Viewing Year: 1955

Tabell’s Market Letter – January 07, 1955

Tabell’s Market Letter – January 07, 1955

Tabell's Market Letter - January 07, 1955 page 1
Tabell's Market Letter - January 07, 1955 page 2
View Text Version (OCR)

r; 'fl-r; Walston &- Co. ,;l MEMBERS NEW YORK STOCI( EXCHANGE AND OlHER LEAOING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO Swd,ld I OFFICES COAST TO COAST COlNECHC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER January 7, 1955 With the rise in margin requirements as a reason – or rather, as an excuse – the stock market sUffered its first decline of consequence in over fifteen months. A market that has advanced 60 pOints in two months without any correction and over 155 points in fifteen months with only one minor decline is obviously in need of shakeout somewhere along the line. William Bloeth of the New York World-Telegram & Sun put it rather neatly when he said Any time the market puts on a sensational advance, which is about the description for the last year-plus, a lot of neophytes get the idea that they have the magic touch and nothing can go wrong. The market functions best when approached with a reasonable amount of caution and a full realization that it has never been a one-way street and no New Era is on the horizon to change the established pattern. The correction would have occurred sooner or later whether the Federal . Reserve Board had raised margin requirements or not. The mild action of the F.R.B. is more in the nature of a warning against future overspeculation rather than a thought that overspeculation has already occurred. To compare the present market with 1929 is rediculous. The difference is as great as the difference between black and white. Just as one instance, loans on securities were five times great.er in 1929 than they are today. There is no need for a Senate study of why the market has advanced over the past fifteen months. The answer is obvious. In 1953, stocks were grossly undervalued in terms of historic price to earnings ratios and stock to bond yields. The advance since that time has simply brought prices more in line with actualities, but has not resulted in general overspeculation. Many issues appear high enough but many others appear undervalued. Until such a time when public speculation results in general overvaluation of all types of securities regardless of quality, I do not feel the market is vulnerable to more than technical corrections. This week's decline from Monday's all-time high of 409.21 in the Dow-Jones industrials to Thursday's low of 387.09, is a 5.8 correction. This is the tenth correction of more than 5 that has occurred since the start of the bull market in 1949. So far it isthe third smallest decline of the five-year period. The greatest decline was 15 in the 1950 Korean invasion market and the smallest was 5.4 last August. If the present decline is to be simply a correction of the overrapid 60-point advance of the last two months, it should not carry much further. A minimum one-third correction was about 390 and a minimum two-thirds correction would mean about 370. This fits in with support areas. There is strong support in the 395-385 area and again at 375. From my technical work, a below 375 is extremely unlikely at this stage of the pattern. Practically no individual issue has formed a distributional top that would indicate a decline of great magnitude. To form a vulnerable pattern considerably more time would be needed. It is possible that the present decline is a preliminary warning of the formation of a distributional top just as the February 1946 decline was a warning that a possible top was forming then. But just like 1946, the present decline must be followed by a rally to possibly new high territory in the averages with definite signs of weakening internal action. No signs of such deterioration has as yet occurred and, until it does, I do not believe the market is vulner- able to more than the overdue technical correction that is not taking place. It is my opinion that the market is now in a buying range as far as a great many individual securities are concerned. In recent letters, I have discussed all the securities I have recommended during the past two years. I have recommended the sale of some because they appear high enough or have not lived up to their projected technical performance. -2- This still leaves a large number that still indicate higher levels. The nIneteen stocks I am listing below represent, in my opinion, above average chances for price appreciation over the intermediate term. They are of varying investment quality, but all have attractive patterns. Three issues – CUTLER HJ\MMER, the leading producer of electrical control devices and manufacturer of industrial electronic equipment, MISSION COR, an oil holding company and MONTANA, DJ..KOTJ.. UTILITIES a growth utility company with an important oil background are new additions to the list and will be reviewed in more detail in future letters. It will be noted that a large percentage of the issues are oils or related to oils. This is because I believe the oil group has perhaps the most favorable intermediate term pattern of any of the major groups. PRICE American Fotash 68 .L'.tlantic Refining Black & Decker Blaw Knox 37 2496 Cities Service 120 Cutler Hammer Dresser Industries 5378 Eagle Picher 27 Hewitt Robins Joy Mfg. 3443 Lion Oil 47 Mission Corp. Montana-Dakota -Utilities 3268 Ohio Oil Pan '.merican World Air. Simmons Co. 614780 Sylvania Electric 44 United Shoe Machinery Yale & Towne 50 53 YIELD 3.0 5.4 4.0 44..25 5.2 5.3 65..05 45..37 Stock 344…945 6.2 4.5 5.0 3.8 WALITY Growth Medium Medium Medium Medium Medium Medium Medium Medium Menium Growth Medium Speculative Medium Speculative Medium Medium Medium Medium EDMUND VI. TABELL VlALSTON & CO.

Download PDF

Tabell’s Market Letter – January 14, 1955

Tabell’s Market Letter – January 14, 1955

Tabell's Market Letter - January 14, 1955 page 1
Tabell's Market Letter - January 14, 1955 page 2
Tabell's Market Letter - January 14, 1955 page 3
View Text Version (OCR)

