buy in the lower part of the trading area. ALLEGHENY LUDLUM STEEL (33) was recommended at 28. The stock appears to be in a slow uptrend. The recent high was 34. The potential base indicates 40-45, but the pattern may broaden. ALLIED STORES (45) was suggested for purchase at 38. It has broken out on the upside of the long 36-40 trading area, in which it held for over two years, to reach 46 1/2. There is some supply at 44-46 that has slowed ac,tion but the-upside obj-etive is -55-65.'—' – — – – – , – – ALLIS CHALMERS (55) was recommended in the 42-45 area. It has moved up to 59 and reacted to 54. The stock appears to be in a slow uptrend channel. The outer limits of the channel are now 67 and 51. Would add to holdings on moderate price declines. ALPHA PORTLAND CEMENT (52) The stock has moved from a 1953 low of 40 to a recent new high of 54 5/8. Would continue to hold this issue. The long term indication is 65-75. ALUMINIUM, LTD. (58) This issue has advanced sharply and may be in need of some technical correction, but the long term pattern remains excellent. Would hold and add to holdings if the 55-50 level is reached. AMERICAN POTASH & CHEMICAL (44) This issue will be reviewed in a later letter. AMERICAN RADIATOR (17) This stock has formed a very strong long term techni- cal pattern. It held in the broad 12-17 area for over four years. The upside penetration indicates an intermediate term 27 followed by higher levels later. There is some supplyat 20-22 that may slow action. Recent high was 18 5/8. Stock appears to be a purchase on minor declines. AMERICAN TELEPHONE & TELEGRAPH (166) This stock has been my favorite in- vestment income issue. It has reached its first objective at the high of 170 but the next objective is the 171-179 area. There is support at.lo5. AMERICAN VISCOSE (34/ This stock may require some further patience. Appears t be building 10lp a base in the -broad- 30'38range–;- Buy on-weakness. BABCOCK & WILCOX (49) Has moved up nicely te, 53 but still indicates high- er levels over the longer term. The intermediate objective is 58-68. BETHLEHEM STEEL (68) Has advanced sharply from the 1953 low of 45 to 71. It was recommended recently at 62 1/4. There is near term support left at 65. The long term objective is 80-85. The stock should be held and bought on price weakness. BLACK & DECKER (44) has broken out of the long term 32-40 accumulation area. Itsrecent high was 46. The intermediate term objective is 45-51, but the long term objective is 70-80. Would add to holdings on minor price weakness. LAW KNOX (20) This issue has been extremely slow but has a strong base pat- tern with an upside indication of 28-33 followed by even higher long term objectives. Patience may be required, but the present 19-20 area is a buying range. EDMUlffi '.1. 5'ABfLL iThh mflmorandum 15 not to bll C0n51rued maV have an Intllrest In some or 'III of b,ned upon Informallon beheYed reliable IH an offer or soliCitation of offllrs 10 thll SIICUrities mllntloned herein The bul nOI necenar,lv complete, u nol fbouryegoOrinsgellmaatneYT.\!MjI'tC-JJblliiUEf!l.tnl1ln/11lrVe,!eIe.t;I.!A.!Jimsc Wahton as a rna gua'lInteed a5 accurate or 'Ina I, .tInd IS not Infended 10 tfoerrCeoc0losoIenrfoIarnnmdvellpr1ea0n1r'1tneoenr I the'lof y IS InquirY

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Tabell’s Market Letter – June 18, 1954

