Viewing Month: August 1954

Tabell’s Market Letter – August 06, 1954

Tabell’s Market Letter – August 06, 1954

Tabell's Market Letter - August 06, 1954
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–'j Walston &Co. MEMBERS NEW YORK STOCK eXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGElES SAN FRANCISCO LUGANO (Swdwl.,d I OFFICES COAST TO COAST CONNECTE'C BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER August 6, 1954 The market is entering a more 'speculative phase. The recent increased pace of trading and the erratic intra-day movements indicate that the specu- lative trading public has become increasingly active in the past few weeks. The skeptics who doubted that The Coming Advance in Common Stocks started in September are now becoming convinced (after a 36 advance in the indus- trial average in ten months – with some issues climbing over 100) that we are really in a bull market. The short term trading public is taking the ball away from the inves- tor. Some of the blue chip leaders of the advance have not reached new highs in several weeks. New faces have taken their places in the daily list of new , –hi-g-hs– Many of these issues are- of -secondaryand sometimes tertiary grade. This does not imply that the market is immediately vulnerable. This speculative phase has apparently just started andmay last for some time. vIhile some of the secondary issues are high enough,there are many others that still appear undervalued as compared to some of their higher grade neighbors. Also many of the lower grade issues have not yet reached the stage where they are overvalued. In fact, some of them have not yet even moved. Recent action,hawever, does indicate that both the investor and speculator should become increasingly selective in new purchases and be on watch for signs of an overspeculative condition. ' Ten montrs ago, many issues had a downside risk of 0 as compared with an upside potential of 50 or more. 'Now many issues have an upside potential of 10 as compared to a possible downside risk of 10 or 15. The odds today,after a ten-month advance, are not as favorable as they were in September or January, or even March or May. From a technical viewpoint, many issues have reached, or very near- ly reached, the upside objectives outlined by the 1951-1953 accumulation basps. However, very few have as yet built up vulnerable distribution tops. If this is going to occur, considerably more time will be needed in churning back and forth on heavy volume with stocks passing from the strong hands of investors into the weaker hands of short term traders. Quite some- f'lme wi 11-15eneeded- to comp-lete tnepatern- and&ample –wafn — ing signals should be given. The alternative pattern would be a resting or consolidation phase before the advance is resumed. There are many other issues that still indicate higher levels for both intermediate and longer term. It is possible that the intermediate objectives may be reached shortly followed by a prior consolidation phase before much higher long term objectives are eventually reached.In any e- vent,very few of these issues appear vulnerable except for normal tech- nical recessions. The overall picture still continues to look like the pattern out- lined in my article of July 8th.After some possible further strength the market should have a resting period for a considerable period of time. Just how much further the advance can continue in terms of the average is entirely problematical. At a level of 350,a ten-point advance or decline is only about 3.Strength in secondary issues could show little reflec- tion in the averages.In my opinion,the long term advance still has a long way to go. I still have a minimum 450 in mind with a possible 600 or high- er. But remember that the market has advanced almost a 100 points in ten months. A normal technical correction could carry the averages back to the 320-300 zone in the next few months. . The long term investor in growth stocks should not disturb his hold- – ings.The long term growth will continue.Some issues,however, appear high – enough for the moment. New commitments should be confined to groups behind themarket.Oils,on minor weakness,would fit into this category.The invest- or whose main objective is income should continue purchases in common stocks as funds are available.There is still a wide spread between stock and bond yields.The intermediate term trader for capital appreciation should forget the averages and concentrate on individual issues.Stocks 'should- ,be sold – as upsiCie obj ectives are reached and replaced by issues that appear undervalued.This requires patience but pays out in long run. The short term trader who is trying to scalp a few points will have the benefit of sharp moves in both directions in the present speculative phase. Good guessing to you! Your guess is just as good as mine. – EDMUND W. TABELL liJ,,LgTON lie GO. TIlls mcmorclndum IS not to be COI15trued as an .offer or sol,cltahorl 01 offers to buy or sell any sccurdiCS From time to I'me Wellston & Co, or 'lny fclrlner I thcf eof may hdve an Interest In some or all of the securltlls menltoned herein billed upon InfOrmdllon believed reliable but not necenorlly complete, II The foregOing malenal has been prepared not gUdrdnleed oll d((Urate or !moll, dnd bv not us as a Intended molller of ,n to foreclose foIrnmdeapeIonnenonl y 1t IS ,nquHy I

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Tabell’s Market Letter – August 13, 1954