-r Walston &- Co. MEMBERS NEW YORK STOCI( EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Swmld) OFfiCES COAST TO COAST CONNECTED BV DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER January 14, 1955 The market, as measured by the averages, held in a relatively narrow trading area during the past week. Probably the high of 412.47 on the Dow- Jones industrials reached on January 3rd and the low of 387.09 reached on January 6th will be the outer limits of a trading area for quite some time. In fact, over a longer period of time, I would not be surprised if the mar- ket held within an area bounded by, roughly, 425'high and 375 low for the next six months or longer. This would probably be the most constructive technical action that could occur. During such a period, of course, in- issues could pursue their own course. ' uew people realize how diverse the action of the market has been over recent years. Regardless of the fact that the Dow-Jones average has advanced for over five years with just a few minor interrupt'ions, the action of various types of securities has been quite different. Many hold- ers show losses on individual securities the fact that the general market has been in a broad advance Since 1949. hS always, it has been dan- gerous to buy the wrong securities at the wrong time. In the main, it has definitely paid to own quality issues over recent years. The following compilation may be of interest. It presupposes an investment of 100,000 in four different groups of stocks at the 1946 highs. The first group is composed of twenty growth issues and presupposes an investment of 5000 each in such growth companies as Dow Chemical, Corning Glass,I.B.M., etc. The second group is composed of twenty stocks of investment quality. It was selected from the twenty favored issues of 130 Common Trust Funds of leading trust companies. It includes such issues as General Motors, Standard of New Jersey, General Electric, National Dairy, Sears Roebuck, etc. The third group consists of good quality dividend-paying issues a bit below the investment quality of the second group. It consists of issues like Allied Stores, Allis Chalmers, Babcock & Wilcox, National Gypsum, Sylvania, etc. The fourth group consists of lower-priced, more speculative issues. It comprises the twenty most actively traded issues in 1953 sell- ing at around 20 or lower. It includes the issues in which the general public usually trades. It consists of issues like Armour, Avco, national Telephone, New York Central, Pennsylvania, Pepsi-Cola, etc. Here is how a purchase of 100,000 at the 1946 highs of each of ese groups would have worked out until Decembe-r 31st, 1954 ' 1946 High 12/31/54 Growth Issues Investment Issues Medium-Grade Issues Low-Priced Issues 100,000. 100,000. 100,000. 100,000.. '313,860. 222,625. 136;'512. 76,245. In other words, the purchaser of low-priced, speculative' stocks at the 1946 highs still has a loss eight years later. There is a reason for this as shown by the earnings behind each of these groups. 1954 earnings are estimated 194-6 1954 Growth Issues Investment Issues Medium-Grade Issues Low-Priced Issues 5,998. 6,482. 7,724. 5,530. 14,285 plus 239 -16,079 plus 251 12,486 plus 163 4,570 minus 18 Just as there is a reason in the earnings picture, there is also a reason for the diverse action in the dividend pattern. Here are the divi- dends paid in 1946 and 1954 3 Growth Issues Investment Issues Medium-Grade Issues Low-Priced Issues 1946 2,503. 3,520. 3,080. 1,543. -. -195-4 7,827. plus 313 8,826. plus 251 6,411. plus 208 2,243. plus 145 -2- 2 It is interesting to note 1/2 at the time of purchase, that the Growth Issues were but are now yielding almost 8yiebldaisnegd only on the original purchase price. Of course, to the purchaser today, the yield is only 2.4. That is the outstanding characteristic of growth issues. Yields are low at purchase, but the growth 'in earnings and dividends eventually result in a larger return than on defensive and cyclical issues. Of course, the rise of the last fifteen months has resulted in yields and price-to-earnings ratios that are comparable to those reached at the top -of 1946. The tables below illustrate the approximate /E ratios and yields that prevailed at 1946 top, the 1949 low and at the end of 1954. YIELD. 194b 1949 1954 PLE RA.TIO 194b 1949 1954 Growth Issues Investment Issues Medium-Grade Issues Low-Priced Issues 2.5 4.5 2.4 33..15 97..03 43..97 1.5 4.2 29 16.5 10.2 21.8 15.4 7.1 13.7 12.9 18.0 5.3 10.9 9.4 15.5 On the basis of the above figures, the growth issues are selling higher than the 1946 ratios and the investment group are approaching the ratios reached at the 1946 high. Of course, increase'in earnings and dividends would change this picture, but any sharp price increase in these two groups would be unjustified under present earnings and dividends. These two groups appear to have corrected the undervaluation that has existed for over eight years. The medium-grade group still appears to offer the best profit opportunities with the least downside risk, particularly in issues that appear to be graduating from medium-grade to highergrade. I have recommended issues of this type such as American otash, Babcock & Wilcox, Penn-Dixie Cement, Western Union, etc. J,lso ,-I still like Dresser Industries, Joy Manufacturing, Black & Dec,ker, etc. – The low-priced stocks still offer opportunities for price appreciation, but here the risk is much greater as witness the fact that buyers of some of these issues at the top eight years ago are still under water. The above is based on fundamentals. From a technical viewpoint, a great many issues have reached their upside objectives, but have as yet formed no vulnerable tops. A large number of issues still indicate higher levels. It is possible that the recent decline is the start of a distributional top pattern, but if this is so, considerable time will be needed to complete the pattern and, as in 1946, there should be plenty of signs of deteriorating patterns. These signs are not yet evident. EDMUND W. TABELL WAlSTON & CO. P.S. If you desire the names of the individual issues mentioned above, I will be very glad to furnish them to you. EWT 4-groups LM .,.. … Following ;re the stpcks used in the (!or.lpllatlon of Q;l'OUPS as outliu,ed market letter of ,iamlal',f 14,1955 20 Aluminium, Ltd. Allleriada . Ca!'l'l.er Corning Glass Dm1 Cherl'lica 1 DuPont El Paso Natl.Gas Goodrich Inter.13us.M \inn . HoneYNell lttnn .Minlog I'jonsanto NOaltenl.sonCaol rLneiandg Pfizer Radio COlt') Hohrn & Haas Scott Papel' Shell Oil 1)1,ion Carbide 20 Al\1er1.can Can AllIer .Cyanamid DuPont Oenenra1 Electr!.e General Foods Genera I f!OtOI'S Gulf Oil Johns r'llI'1ville Kennecoi;'i Natlonal Dairy Penney, J.O. Phillips Pete Sears Roebuci4 Socony Vacuunl Stand.Oil Stand.On Stand.Oll ooorff Calif. Ind. N.J. t'exas Union Caro!.de \'lestinghouse Elec. 20 Allied Stol'es Allis Chalmers Babcoc!c & i'filcox Blew-Knox BucYiMlS Erie Burroughs Chain Belt Clev .Elee .n.l. Crane Distillers C,Oll'P. S JEolyliott Lowenstein Nead National Gypeum NY Ail' Bra!ce Penn-Di1,ie Cement Rheem iljg. Sylvan1.a Elec. Yale 8; To.me fi.rner .Air11nes Aveo BaU.a 01'110 Canada Drir Colum1bia Gas Emerson Radio Gimbel ILnoet1; , 8 & Tel Nack N.'1..Centll'al Pan ArnericaI'l Penn.n.R. Pep;IJ.-Cola Raytheon Rexall Drug Servel Spiegel Studebal-cel'-Pacard I .4'

Download PDF

Tabell’s Market Letter – January 21, 1955

Tabell’s Market Letter – January 21, 1955

Tabell's Market Letter - January 21, 1955 page 1
Tabell's Market Letter - January 21, 1955 page 2
View Text Version (OCR)