Tabell’s Market Letter – June 18, 1954

Tabell's Market Letter - June 18, 1954
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– r ,,I Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,.,Id) OFFICES COAsr TO COAST CONNECTE; BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 18, 1954 The Dow-Jones industrials have regained almost all of the decline from the early June high of 330.45 to last week's low of 315.66. The week's high was 329.49. The rail average did even better and advanced from a low of 105.23 to reach a new 1954 high of 112.68. This is just a shade below the late 1952 high of 113.94. The technical pattern suggests that the averages are no longer on a one-way street. \-Ie have witnessed a seventy-five point advance in the industrial average over a period of eight months with, until last week, hardly any worthwhile corrections. I believe that over the next six to nine months or more we will witness several sharp moves in both directions. These moves — – will be contained-in, roughly, the broad 335-300 area. — The action of the individual groups and issues will continue to be selective and probably even more selective than over the past months. Some issues appear high enough, others are behind the market and could advance. Still others show no indication of any important move. There will be plenty of opportunities for advantageous switches in portfolios. After this resting, consolidating and adjustingphase is ended, I expect a continuation of the advance. Below is a continuation of the review of my recommended issues BUCYRUS ERIE (27) appears to be in a slow uptrend to the 36-43 range. Action may be slow but the dividend return is good and there is a nearby support level at 25-24. BURROUGHS (20) has finally broken out on the upside of the long 13-18 area in which it held since 1946. The stock has a very interesting technical pattern and indicates a long term price objective of 34-37. There is support at 18. CELOTEX CORP. (22) has broken out of the long 14-21 base and has a long term price objective of 31-38. Would add to h61dings on minor declines. CERTAIN-TEED (17) is still in the confines of the broad 12-18 range. This appears to be an accumulation area with a sizeable long term objective. -C-ontinueto ho'lti-and-buyon–we-a'kness.— -.—. — — CHAIN BELT (38) This issue, which has paid dividends since 1902, appears to be behind the market. It has a very constructive technical pattern and is suggested for income and patient holding. The long term objective is 65-80. COMBUSTION ENGINEERING (51) has advanced from a recommended level of 45 to reach a high of 56 and has declined to present levels.Would continue to hold and add to holdings on moderate declines. Next upside objective is 65. CORNELL DUBILIER (28) rallied very sharply from 22 to 32 and appears to be in a consolidating phase between 29 and 26. viould continue to hold and buy on weakness. The long term objective is above 40. CRANE CO. (32) has a strong otential pattern with an intermediate term in- dication of 40-45 and considerably higher levels over the longer term. It is near a strong support level. EAGLE PICHER (22) has done little marketwise but is an interesting issue for good yield and patient holding. ELLIOTT CO. (26) still appears to be in a slow uptrend channel with sup- port close to the market. The long term objective is impressive but near term action may be slow. EL PASO NATURL GAS (41) has advanced quite sharply from the recommended level of 30 but the technical pattern suggests a further advance to about the 50 level. There is downside support cit- 4D38. – – – FLINTKOTE \34) has broken out of the long 22-33 tradlng range and indicates an initial objective of 41-45 followed by ultimately higher levels. Jm interesting holding. FOOD MACHINERY (43) has moved from a recommended level of 34 to 44. Some consolidation may be needed but there is an objective of 45-49. FRUEHAUF TRAILER (26) has held in the 22-27 area since 1952. jen upside penetration would indicate 36-42. An interesting speculation but patience may be needed. GENERhL RAILVIAY SIGNAL (29) has done little marketwise. It is in a strong support area however, and appears to be building a base in the 25-31 range. Buy for long term appreciation and income. EDMUND W. TABELL IALSTON & CO. Th, memorandum ,s not to be contrued a an offer or soliCItation of offers to buy or sell any sccurdle5 From time to lime Walston & Co, or any partner thereof, mlly hi!e all Interest In some or ilil of the securd,es mentioned herein The foregOing mter'I1 has been prep'lred bly U as a mtter of .nformat,,)n only It I based UPOfl Inform'lilon belIeved reh1ble but nol necessarily complete, II not qUdr1'11eed as accuraie or final, and not Intended to foreclole Independent Inqulrv

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Tabell’s Market Letter – June 25, 1954