Tabell’s Market Letter – August 13, 1954

Tabell's Market Letter - August 13, 1954
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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 (Sw,tmldl OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER August 13,1954 The changing character of the market was emphasized by last week's action. Again, the leaders of the advance were the secondary stocks while the blue chip growth and investment issues rested. I expect this type of action to continue for quite some time. The market has definitely entered a more speculative phase. This should cause no immediate concern despite the fact that the market has risen for over ten months. The blue chip issues have so far outpaced the secondary and speculative group that a narrowing of the gap was a foreorda111ed c-on-clusion. – -Of c-ourse;,-a narrowing of the gap -cQuld — be brought about by a decline in the blue chips while the more speculative sectors of the market rested. But the better grade issues, while high enough, show no signs of distribution. It would appear that the pattern favors a resting period for the blue chips and a continued advancing phase for light blue chips and finally the low-priced issues. When the last phase is reached, the market will be really vulnerable. This letter has long been pointing out the undervaluation of many light blue chip issues. Some of these have already started to advance. American Potash, Babcock & Wilcox, Cornell Dubilier, Mead Corp., North American AViation, Penn-Dixie Cement and Sperry are examples. However, there are still quite a few that are still selling below their 1946 highs despite higher earnings and dividends. While the gap has been narrowed , it is still too wide. The low-priced speculative issues have fared even worse in the market advance. Many of them are still selling close to the lows of the past five years. In many cases, this action is justified by the facts, but there are also quite a few issues that are undervalued. The danger in the situation is that the uninformed speculator might start to buy issues regardless of quality just because they are – – -behind the market and loiit p-riced7This could eventluiny'result in a vurnerable pattern, but it appears that this situation does not prevail today. As time goes on, more and more selectivity and caution will be required, but we are entering a phase where the laggard issues could move quite rapidly. Several issues on our recommended list have reached price objectives and are being removed from the list. ALPHA PORTLAND CEMENT recommended at around 40, reached a high of 66 3/4. The upside objective was 65-75. Sellon strength. ALUMINIUM,LTD. has moved up from 45 to 74 3/4. Would accept profits on strength. gETHLEHEM STEEL has moved from a recommended level of 62 1/4 in April to a recent high of 82 1/2. The upside objective was 80-85. Ivould switch into Republic Steel or U. S. Steel which are still below their objectives. FOOD. MACHINERY has moved up from 34 to a recent high of 48 3/4. The upside objective was 45-49 so I would be inclined to take profits on strength. MEAD CORP. has advanced—from the 23-28 area –;'nd is now ntering the'39-43 upside objective area. SPERRY CORP. has advanced from a recommended level of 52 to 78 3/4.The long term pattern suggests an objective of 75-100. Would take profit on strength. As replacements for the issues above,suggest Crane & Co., Yale & Towne, Hewitt-Robins, or Pennsylvania Salt. EDMUND W. TABELL WALSTON & CO. TIlls memordndum 1\ not 10 be construed (1\ !In oHef or \oll(llal,on of oHer to buy 0' sell any \ecUflll5 From lIme 10 hme WIlon & Co or ny PMlner Ih of rIll h.,j,e II IlIlpr11 In lome or 'III of 'h U(urll,el mcnllored hereIn The loreqolng mdle!I1 MI\ been prep'ed by UI al a m!ltlcf of Inlormdhon 01'11) II IS b ''''0 UIlOn In' mMlon beeed rtll'lblc bul 1'101 nt'CUI!Iflly complete 1\ nol qU'I'lntcd as dccurate or Iln1 (lnd II not Interded to forcclole Indepcndent Inqul

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Tabell’s Market Letter – August 20, 1954