f .. / Walston &- Co. MEMBERS NEW YORK STOCK EXCHAP\lGE AND OTHER LEAOING STOCI( NO COMMODITY eXCHANGES NEW YORK PHILADELPHIA LOS ANGElES SAN FRANCISCO LUGANO ISw,,,,,',,d) OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER January 21, 1955 It is quite evident that the character of the market has changed. The straight-line advance that started early in November has apparently ended and is being replaced by a broad trading area. The outer limits of this contemplated trading shelf are not yet clear. The technical pattern that has formed over the past several weeks is not yet complete and must be watched closely. It is possible that a vulnerable pattern could be formlng for the first time since mid-1953. The formation in the industrial average and in some individual stocks has the appearance of what technicians call a head and shoulders top. This possible top has been formed by the mid-December high of approximately 400, the early January high of 412 and the recent ral,ly top of 402. The lower part of the pattern is the 385-387 area which has been the low on the last two market declines. A decisive downside penetration of this support zone would indicate a further decline to the 375-360 area. On the favorable Side, my intermediate term technical indicator registered a buy signal on Tuesday. If the upside momentum continues and the industrials push above the 402-403 level, the potentially bearish pattern would be destroyed. Therefore, it would appear that 403 and 385 are the important points to watch. Friday's close was 395.86. The above analysis applies, of course, to the'nearer term action of the market. The longer term trend of the market is still upward, but a resting period may be in order. Selected stocks should be bought regardless of the shorter term swings in the averages. There are many issues that indicate higher levels over the longer term. One such issue is reviewed below MONTANA-DAKOTA UTILITIES CO. Statistics The common stock of this com- Current Market Current Dividend Current Yield 26 1.00 3.8 pany, in my opinlon,is amost interesting growth situation based not only on the potential population increase in the territory Long Term Debt Preferred Stock Common (Shares) .40,170,328 9,941,500 1,758,644 served, but also on the company's control of substantial acreage in the Williston Basin. A good portion of this acreage is under Net Per Share,1954 1.56 – E Net Per Share,1953 95 Operating Revenue,1954 – 22 million -E Operating Revenue,1953 – 19.48 million operating agreement with Shell Oil. If sizeable oil production is developed in the future, it is probable that this portion of the company will be spun off to Market Range, 1952-1955 28 7/8 – 17 1/2 stockholders as a separate company. E – Estimated As a utility company in a growth territory, the stock should be worth its present price in the not too distant future without giving any value to its oil acreage. Montana-Dakota Utilities supplies gas and electricity to communi- ties and municipalities in Montana, North and South Dakota and vlyoming. A total population of only 375,000 is served, but the growth potential is sizeable. The area served is experiencing substantial population growth and accelerated commercial and industrial development because of the rapidly expanding oil exploration and production activities in the Willis- ton Basin. The company's electric and gas utility services extend over this entire area. The reflection of this growth potential was shown by a 12.3 increase in operating revenues in the first eleven months of 1954. Earnings for 1954 are estimated at 1.56 a share. The dividend rate was recently increased to 25 quarterly. Th,1 m ., m,mor.ndum nol to be h…. ,n ,nl,rut ,0'1 10' (onllfl,r,d or .11 of ., … oft.r or lolocit,tiOf'! of oHI to bur o. II ttl, I4Icu,lfl m,fltlon,d h.ln The 10'looi9 .n, l.cud' h', iu b. From ,n p time lr,d tobolltimUeI W,lIton , Co, I' mett., 0 or ,In., p,rtn,r 00'11, It UPOI'l ,lIlo.ml',on b.h,.,d li,bl, but l'Iof KIIMril, compl.,., 'I not qu.,.ntd ., KCW. or titl.I, .tld '1 tlet Itlletlded to 'ore,loie Itldepetldetl' 'quory -2- It is four years since the discovery of oil in the Williston Basin and it appears that actvities have settled down to careful exploration and development largely by the major oil companies. The feverish leasing activities throughout the Williston Basin have largely given way to a careful study of the area, and unlikely leases are being dropped. MontanaDakota Utilities controls, by leases or operating agreements, approximately 263,000 acres in the Williston Basin. Of this total, approximately 90,000 acres are on the Cedar Creek Anticline in Montana which has assumed a position of ever increasing importance. It now includes nine areas productive of oil. Four of these areas are on lands which Montana-Dakota is located. In addition, the company has 110,000 acres in the Bowdoin Field, Montana. Other holdings are 5,500 acres near Williston, North Dakota and 3,000 acres in Mercer County, North Dakota, and approximately 8,000 acres in Harding County, South Dakota. Only the Cedar Creek Anticline is of immediate interest although the other holdings mayor may not have a future potential. To get complete picture of the importance of the Cedar Creek Anticline, Dakota Uti I li suggest you ties issued onreaJdanauarreyp7o,rt to the 1955 by stockholders of MontanaR. M. Heskett, Chairman of the Board. This report is a very complete tabulation, with maps, showing the number of wells which have been drilled on the Cedar Creek Anticline in the area where Montana-Dakota lands are located. Italso includes in detail the various working agreements with Shell Oil. A further indication that the Cedar Creek Anticline is due for acceleration during the coming year is the fact that Shell Oil Company has recently completed and placed in operation, a 12-inch crude oil pipeline from near Glendine, on the Northern Pacific Railway, passing through the various fields. It is rumored this may eventually be tied into a pipeline extending southward into vlyoming, thus giving this portion of the basin an outlet for its crude oil. Of fur- ther interest is the fact that Shell Oil has moved some of its own drilling crews and drilling equipment into the area, including some of the most modern drilling equipment that the industry has been able to develop. The stock has built up an extremely favorable long term pattern. It has held in a broad trading range between 28 and 18 since mid-1951. An upside penetration of this area to reach 29 would indicate the probability of 45 followed by an eventual 60-65. This is, of course, a longer term projection. As a utility issue in a growth territory, the stock most likely has a value of approximately 18 to 19. Thus it appears that the stock has an upside appreciation potential of 150 as against a temporary downside risk in a very bad market of 26. Purchase is advised. EDMUND vi. TABELL WALSTON & CO.

Download PDF

Tabell’s Market Letter – January 28, 1955

Tabell’s Market Letter – January 28, 1955

Tabell's Market Letter - January 28, 1955 page 1
Tabell's Market Letter - January 28, 1955 page 2
View Text Version (OCR)