Tabell’s Market Letter – June 25, 1954

Tabell's Market Letter - June 25, 1954 page 1
Tabell's Market Letter - June 25, 1954 page 2
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, ; Walston E,- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,,d) OFFICES COASl TO COAST CONNECTfC BY OIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lETTER June 25, 1954 Both averages reached new high territory for the move during the past week. The Dow-Jones industrial average reached the highest level since Octo- ber,1929 at the weekls high of 335.09. The rail average, at 114.59,reached a new high since October 1930 and also penetrated the late 1952 high of 113.94. The market has shown excellent action in its recovery from the mid-June dip and still appears headed higher over the near term. The rail average appears headed for the 120-122 area and, while there is no definite count indication on the industrial average, some individual industrial issues still indicate higher levels. – As' readers of this letter know,' I 'have been extreme'ly-bullish 'on- the stock market since September,1953 and I still continue to feel that, over the longer term, the market will move much higher. However, a wofd of caution must be injected at this point on the intermediate term outlook. The industrials have advanced almost eighty points or over 30 in nine months with no correction of as much as 5. While a great many stocks have had only nominal moves and others still indicate moderately higher levels, an increasing number are reaching the upside objectives outlined by my work. On the favorable side, very few issues have as yet built up vulnerable top patterns. This will take some further time. The technical pattprn,as it looks today, indicates some further strength followed by a long consolidation period before the advance is resumed. During this consolidation or adjusting phase I do not expect the industrial average to sell much below 300. For intermediate term traders, the pattern suggests some profit taking on strength. For long term investors' in good, sound equities, there is no reason to change position. After a consolidating phase, the market should move much higher. Below is'a write-up on American Potash & Chemical B. This stock was first suggested in the low 30s, but it still looks attractive for long term holding. —- Statistics A/olERICAN pOTASH &. C.HEMICAL,B….,- I believe this issue is an excellent Current Market Current Dividend Current Yield 49 2.00 4.1 vehicle for long term capital appreciation. It combines a steady earning power in low profit-margin fertilizer chemicals with exceTIent growth poten- Long Term Debt Preferred Stock Common (shares) 2,700,000 9,200,000 431,227 tials in higher profit fine chemicals and rare metals. The management appears to be embarked on a long 'ange program to transfer the emphasis on the com- Net per Share,1953 Net per Share,1952 Sales – 1953 Sales – 1952 4.01 3.26 22,500,000 18,100,000 pany's output from lower grade and lower profit margin products such as potash into higher quality chemicals. In 1953, the company devoted approximately 3 of its sales to research and Market Range 1951-1954 49 3/4 – 28 1/4 it appears that research outlays have been stepped up this year. Until 1930, the bulk of the potash used in this country had been imported principally from Germany. The only known domestic deposits were American Potash at Trona, California, on Searles Lake in the northern part of the Mojave Desert. At that ,time, these d,posit,s, were largely untapped because of-inadequate refining facilities. In'the last twenty-five years, the situation has radically changed. Discovery of large deposits near Carlsbad, New Mexico, and improved facilities have enabled the industry to reach a point where it is now able to meet virtually full do– mestic requirements. In addition to the American Potash operation, about 85 of the present industry output is contributed by three companies operating in New Mexico. American Potash is the only producer of potash on the West Coast and sppiies substantially all the potash requirements for that area. Unlike ts competitors that operate in New Mexico, it recovers potash and other valuable minerals from salt brines pumd up from wells in Searles Lake. j -l -2- There are no miners and no mine shafts and no ore mined. Huge pumps lift the brine through insulated pipe to the refining plant at Trona where,after a complicated refinery process, the minerals are extracted one by one. The principal products recovered are potash,borax,soda ash, salt cake and less- ,er quantities of bromine and lithium carbonate. These products are used in the manufacture of industrial chemicals, glass,soaps,detergents,kraft paper and board, pharmaceuticals,dyestuffs,porcelain enamels and for processing xtiles,leather and oils and,of course, for agricultural purposes as ferti- lizer components and for the correction of soil deficiencies. American Potash owns in fee 2,560 acres and holds,under long term leases from the United States, an additional 5,960 acres with rights of mineral re- moval. Reserves in the upper deposit,from which the company has extracted 1Jr1,ne frol1)j;;I1beginning of operations in 1913,are estimatedto be sufficient for about 35 years of operation at the present annual pumping rate. The new- ly developed lower deposit is believed sufficient to meet estimated annual requirements of the new plant for over a hundred years. American Potash's cost per ton of potash produced have remained high and will continue to remain above several other producers because of high fuel oil costs involved in the Searles Lake unit.This situation cannot be altered nor does it appear that natural gaa will ultimately be a solution to lower costs. The management has,of course, recognized the cost problem and is at- tempting to upgrade the quality of its production by moving into higher priced chemicals where it can obtain the benefits of potentially higher margins. The initial step in this program was the acquisition of Eston Chemicals, Inc.in 1952. Eston's products complement those of Amer.Potash as many of them are derived from the raw materials produced by the company. The company has expanded its research program. A new laboratory was opened in 1953 at Whittier, California, which supplements the Trona laboratory and pilot plant. Research has been developing along several lines, but principally in chemi- cals based on boron and lithium. Boron is chemically related to selicon and may have complementary usages in the silicon field. Research in boron com- pounds has developed a refrigerant,a new chemical for fire extinguishing that is indicated to be vastly superior to carbon tetrachloride,a possible hlgh energy jetfueLand a water-.based withpaint -fireproofingqualities. Extensive rese-arch has also been done on lithium compounds. In order to increase the small by-product output of lithium,American Potash,along with American Metal Co.Ltd.and Selection Trust,Ltd., is participating in the development of a large lithium-beryllium property in Southern Rhodesia.Ore is now being marketed and the construction of a chemical plant for lithium salts is a probable near term development. While not an immediate addition to earning power, the lithium operations hold definite long term promise to- -ward a helpful influence on earnings. Prospects for 1954 are favorable. Net for 1953 equalled 4.01 a share.For the first quarter of 1954, American Potash earned 1.01 as compared with 961 a year earlier.Earnings of at least 4.50 a share for 1954 appear to be a reasonable estimate. Dividends will remain conservative for some time to come.Average earnings for the past decade have been approximately a 3.20 average with average rate of dividends of 1.75.Company has operated at a profit every year since incorporation in 1926 and has missed only a few dividend payments. These omissions occurred in 1927,the first year of opera- tion as a corporation,and during the depression period of 1932-1935.Since then,payments of at least 1.50 have been made annually and in recent years have been at the rate of 2.00 annually. Book Value as of December 31,1953 was 44.15. The stock sold at a high of 109 in 1940 and at 59 in 1945. The stock has an exceedingly strong technical pattern for the long term. My projections indicate an intermediate term objective of 75 followed by much higher levels over the longer term. There is downside support around the 40 level in the event of a general market decline. The stock has appeal as an equity in a company with a sound base in fer- tilizer chemicals.It has a stable earning power of 3 to 4 which nearly supports the current price of 49.In addition it offers the romance of poten- tial growth in rare metals and fine chemicals. The small amount of shares outstanding is a favorable factor.The stock is available at a reasonable price to earnings ratio as compared with other chemical shares selling at a high multiple of earnings representing optimistic distant forecasts. EDMUND W.TABELL WALSTON & CO. ,Ia. in.

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