Tabell’s Market Letter – August 20, 1954

Tabell's Market Letter - August 20, 1954 page 1
Tabell's Market Letter - August 20, 1954 page 2
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Walston 5- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK . PHILADELPHI,A, LOS ANGELES 'SAN FRANCISCO LUGANO (Swit,ldl -,OFFICES COAST TO COAST CONNECHC BY DIRECT PRIVATE WIRE SYSTEM , TABELL'S MARKET LEnER August 20, 1954 The market has rallied back to the highs of late July with the Dow-Jones industrials during the past week at 352.27 as compared with 351.50 and the rails at 121.50 as compared with 121.01. However, many individual issues have moved sharply above thei,r earlier highs and probably an equal number are selling well below their earlier peaks. This type of action will continue. There are still no signs of impor- tant distributions, but many issues will rest while others take over. There are many issues amply priced, quite a few undervalued and very ..few-,,-vulnerahleo moreJ,hantheusllalt,echnicalcorr.e,ions . . ,- High Yield's, in good stocks are becoming increasingly difficult to find. However; there are a number of listed stocks of lesser known companies that are still available on an attractive yield basiS. The five stocks mentio'ned below are all listed on the New York Stock Exchange. They all yield 7 or better. They are all in a sound fi- nancial position. One has paid consecutive cash dividends for over five years, one for thirty-five years and three for over fifteen years. All have interesting technical patterns with a possibility of capital appreCiation over a period of time. While these stocks are not of high grade investment quality, they certainly can be classified asbusinessmen's risk. Their purchase is advised for those investors interested primarily in income but also desirous of some opportunity for long term capital enhancement. They are not trading issues in the popular sense of the' word. In most instances, six months earnings are below 1953 which accounts for the high yield but prospects favor some improvement in the second .half. , CITY PRODUCTS sells around 35 and pays 2.50 annually to yield 7.2. The company is the largest distributor of ice to railroads and'TeTrigerator l'in-es. 'It–operates 'dairieS 'if! Six scaLe;, uwn; five breweries, operates coal yards, bulk fuel oil stations, cold storage warehousesand has interests in oil and gas properties in Oklahoma and Kansas. Earnings have been relatively steady and have averaged around 3.90 annually since 1946. 1953 earnings were 3.09 and are expected to show relative'ly little change this year. Dividends have been paid since 1894. The stock sold at 44 1/2 in 1946. Since that time, the stock has held in the 34-25 area until it recently reached a new high at 35 3/4. 'I I i 1 I i ,I il J Ii it I, i ;' ….. ii' \ DeVILBISS CO. sells at around 21 and yields 7.1 on the 1.50 annual dividend. The company is a leading producer of industrial spraying systems used in applying paints and lacquers and other types of coating materials. Earnings were down last year to 2.46 but have averaged about 3 annually since 1946. Earnings for first six months were 1. 03 against 1. 53 in 1953. Sales have increased from 4.7 million in 1939 to 19.1 million in 1953. There is no funded debt and only 300,000 shares of common outstanding. Book value of common is over 38 per share and net working-capital is equal to over 25 a share. Dividends have been paid since 1918. The technica-,l,pa-ttern su— g-g-e-st–s… I ' ! t gh-.e – le L v el …. s overa…Qeriod ,. – oftime '– — LEES (JAMES) & SONS sells at around 25 and pays 2 to yield 8. It has shown relatively steady earnings considering that it is in the volatile carpet industry. 90 of sales are in carpets and 10 in wool yarns. Earnings for 1953 were 3.76 and have ranged between 3.08 and 6.22 since 1946. Six months earnings for 1954 were 1.02 as against 1.93 in 1953. Dividends have been paid every year since 1895 with the exception of 1938. Financial POSition is sound with cash items at the year-end exceeding all current liabilities. The technical pattern is favorable and higher levels are indicated over the longer term. 01Th,\ mdy memOlo!lndum II not 10 be hdve dll ,nte'st ,n some construed or .!lit of ,,\ 'In oHer or loldal,on of offen to the iecur,hel menlloned here,n The buy or le 10,egol1')g l t i)rly lelcu, t let, m!te! ,n e i Ft nroimrep1mreI'd t t,m Wllton bY 1.31 o!I ma t u I dtd to & Co Uer loredc or ,n ue t .tn po!I,tner the'l'of ormdt,on ollly It II ,ndependent ,nQu,v b,.l\ld ,pon ,nl,mM,on be',elled reliable but nOI ntceullrdy complete, 's not gUClr!nleed as .!Iccuf,He or ,na, lin 'i nc ,n en ,111.,, ., … RAYBESTOS-MANHATTANsells at 43. and yields 7 on the 3 annual dividend which was covered-byearnihgsor5.35 in 1953. Earnings for first six months of 1954 are 1. 95 comparedwi'th 2.79 in 1953. Com- pany has a well diversified, ,output wit,h rp,lqcements a large portion of sales. The company manutactures automotive friction products, mechanical rubber goods ,and miscellaneous items ,such as asbestos textiles, fibrous glass and bowling balls. The Cassiar Asbestos Company was acquired in 1953. There is no funded debt and 628,100 shares of common. Finances have been consistently strong with cash items in excess of current liabilities. Dividends have been paid each year since incorporation in 1929. Stock has held in 36-48 range since 1951. An upside penetration would indicate a substan- tial advance . . . – . …..-, – — – –' .'- …..–. . -.-. —– – -..; – WAYNE KNITTING MILLS sells at 22 and yields-a-l1ttleover 9 on the 1.60 regular dividend plus the 401 extra paid in 1953. The company is one of the leading manufacturers of better quality full-fashioned hosiery for women. There is 454,000 of debt and 359,996 shares of common. Earnings have been steady since 1946 and have ranged between a high of 4.88 and 1953 earnings of 3.97. Earnings for the first six months of 1954 were 1.34 compared with 1.59 in 1953. Despite capital expenditures of 2,150,000 in the four years through 1953, working capital has increased. Cash items at the end of 1953 were almost double total current liabilities. The stock sold at 70 in 1946. Since 1947, it has held in a narrow trading area between 25 3/4 high and 16 1/2 low. An upside penetration would indicate substantially higher levels. – – —- EDMUND W. TABELL WALSTON & CO . — – – – — –.;-,-.-………;…..;..;- – – …… -.. —–,- ,', —-