— I Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,Idl OFFICES COAST TO COAST CONNECTEt BY DIRECT PRIVATE WIRE SYStEM TABELL'S MARKET LETTER January 28, 1955 The Dow-Jones industrial average advanced to an intra-day high of 406.98 during the week. The ability to push above to 402-403 supply level was constructive, inasmuch as it destroyed the potentially bearish head and shoulders top pattern that appeared to be forming. This does not mean, of course, that all danger of a corrective reaction has been removed, but the immediate potential danger seems to be lessened. The general market appears to be resuming the pattern I originally believed probable – namely a broad trading range. It is possible that the range for January (412.47 high – 385.65 low) may hold for quite some time. In fact, it is my opinion 10 on both sides average may of-4DD for–the hold wi th -bil.'lance' ionf an area bounded by, roughly, Th'is-wouldcbeconstruct- ive development for the longer term and would allow individual issues to seek their own respective levels. This does not mean that a stationary investment policy is in order for the balance of 1955. Quite the contrary. The selective action of the past five years gives every indication of continuing. There are many issues that appear amply valued at present price levels on the baSis of present earnings and dividends. There are also many other issues that in my opinion have not fully discounted the favorable potentials. The steel group has been the most popular group during the past week with U.S. Steel opening over five points higher on Wednesday after the announcement of a two-for-one split and a dividend increase to 4 annually. The steel group was strongly recommended for purchase in my letter of April 23,1954,at price levels considerably lower than those now prevailing; for Bethlehem Steel at 62 1/4,high 120; Republic Steel at 51 7/8, U.S. Steel at 45 CiO 1/4. In April you could have bought U.S. Steel at a yield of 6t on the then 3 dividend and at about 6.2 times the earnings of the twelve-month's ended March 31,1954. At the week's high of 80 1/2, the yield was 5 on the increased dividend, and selling at 12 times earnings on the 1954 results and ten times the estimated 7.50 to 8.00 earnings for 1955. It would 'of tnespllt' now but' Of and'the expected dividend increase now in effect, U.S.Steel has only a moderate chance for further capital appreciation over the next few months. It would appear more likely that a lengthy consolidating period may occur. This is also true of technical patterns of U.S.Steel and other steels. They are at or very near upside objectives. The oils as a group or the issues below appear to offer better capital appreciation prospects because, from a technical Viewpoint, they are still some distance away from upside objectives and, from a fundamental point of view, potential good news is still in the offing. WESTERN UNION (82) has undergone a tremendous transition in recent years. A vast research program has unearthed new techniques in the trans- mittal of written messages and the company, because of these new develop- ments, now appears to be an expanding growth situation rather than the stagnant, backward company of 1932 to 1945. The stock has a book value of 140 and has spent almost 100 a share since 1945 in mechanization and im- provement of plant and eqUipment. Earnings for 1954 should total at least 7.50 and if the present rate continues,lO or 11 earnings are possible for 1955. In that event, it appears likely that 3 dividend would be in- creased. There is a possibility of some debt refunding at a lower rate and the stock could be a possible split candidate at some future date. The stocK nas advanced quite'sharply from my original recommendation,but the technical pattern still indicates higher levels. DRESSER INDUSTRIES (40) is also a very interesting growth issue ser- ving the expanding oil and gas industries. 1954 earnings were 5.53 and the 2 annual dividend is amply covered and could be increased. The con- templated merger with Lane Viells,a growing West Coast concerr,jis construct- ive and it is possible that additional mergers could occur. The technical pattern suggests an eventual 60-70 for the stock. JOY MFG.(43) appears to be entering a new cycle of growth.Earnings for the fiscal year ended Sept. 30th were 4.08 and 1. 02 was' shown for first quarter of the new year.These earnings should be a floor. Higher sales and profits are expected in 1955.Dividends 2.50 in 1954.Technical pattern is strong and the stock is now in the 45-40 support and buying level. Price Present -2- ,S T 0 C K Recom. Frice Yield Advice Continental Motors 10 13 ,6.1 Hold for 18. , Corn Products 70-75 88 4.4 Hold for 115. Cornell Dubilier 21-22 35 5.4 Hold for 41. Dow Chemical 38-40 48 2.6 Hold for growth.Buy 45-40. Dresser Ind. 33 39 5.1 Buy for 60-70. Eagle Picher 22- 32 4.8 Hold for 40, then 60. Fansteel 2224 27 3.7 Buy for 49. Flintkote 27-30 43 5.8 Hold for 50, then 70. Garrett Corp. 30 41 3.9 Hold for 50-55. General Mills 69 69 3.6 Buy for 90-105. Great North.Rwy. 30 38 3.3 Hold for 47. Greer Hydraulics 12 18 2.2 Hold for breakout 16-19 area. Hall Printing 16-17 20 7.0 Hold for income. Hercules Motors 16- 19 4.2 Speculative buy. Hershey Chocolate 42 4.8 Buy for patrent holding. Hewitt Robins 25-30 35 5.7 Hold for 50-60. Hooker Elec.Chem. 26 31 2.5 Hold for 40. Idaho Power 45 55 4.1 Hold for 68.Buy at 50. Industrial Rayon 45 53 5.6 Hold for 58-63. Inter. Tel & Tel 18 25 4.0 Hold for 31. Jaeger Machine 27 28 7.0 Buy for 34, then 42. Joy Mfg. 47 45 5.6 Buy for 75-rOO. Lees (Jas.T.) 25 30 6.6 Hold for 35-37. Lehman Corp. 40 47 2.1 Hold for growth. Lion Oil 35' 47 4.1 Hold for growth. Lowenstein 14-15 25 4.4 Hold for 30. Merck & Co. 20 23 3.4 Buy for 34. MiRMion Corp. 38 38 Buy for 57-62. M-K-T, pfd. 55 85 7.0 Hold for 90-100. Monsanto Chern. 93 105 2.4 Hold for 125-140. Montana-Dakota Util.26 30 3.3 Buy for 45-60. Montgomery Ward 60-65 82 5.8 Hold for 90-100. Mullins Mfg. 23 24 6.2 Buy for 34-38. N.Y. Air Brake 24 6.2 Hold for 29-34. N. Y. Central 20-21 34 2.9 Hold for 4L47. Northetn F'acific 59 69 4.9 Buy for 95-105. Otis Elevator 39 63 4.8 Hold for long term 80-90. Pan-hmer.Rir. 11-13 18 4.4 Buy for 21-23, then 30-35. Paramount 23 39 5.1 Hold for 41-48. Parke-Davis 32-35 36 3.9 Buy for slow 50-52. Fenick & Ford 46' 52 4.8 Hold for 63-72. Pennsylvania Salt Ffizer & Co. 28-32 48 39 3.9 3.5 Buy Hold f or for 5595-6-650. . Pullman Corp. 51 70 5.7 Hold for 85. Raybestos-Man. 42 48 6.3 Buy for long term 80-90. Raytheon 10-12 20 Hold for long term 30-35. Robertshaw-Fulton 21 31 4.8 Hold for 40-45. St.Joseph Lead 40 46 4.4 Hold for 51-56. Shamrock Oil 17-18 42 5.6 Hold for 44-50. Simmons Co. 36 44 5.7 Hold for long term 70-80. Sinclair Oil 46 52 5.0 Buy for 68-70. Sylvania Elec. 35 44 4.5 Hold for long term 75-80. Tungsol Elec. 28 27 4.7 Buy for 39. UUUUnnnniiiiootteenndd COFMai lrrebur.ii&dt e Mfg. 64419357–5500 85522137 4345….2880 BHHHuoooylllddd fofffooor rrr lo2lloon9nng. ggtettreemrrmm77g05r. o-w80th. . United Shoe Mach. Vanadium Corp. WVvVliieascrskrtteoiennrrgnFCCJeh..oeturmrtoopi.lcS.aul p.'I Wvvlleeesssttteeerrrnnn MUFnaaircoynilfa Yale &Towne ni cd !1 'I 'I 5109-20 65-u7 5512508055—'262805 45 33749984 8557319298 57 3245….1715 5334-….1824 3.5 BHHHuoooylllddd fofffooor rrr lo41lon40ng0-g4. t8et.remrm8458. -52. HHHHHooooolllllddddd fffffooooorrrrr 4lliUnoo2cnn8-ogg4.m6tt.eee.rrmm . 70-75. – Hold for long term 80-90. ChiTc.hGe r.iWsseusets (3el8tJm,Cinhaitce.dR.aIr.e(92J, Colum(2b6ia),BGaesll (1&7H),oDweeclcla (8(13)5JC,Daelnifv.ePracRkio. G(2ra7n)d, e l12),DeVilbisS (23),Fruehauf (38),Gray Mfg.(15),Gulf Mobile (38),Interchemical 39),Johns Man.(B5),Kennecott (108),Masonite (29),Minn.Er.& Lt.(24 Montana Pro i jS3te8e)1 QweQs Ill.Gl'qI .(s7;); , (108),J.FPls\,M3dUj,lSs td.,ack.\28j, EDIvMUUSNTDONW. T&ACBOEL. L Radio (4(72)0,R. epublic

Download PDF

Tabell’s Market Letter – February 04, 1955

Tabell’s Market Letter – February 04, 1955

Tabell's Market Letter - February 04, 1955 page 1
Tabell's Market Letter - February 04, 1955 page 2
View Text Version (OCR)

Walston &- Co. NEW YORK NEW YORK STOCK EXCHANGE ANO OTHER LEADING STOCK AND COMMODITY EXCHANGES PHilADElPHIA lOS ANGELES SAN FRANCISCO LUGANO ISwwldl OFFICES COAST TO CQASr COlNECTE'c;. BY DIRECT PRIVATE WIRE SYSTEM TAB ELL'S MARKET LEnER February 4, 1955 The Dow-Jones industrials failed in their first attempt to penetrate the January high and break out on the upside of the 412.47 – 385.65 area in which the average has held since the first of the year. Tuesday's high was 411.63. The rails also failed to better the January high and still remain in the month-old trading shelf bounded by 147.73 high and 137.00 low. Based on the action of individual issues,it would appear that the odds favor an ultimate upside breakout of the trading ranges in both averages. Looking at the market from the longer term point of view of intrin- sic values, it must be realized that a great many issues, at present price levels, are no longer on the bargain counter. For the past seven or eight years, stocks were grossly undervalued in terms of earnings and dividends. The rise of the past sixteen months has gone a way toward correcting this undervaluation. As measured by many better-grade stocks, the market is about normally valued at present prices, earnings, dividends and money rates. Any sharp price rise from these levels without a comparable rise in earnings and dividends would result in ultimate overvaluation. That is why a resting period at this stage would be a favorable development. Of course,all stocks have not discounted the favorable potentials and there are a great many issues that appear attractively pricedat present levels.This letter has attempted to draw some of these issues to your atten- tion.This has resulted in a recommended list that is reviewed periodically. As this letter is read by individuals with varying investment or speculative objectives, the investment quality of the list also varies con- siderably. The main reascnfor my recommendations has been long capital appreciation with a few issues mentioned for their generous yield and fair appreciation prospects. Each individual must decide whether each issue meets his indiVidual investment or speculative requirements. I have decided that the list is too lengthy and have eliminated twenty-seven issues. These are listed at the end of the letter. The reasons for the elimination are varied,but mainly because the issues eliminated have about reached their upside objectives on my technical work,or else have failed to perform as creditably as expected. Most of the issues eliminated show a profit. A rough approximation shows 390 points profits as against 15 pOints loss. The issues eliminated can be replaced by issues marked buy in the list below Price Fresent ST 0 CK Rec.om. Price Yield J.,dvice Abbott lab. Alleghany Corp. Allegheny Ludlum Allied Stores Allis Chalmers f.merican Chain Amer.Encaustic Amer. Potash & C Amer.Radiator ,mer. Tel & Tel f.SSOC .Dry Goods Balt.& Ohio Black &, Decker Blaw-Knox Bucyrus Erie Burroughs Celanese Celotex . Certain-teed Chain Belt Chic.& East.Ill. , Cities Ser. w.i. City Pruducts Colgate-Palm. Columbia Broad. Combustion Eng. Cutler Hammer Consol.Nat.Gas 40-45 33/4 3333-30 30-33 '7 40 14-16 150 26 23-25 39 22-23 15-17 31-37 20 1530-35 18 38 37 60 30-33 11-5 57 25-27 485 43 55 77 38 12 72 24 175 28 3 57 28 38 25 24 29 26 48 24 51 36 60 88 61 62 – I, 4.1 4.6 5.4 5.2 6.5 5.8 2.8 5.3 5.1 5.7 2.6 34.35 5.3 4.0 2.1 5.2 4.8 5.2 4.2 39 6.9 4.2 2. 6.2 4.8 4.4 Buy for slow 60-70. Hold for then 17-1 Hold for 60-75. Hold for 72-77. Hold for 90. Hold for 35-34. Hold for 17-19. Hold for 100-120. Hold for 27, then 43. Hold for income and 200. Hold for Hold for Hold for 5250. Hold for 4550.BuF 26-25. Hold for 42-44. Hold for Hold for 31-34. Hold for 31, then 44. Hold for 29, then 41. Hold for 65, then 80. Hold for 32. Hold for 76. Buy for income. Hold for 75-100. Hold for long term growth. Hold for 83-87 Hold for long term over 1)( Hold for 40-45. -2- Thus, cash flow earnings (net plus amortization and depreciation) were about 8.05 per share as compared with reported earnings of 2.30. The comparable figures for the past five years are tabulated below Reported Net Earnings Cash Flow Earnings 1950 1951 1952 1953 1954 7.07 5.40 3.37 4.40 2.30 9.14 7.54 7.03 9.49 8.05 The ability to maintain cash flow earnings at such a high rate is newencouragiDg rat..f-., QLoperations in 1954 andthe heavy burden ofreloCclting anCistarting up Thus that the normal earnings of the company in the future will be considerably above both the reported net of 2.30 per share for 1954 and the reported net of 4.39 per share for the average of the past ten years. Starting in 1955, the improved efficiency of the new units and the . reduction of relocation and starting up expenses should, together with im- proved business conditions, result in much better earnings figures. VJhire the accelerated amortization will reach a peak in 1955 and hold down reported earnings for a few years longer, this will be largely offset by above average growth in stainless and other alloy and specialty steels. Stainless steel use in the past has doubled about every ten years since it was introduced in 1920. Military and atomic applications are increas- ing rapidfY. Use of stainless steel as an exterior building material, re- placing materials such as masonry, is growing as witness the three all-stainless steel skyscrapers in Pittsburgh. Future growth is also expected from wider usage by such industries as automotive,electrical equipment, aircraft, chemical and consumer durable goods. Allegheny's interest in new metals led it to form, jointly with National Lead, the Titanium IVletals Corporation of America which produces titanium metal sponge and ingots at Henderson, Nevada. Production is about lay, b\lt ;isgrowing .. ThiolL imp.o.rttqt (utUj'sL sour.c.e . of-revemie,-llut the compariy fs not looking to this aspect of its opera- tions for substantial earnings for some time to come. Allegheny Ludlum produces melted and rolled zirconium and also has done work on rare earth combinations with steel. The company also has a 35 interest in Continuous Metalcast, which owns rights to the Rossi continuous casting process. The stock should be of interest to the investor who is interested in long term growth. While it is selling at almost twenty times reported earnings for 1954, it is also selling at roughly only ten times average earnings for the past ten years and only five times cash flow earnings. It has paid 2.00 in dividends since 1943, plus occasional extras and stock dividends. It sold as high as 61 1/8 in 1946 and at 52 1/8 in 1951. It has sold higher present levels in five of the past ten years. It is one of the largest factors in the stainless steel industry and because of an aggressive research program, it has two processes, continuous cast- ing and hot extrusion, wh'.ch are still in the early stages of develop- ment, but could have important commercial possihilities. For the longer term, it has an interesting potential in titanium and rare metals. The technical pattern on thestock is quite constructive. The ability to move out of the long 26-39 trading area suggests an interme- diate term 75. Over the nearer te)'m, the pattern.is.also.constructive. The out of the trading area late last year to reach a high of 45 3/8 in December. It has been resting and consolidating since that time in the 39-45 range. Ability to reach 46-would indicate a near term 50-55. There is good downside support at 39-37. Therefore, it appears that the stock has an upside potential of thirty points or 70 over the foreseeable future as against a risk potential of eight pOints or 17. Purchase of this equity is advised for those interested in long term growth. EDMUND TABELL WALSTON & CO.