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Tabell’s Market Letter – August 27, 1954

Tabell’s Market Letter – August 27, 1954

Tabell's Market Letter - August 27, 1954
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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 ISw.twld) , OFFICES COAST TO COAST CONNECTHi BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER Jcugust 27, 1954 For the first time since the advance started in September,1953, the market, as measured by the averages, has become stalled in a wide trading area and has been unable to decisively penetrate the previous highs of al- most a month ago. Early Aug.High Mid-hug.Low Recant High 8/26/54 Low Dow-Jones Industrials 351.50 Dow-Jones Rails 121.16 33g.70 11595 352.27 121.51 341.10 115.26 A decisive penetration of either side of this traBing area will most likely furnish clues to the trend of the general market pattern over the next few l11onths., However, regar;(lless ofwhether.1;he final resul t-'-t.s- a fu;G.- ther advance or a corrective decline, the price movement will be extremely selective. i.s I have noted many times before, individJal issue's ha1(e ex- tremely diverse patterns that bear no relationship to a general market pat- tern. It is easy to envision Stock A selling 20 above present price,and Stock B selling 20 below present levels three months from now regardless of whether the industrial average is at 370 or 325. In recent weeks, the character of the market has changed. The blue chip leaders of the eleven-month advance have been resting and the advance has been carried forward by stocks of slightly lower quality. In many cases this has been because issues of this type have been undervalued as compared to the better quality investment equities. The market has not yet broadened out to the point where the out and out speculative stocks 'have advanced re- gardless of quality . ..n upside penetration of the recent trading area would imply that the trading public is again entering the market in a large way and the advance has further to go under the leadership of the more specu- lative groups. Il downside penetration of the recent trading area would simply mean that the market is undergoing a technical correction of the almost 100-point advance since September,1953. I doubt if it would be of any great lasting significance. While many issues appear high enough, only a few have built up more thanminoI' potential. di-s.t.ributio.lalpa tteL'u-s.. ,..How.ev.er.,,,, there-is -, enough of a potential top to indicate a possible decline to, roughly, the 325-315 area. Such a decline would, in my opinion, present an excellent buying opportunity. If the decline occurs and the market reaches 325-315, the subse- quent market pattern could take one of two courses. The first possibility would be action similar to that of the period between February 1946 and August 1946. It will be remembered that the mar- ket reached 207 in February and reacted to 183. This was followed by a new high of 213 in J,ugust, but the advance was extremely speculative in nature and was led by low quality issues while the leaders were under distribution. This resulted in the September, 1946 break to 160. If such action occurred in the present market, it would eventually mean a more severe decline at a later date. More constructive action would be the possible pattern outlined in my recent article,Stock Market at Mid-Year–Coming Pause That Refrshes. The concluding paragraphs said – In conclusion, I do not believe that the mar- ket is vulnerable to a sharp decline despite the rapid advance we have wit- nessed over the past nine months. I do believe, however, that some pause or consolidation is needed and that the straight line advance in the averages will be replaced by a wide trading area in which individual issues will show extreme -selectiv.ity. I would expect -that for .the next-6 -to 18 months the Dow-Jones industrial average will hold in an area bounded roughly by 350 and 300. During this period, many issues could continue their advance while others consolidate and form re-accumulation areas. This in no way changes my thoughts that the market is in a long-term advancing phase.From a technical approach, there seems little likelihood of a major decline in stock prices in 1954. For the long-term investor, I advise retention of ccrrmon stock equities that will ultimately benefit from the continued long- term growth of the country. ThiS, as always, will require careful selection not only as to quality but as to price level. After the consolidating pe- ried has been completed, I expect a renewal of the advance with an ultimate objective, in about 1960,of 450 to 500 under normal market conditions and 600 or higher in a period of speculative excess. EDMUND 111. TABELL if., .. mmO'dndum IS not to be conued , In offer or soliCItat,on of oHers to buy or ell … ny securitIes From lime lJ…QN &&op.y iarlner,jnl',ol m … y 'Ive an ,nlue,t ,n ..orne or lilt 01 b,'led upon ,nformdt,on beloeyed reliable tbhet securitIes mentioned here,n not neceuaroly complete, IS llle toreqo,nq m … ttr'41 has b!en prepMed nol qUl'anlced as accurate or l,n1ll, and, 's by net us /II a malle' 0 tn o,ml .on on y ,\ ,ntended to iO'etlo\e ,ndepl'ndent ,nou,v

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