Download PDF

Tabell’s Market Letter – February 11, 1955

Tabell’s Market Letter – February 11, 1955

Tabell's Market Letter - February 11, 1955
View Text Version (OCR)

Walston E,- Co. 'EMBERS NEW VORK STOCK EXCHANGE ANO OTHER LEADING STOCK ANO CQMMQDtly eXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (S.,I,Id) OffiCES COAST TO COAST CONNECTEr. BY DIRECT PRIVATE WIRE SYSTEM MARKET LEnn February 11, 1955 The industrial average has now passed its January peak of 412.47 and has now reached new high territory at 416.55. The rails have failed so far to better the comparable high of 147.73, but are close to the the technical pattern suggests that they will confirm the break-through in the industrials shortly. h failure to do so would be disappointing. The upside objective on the industrials for the next phase of the advance ap- pears to be 425 and an upside breakout by the rails would indicate 152-155. If these objectives are reached, at least another consolidating period wleocutlidVity-wiolrldecro.n..t,'lhnsueh. as been true for the past five – y-e–a-r-s,-.e0xt-remes-e- -,- ALLEGHENY LUDLUM STEEL CORPORATION Statistics ALLEGHENY LUDLUM was reviewed in this letter about a year ago and Current Market 45 the common stock recommended for Current Dividend 2.00 purchase at the then current leve Current Yield 4.5 of 32. Since that time the stock has out on the upside of Notes Payable 29,556,000. the 26-39 area in which it had Preferred Stock (shs.) 81,346 – 1. held since mid-1952 and has reach Common Stock (shs.) 1,689,360 ed the highest 'price level since 1951 when it sold at 52 1/8. This Sales, 1954 170 million is despite the fact that earnings Sales, 1953 241 million for 1954 were sharply below 1953. The lower earnings of 1954 were Net Fer Share-1954 2.30 largely the result of reduced de- Net Per Share-1953 ,4.40 mand for speCialty steels in the first nine months of the year. Mkt.Range,195l-1955 52 1/8-25 1/8 Thelbulk of Allegheny's output is — – – in A Cumulative Convertible F'fd. less, silicon, alloy and tool (no par) redeemable at 102.50 through steels. Sales weakness in these Nov.l,1955 – higher-grade steels was due to- At 102 thru Nov.l less prior to Nov.l.19bl into 2.08 common shs. the defense stretch-out and reduced output of automobiles, appliances and farm equipment. Another major factor was the widespread move toward liquidation of invento- ries, both in the hands of ultimate users and in supply channels. Because of their high value per ton, alloy steels offer a ready target for pur- chasing agents anxious to slash their dollar values of inventories. However, just as alloy steel makers were hardest hit by inventory reduction in 1954, so their recovery is expected to be most dramatic in 1955. This is evidenced ty 1. the 01 gain in ea as compared rnings with 76in1 the fourth quarter of 1954 when Allegheny earned in the corresponding period a year earlier. E.J. Hanley, company presiaent, told the stockholders and directors on February 3rd that demand has improved for all products and particularly for flat, rolled steel where facilities are operating at near capacity levels. He stated that there is every indication that operations for 1955 will be substantially better than in 1954. Earnings have also been affected by heavy accelerated amortization- charges. The company spent roughly 96 million,since 1946 in plan-t ex- pansion and improvement. This is equal to nearly t60 per share of common stock and makes Allegheny Ludlum virtually a new and more efficient company. This has resulted in heavy charges for depreciation and amortization. Cer- tificates of necessity are held covering 55 million of new facilities of which about 65 may be amortized over five years. During 1954, deductions for accelerated amortization totaled 6,156,319. Had the company elected – to forego accelerated amortization and take normal depreciation on facili ties necessary to national defense, net earnings after related tax adjust- ments would have been increased by 1.19 per share of common stock. Total charges for accelerated amortization, normal depreciation, depletion and plant retirements during 1954 were 9.8 million or roughly 5.75 a share. , II

Download PDF

Tabell’s Market Letter – February 18, 1955

Tabell’s Market Letter – February 18, 1955

Tabell's Market Letter - February 18, 1955
View Text Version (OCR)

…. F – — – – – – Walston &- Co. t.4EMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCI( AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO IS.,',Id I OFFICES COA'iT TO COAST CO't..lNECTfC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER February 18, 1955 Individual issues showed most of the price movement during the past week. The rail average approached, but failed to penetrate, the January high of 147.73 and the industrials held below the previous week's high of 416.55. While continued selectivity is expected, I believe an upside penetration by the rails is a probability and such action would most likely carry the general market higher. The Dow-Jones 65-Stock Average, which is a combination of the industrial, rail and utility averages, has recently shown the most projections of the three averages. Its upside po- tential is 165 as compared with a present level of 152.41 . . ' ..As youknow,Lhavebee.n very – -for oil equities. -Their technical patterns are excellent and I believe se- lected oil stocks will witness a price advance similar to that experienced by the steel stocks over the past year. In fact, I recently suggested sWitch ing steels, recommended last hpril, into Oils. This suggestion still stands. Am0ng the Oils, I have mentioned in letters and wires Atlantic Refi- ning, Cities Service, Kern County Land, Lion Oil, Mission Corp., Shamrock Oil, Sinclair Oil, Union Oil, Warren Petroleum and also allied to oil situations such as Montana-Dakota Utilities and Northern Pacific. I still believe these and other selected oil equities are attractive. All of the issues mentioned above are American oil companies. It might be interesting to examine the Canadian oil picture from a technical Viewpoint. Of course, a very substantial part of the prospective future stake in Canadian oil growth is held by subsidiaries or affiliates of large American companies such as Amerada, Gulf, Texas, Tidewater,Standard Oil of Ohio, Continental, Phillips, Shell, Sun, Socony Vacuum, Union Oil, Delhi and Standard Oil of California. The largest single interest is Im- perial Oil, controlled by Standard of New Jersey. Imperial has almost half of the proven oil in Canada. Other large units are British American Oil (in which Gulf Oil is reputed to have a large stock interest) and McColl- Frontenac (controlled by Texas Co) . . ' Besides the.se..,larger .units,…there are Canadian independent oil and gas companies and various land and royalty companies. The situation of many of these companies is such that little short of a miracle will be needed to give the investor a profit because they lack all or most of the basic requirements for success. There are, however, maybe forty or fifty companies that have competent and reputable management, proven oil and/or gas reserves, cash, sound financial structure and promising land holdings. A package purchase of a number of these com- panies should work out very favorably over the longer term. I have selected two and nfocr addition to my IFIC PETROLEUMS, recommended LTD. list. They are CALGARY & EDMONTON CORP. The technical patterns of the Western Canadian oils are very interesting. In most cases, the highs were reached early in 1952 and the past three years have been spent in building up what appear to be re-accumulation patterns. In other words, the speculative short term purchasers of these equities at the boom prices of 1952 have gradually sold out of Canadian oils and they have been bought by those mainly interested in the long term potentialities of selected issues. Whether this gradual re-accumulation pattern is completed is not certain. A longer time period may be needed but the base patterns already formed are substantial. For- example, & Edmonton reached a high of 19t in early 1952. By mid- 1953, it declined to 8.'- Most of the been done in the 10-16 area. It is now selling at 16 1/4. Technically, an upside peqetration to 17 would indicate the longer term of the next few years. An equally interest- ing potenhll is present in the Facific Petroleum technical pattern. The stock reached a high of 15 in early 1952 and subsequently declined to 6t. Most of the past three years have been spent in the 7-13 area. The stock is now selling at 1,1 1/2. An upside penetration to 14 would indicate-19 followed by a long term 36. It must be stressed again that these indi- cations are for the longer term of the next several years. There is nothing in the immediate picture to justify these objectives. However . selected Canadian oils should be a part of the portfoliO of those interested in substantial long term capital appreciation. EDMUND W.TABELL WALSTON & CO. . ' / ,,-

Download PDF

Tabell’s Market Letter – February 25, 1955

Tabell’s Market Letter – February 25, 1955

Tabell's Market Letter - February 25, 1955
View Text Version (OCR)

Walston &- Co. MEt.48ERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMt.400ITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,t,ld) OFFICES COAST TO COAST COlNECTfC BY DIRECT PRIVATE WIRE SYSTEM TAB Ell'S MARKET lEnER February 25, 1955 The decline in the London stock market has caused consideraLle ner- vousness in our markets. The London market (as measured by the Financial Times index) has dropped from an early February high of 198 to 177 or 10. The London market started its rise in mid-1953 and has advanced from a low of 112 to 198. It is now back to about the October 1954 level. This would be equivalent of a drop to about 370 on the Dow-Jones industrial on a per- centage basis and a decline to about 365 on a time basis. However, the drop in the London market has been brought about by a situation that is more or less isolated as far as we are concerned. The England I s redIscount rate was raised from- 3 1/2t-0 7 4 1/2– – increase in the rediscount rate and the curb on time credits were enacted to cut down the pressure of home demand for consumer goods. This demand has brought about inflationary price increases that have caused exports to drop and imports to increase and thus disturb the balance of trade. No such situation exists here. An increase in our discount rate could be brought abuut by a desire to curb a runaway stock market on the upside. Unless the market advanced sharply, it would hardly seem necessary to raise our dis- count rate at this time. My intermediate term technical indicator signalled a sellon Thursday at 410. The last signal was a buy in January around 387. This present signal may not be too important as the pattern of the indicator makes it appear possible that another buy signal could be given at around present levels in about a week or so. There is support at 400-395 in the Dow-Jones industrials. It would appear that, after a possible mild decline or con- solidation, selected 'issues will continue their advance. – The DEPARTMENT STORE group was one of the leaders of the 1942-1946 upswing. Allied Stores, for example, rose from a 1943 low of 6 1/4 to a 1946 high of 63 3/8 or over 1000. Other reta.l store issues had similar price advances. Of course, there was a reason. Wage earnings were high and tthneer–esewlleerre- no bf acountosUmmoebrileosr or applianc soft goods – es or r-ea-pea other hard goods -a-rrarvest-Tl1e – paalv;ta-eirlna-bclhea. nSgeod – .- from 1946 until recently. Increased competition from discount houses and higher costs lowered profit margins and although sales increased, earnings did not keep pace. There are some signs that this condition is changing. The pent-up demand for hard goods has been at least partly satisfied and a larger portion of the consumers income is being spent on soft goods. Branch store expansion into the suburbs is offsetting the declining sales in the big city stores. These factors, combined with a better control of costs and a favorable economic climate, could result in a more favorable earnings picture. Since 1946, the department stores have done little marketwise. In most cases, they are selling below the 1946 highs. During the past eight years, however, they have built up substantial potential base patterns that indicate the possibility of substantial price appreCiation. The pat- terns vary with different stocks. h few are noted below ALLIED STORES (55) The upside penetration of the 36-48 area indicates an intermediate term 78. The longer term indication is 98. The recent high Was 60. 1946 high was 63 3/8. ASSCCIhTED DRY GOODS (27 7/8) The upside penetration of the long 12-25 base is very constructive.The intermediate term indication is 44 and the long term indication is 64. The recent high was 30. The 1946 high was 36. FEDERATED-DEFT.STORES-(57) Has been one of the better acting stocks in the group. Its recent high of 59 1/4 is considerably above the 1946 high of 35 3/8. The nearer term indication is 67 and the longer term ob- jective is 82. MARSHALL FIELD (34 3/4) is quite a distance below its 1946 high of 57 7/8. It has held in the 20-38 area since late 1946. An upside penetra- tion (if it occurs) would indicate 57 followed by a longer term 72. MAY DEFARTMENT STORES (36) This stock slightly bettered its 1946 high of 35 at the recent high of 37 3/4. hbility to break out of the 28-35 area was constructive. The longer term objective is 63. Nearer term in- dication is not clear. EDMUND VI.TABELL WALSTON & CO.

Download PDF

Tabell’s Market Letter – March 04, 1955

Tabell’s Market Letter – March 04, 1955

Tabell's Market Letter - March 04, 1955
View Text Version (OCR)

Jr; Walston &- Co. MEMBERS NEW YORK STOCI( EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,t,ldl OFFICES COAST 10 COAST BY DIRECT PRIVATE WIRE SYSTEM TAB Ell'S MARKET lEnER March 4, 1955 The near-term action of the market continues impressive. The Dow-Jones Industrials moved into new high territory at today's close of 419.68. The rails made a new high yesterday at 153.56. Still higher levels over the intermediate term would be Intermediate term objectives for the Dow-Jones averages are now in the 425-450 area for the industrials and 155-160 on the rails. Support levels are now at around 412-410 and149-l1t7. the market is subject at any time to minor cClrrections Of of aGbOou\Jt.-r9seF, — on unfavorable news. Any further advance will, of course, continue to be selective. It is interesting to note that most of the very high-grade investment stocks are already at or close to upside objectives on my technical work. It is also interesting to note that since last November Barron's low-priced stock index posted a gain of 27.5 as compared to a rise of less than 6 in the Industrial average. This is the typical pattern of a mature bull market. I would expect this type of action to continue over the next few months, with the secondary and speculative equities showing the most dynamic price action, compared to negligible rises in investment-grade securities. I have mentioned my liking for oils on several occasions. The technical patterns on most oils are quite favorable with fairly sizeable appreciation prospects over Loth the nearer and longer term and downside support not too far below present levels. The technical patterns on some favored issues are noted below; ATLANTIC REFINING-(38 5/8Y — – — .. .. The stock has formed a strong head and shoulders base at 31-25-32 wii7h a top at 36. The upside penetration indicates an eventual 59-65. Initial objective is 45. Has recently held in the 40-38 range. Upside penetration would indicate 45. A downside penetration would meet support at 36-34. .1– CITIES SERVICE (52) Has formed a strong head and shoulders base at 39-29-37 with a top of 47. The upside penetration indicates 71 followed by a possible 81. Buy on minor declines. There is support at 47. KERN COUNTY LAND (56 3/4) The upside penetration of the 38-49 base area indicates 75 followed by a possible 104. There is downside support at 49-47. MISSION CORP. (43 1/4) The upside penetration of the broad 25-36 area is very ccnstructive and 56 followed by a possible 75. There is downside support at 39-37. SINCLAIR OIL (54 718) – – – – – The head and shoulders base at 39-31-40 has been penetrated upside. The upside potential is 65 followed by 89. There is downside support at 48. UNION OIL OF CALIFORNIA (58) The upside penetration of the 36-45 base area indicates 76 followed by a longer term 95. Has recently held in the 53-59 area. An upside penetration would indicate 65. A downside penetration would meet support at 50. EDMUND vi. TABELL HAISTON & CO. -, Th m.. morand,, it not 10 be tonslnd ., .I off., 0' '01,(..1.100 01 oH,,. to buy O. ull .III, lKuflt…, From I'a 10 t,,, W.hton 1 CO. OlIy EJ.'tn.r IhufOI moly lIa.1t .In 1111 ,.,1 ,II ,ome or ..II of th,. '.(.Uflt… m.ntlon,d h.'11 Til., for.qo,nq m,.l hu b or.od bit' IIi 411 ,.'h-, of ,lIlo.m.llon 0,,1.,. It IS b,t'd IIDon 'IIIo,m'IHI bfh..d I'iSbl. but not neeenadir COlnpt.t., ,t not qu.,.ntd as aocc.,,. 0' fin, I ,nd '5 not 'nt.nded 10 lot,loie ,ndeo.nd.nt ,nqulry

Download PDF

Tabell’s Market Letter – March 18, 1955

Tabell’s Market Letter – March 18, 1955

Tabell's Market Letter - March 18, 1955 page 1
Tabell's Market Letter - March 18, 1955 page 2
View Text Version (OCR)

Walston &Co. ,, MEMBERS NEW YORK STOCK ElCCHANGE AND OTHER LEADING STOCK AND COMMODITY ElCCHANGES NEW YORK PHILADelPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,t,ldl OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER March 18, 1955 After declining to an intra-day low of 387.50 on Monday, the DowJones industrials rallied sharply and retraced about half the 34.33 point decline from the March high of 421.83. Friday's high was 408.09. The rail average has followed a very similar pattern. The rally from Monday's low most likely has gone far enough for the moment. There is overhead supply at 410 that may temporarily halt any immediate advance. The intermediate term technical indicator has not yet . reve-rsed the sell- signal .-Sdme–fiirther oaclITng filling in the area for a few weeks is most likely needed before a new buy signal is given. The industrial average now has a triple bottom at the two January lows of 387.09 and 385.69 and Monday's low of 387.50. A downside penetration of these lows would institute a downtrend and a possible indication of a decline to 370-360. I believe it unlikely that this will occur, but it cannot be disregarded. However, neither the breadth-of-the-market action or the size of the distributional tops formed indicate much further decline at this time. A further broadening of the distributional top would be needed and this would take further time. I expect extremely selective price action over the nearer term while the market consolidates prior to an attempt to push through the overhead resistance at 410-420. For example, I believe the oils, natural gas issues and retail stores should be purchased along with other recommended issues. These three groups show excellent technical action. On the other hand I would avoid and sWitch out of aircrafts and other defense issues. The technical patterns of issues in this group are becoming quite vulnerable and the upside potential does not warrant the downside risk involved. – Each time I visit Texas and thegroGwutlhf–Cpooa-sftenatrleaa1,sofI- bthecloSmve amstor-esecatnIdOn — of our country. Originally, cotton was the largest single contributing factor in the Texas economy, followed by cattle. While these are still important, petroleum is now by far the leading source of income. This is followed by cotton, cattle, gas, sulphur and grains and rice. Texas oil became of major importance with the 1901 discovery at Spindletop near Beaumont. In 1900, Texas oil production was 836,000 barrels or 1.3 of the total U. S. production. In 1953, Texas production was over a billion barrels annually or 43 1/2 of the nation's oil. The most sensational discovery recently was Canyon Reef in Scurry County, West Texas. 185 of the 254 Texas Counties are producing oil. Texas industry is well diversified. In the north, Dallas and Fort Worth about thirty-five miles apart, are the most important cities. Dallas is the financial center of the state. It is the home of the Republic National Bank, the largest in the South, and leading insurance companies like Southwestern Life and Southland Life. Fort Worth is one of the nation's largest livestock and grain markets and is called Gateway to the 1-lest. Between Dallas and Fort Worth are some leading aircraft manufacturing plants. TheConsolidated Vultee plant is one of the largest in the world. Located here also are plants of Chance-Vought, Temco and Bell Aircraft. Houston, which is south of Dallas and Fort Worth, is Texas' most populous city with 52.5 increase from 1940 to 1950. It is the fifteenth largest city in the United States and the principal manufacturing, rail and shipping center of Texas. Connected with the Gulf of Mexico by the Intracoastal Canal at Galveston, it is the second ranking port of the United States on a tonnage basis and the gateway to the fabulous Gulf coast development that stretches from Brownsville near the Mexican border all along the Gulf of Mexico to New Orleans. .. ,-2- This development has been brought about by natural gas which is an excellent fuel for use in the chemical and other manufacturing industries. Since Texas is the largest producer of natural gas and Louisiana the second largest, 'it was only natural that many companies would locate near the source of cheap natural gas. The large plants located in this area must be seen to be appreciated. Among others are the Dow Chemical at Freeport; Monsanto Chemical at Texas City; at Ora-nge; Celanese Corp' -afBlshop; Reynolds Metals at Corpus Christi. In Louisiana there is the nation's largest aluminum plant of the Kaiser Aluminum Company at Chalmette. It produces 400 million pounds of aluminum pig and ingot, more than the entire United States produced each year prior to World War II. In addition, there is the large Esso Refinery near Baton Rouge and the American Cyanamid and the Shell Oil plants in the New Orleans area. In addition to the companies mentioned above, there are many stocks that afford an opportunity to participate in the growth of this area. There are, of course, the utility companies of which quite a few, such as Texas Utilities, Houston Light & Power, Central & Southwest, Gulf States Utilities, Middle South and others, are listed. There are also the railroads. In order of mileage in Texas there are Santa Fe, Southern Pacific, Missouri Pacific, M-K-T, Texas Pacific, Burlington, Rock Island, Cotton Belt, Kansas City Southern and Frisco. In the New Orleans area, Illinois Central, Louisville & Nashville, -S-o-u!,hern ansI ,Gu.f, Mobile & .ohio , ;;;- …,..,1 Written at Fort Myers Beach,Florida EDMUND VI. TABELL WALSTON & CO.

Download PDF