Viewing Month: June 1956

Tabell’s Market Letter – June 01, 1956

Tabell’s Market Letter – June 01, 1956

Tabell's Market Letter - June 01, 1956
View Text Version (OCR)

r r; Wdlston &Co.—-Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw,tmld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER June 1, 1956 After reaching lows of 463.85 and 159.31 on Monday, both averages raIl sharply with the Dow-Jones industrials reaching 483.53 and the rails 167.08 Volume was relatlvely small on both the decline and on the recovery. A buy signal was given on my indicator on Tuesday, buc the r covery was a bit rapid and I would expect another testing of the lows short It is possible that another technical buy signal will be given around June From a longer term point of view, I expect the market to remain in a trading area for quite some time. It is probable thatfue industrial average will pivot around the 480 level with swings of roughly fort;\' points both above and below this focal pOint. Individual stock selection will be most . important. Repl'infe-d' be low 'is 'my -recommelilied- lfsY of-issues issues should be held and added to at or slightly above the support levels noted. Appended also is a list of new suggestions which will be added to thE recommended list if the price levels mentioned are reached. d Present Price Price Recom. Alleghany Corp. Allegheny Ludlum S Amer. Potash 9 37 46 3 3/4 16 16 Barber eil Black & Decker Butler Bros. Calgary & Edmonton Chain Belt 73 42 26 26 59 19 23 16 Chicago Corp. Cities Service 64 38 Colgate-Palmolive 56 60 Cornell-Dubilier 31 21 Cutler Hammer 101 57 Dow Chemical 67 39 Dresser Industries Eagle plcher'- 't – ,- '.2323 – — Food Machinery 65 General Rwy.Signal Hewitt-Robins 80 40 Joy Mfg. 50 Magma Copp er 106 Masonite 45 Monsanto Chemical 41 Montana-Dakota Util. 25 Pacific Petroleum 16 Pan American-World Air 19 Simmons Co. 50 Sinclair Oil 65 vies tern Pacific 74 Westinghouse Air Brake 32 Yale & Towne 30 51 59 25 23 75 41 31 26 11 12 36 46 73 33 18 Yield Advice Buy-Hold.Support at 8 4.0 Buy. Support at 36-33. 2.2 Buy-Hold. Support 45-43. 3.4 Buy-Hold. Support 70-66. 2.9 Support 40-38. 5.4 Buy-Hold. Support 25-23. 0.4 Buy-Hold. Support 23-22. 4.4 Buy-Hold. Support 65-60. 4.2 Buy-Hold. Support 23-22. 3.8 Buy-Hold. Support 60-58. 5.4 Buy-Hold. Support 55-50. 5.5 Buy-Hold. Support 30-28. 3.6 Buy-Hold. Support 90-87. 1.5 Buy-Hold. Support 65-60. ,4 ,lJ. .tluYHo.ld .SUPJl,OXt 66-6.4. 4.5 3.1 Buy-Hold. Support 60-57. 5.0 Support 78-75. 5.0 Prospectus issue. 3.7 Buy-Hold. Support 48-45. Buy-Hold. Support 105-95. 3.8 Buy-Hold. Support 42-40. 2.4 Buy-Hold. Support 40-38. 4.0 Buy-Hold. Support 24. Buy-Hold. Support 15. 4.2 Buy-Hold. Support 18-17. 6.0 Buy-Hold. Support 51-49. 4.6 Buy-Hold. Support 62-60. .4.1 Buy-Hold. Support 70-67 3.7 Support 30-27. 5.0 Buy-Hold. Support 28-26. In addition following issues, to if the above, I available at would also advise the the following prices. purchase of the Present Price Amerada' 104 J Blaw-Knox Bristol-Myers 36 34 British Amer.Oil 40 Eastern Airlines 47 Fansteel 47 Gen.Port.Cement 60 Hooker Electro. 42 Imperial Oil 49 Inter.Nickel 93 Inter.Petroleum 34 Johns Manville 50 Buying Range 103-99 33-32 33-3138-36 47-45 43-42 56-54 40-38 45-43 90-85 50-48 Link Belt National Distil. Norfolk & YJest. Pittston Co. Royal McBee Sunray Mid-Cont. Sylvania Elec. Tennessee Corp. United Airlines u. S. Lines Present Price -48 63 25 64 48 33 26 50 51 39 26 EDMUND vi. TABELL Buying Range 46 44 60-58 24-23 64-62 45-43 31-29 25-24 49-47 50-48 36-35 26-24 h t h 'hmarket letter IS not, Rnd under no circumstances IS to be construed S' n 0.IT r IIr orr q.-llllitSilffi'rf'thTb.'lnoG1Cc'Jllrifihl(1caf,(!brteccdotnosthreureedmfl..,TahrecpmrcfsOcinmt.alttiioolnl contamed herem IS not guaranteed ns to accuracy or hnd t e 1by V.'aio;ton & Co. Inc All expresSIOns of oPh!llon nrThu JCC ktOt s…. Inf t e & Co Inc or !lny presented mere!) as general, Director or Stuckholder thereof, may commentary on dny to dny marhet h!Jnewes ,dIlnl dIn1t\eorteasst nIncothmepfiejctccurnlllnea!jYSmIS,nAdondI',dIOnl!. I u. .. ct Ito referred to herein \\ III he furnished upon request ''iN ;101

Download PDF

Tabell’s Market Letter – June 08, 1956

Tabell’s Market Letter – June 08, 1956

Tabell's Market Letter - June 08, 1956 page 1
Tabell's Market Letter - June 08, 1956 page 2
Tabell's Market Letter - June 08, 1956 page 3
View Text Version (OCR)

'I 'I 1 NEW YORK Walston &CO. Inc. Membe1'S New York Stock Exchange PHILADELPHIA' LOS ANGELES SAN FRANCISCO BASLE (SwH,Id) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 8, 1956 ,' ,i i'Ii, 1,\ ,I !I ! I, After reaching a high of 485.82 on Tuesday, a recovery of over twenty points from the May 28th low of 463.85, the industrial average dipped to 467.99 on Friday and may be rn the expected process of testing the May low Ability to hold above the 463-458 support level would indicate a possible rally to 495-500. I'. decline below the support range would most likely indi- cate 440-420. Still continue to believe that the market will hold in a wide 100-point trading area for a considerable period of time, preparatory to building a base for the next phase of the advance similar to the 1953-1956 rise. consQ.LidatiRl'LperJod,tbe. a3J'Lragesc,an-Ee. ' more or less'ignore'd while-attention'-rs focussed on individual issues. One of the basic technical tools is the measurement of relative strength. This measurement may be defined as an attempt to discover what stocks are outperforming the general market by comparing the action 'of indi vidual stocks to that of an average. Usually,strong stocks continue to be market leaders for a considerable period of time. Many complicated charts and griphs have been devised for such measurements. It is often pOSSible, however, to make simple yet illuminating relative strength comparisons by simply comparing the prices of stocks at two different periods in a market cycle when average prices were about the same. Such a comparison is afforded by comparing .the stock prices on May 28th when the Dow-Jones Industrial average made an intra-day low of 463.85 with prices at their January-February lows when the Dow-Jones made a low of 458.21, within about 1 of the subsequent May low. The table below lists every common stock on the New York Stock Exchange which, at its low price on May 28th, was approximately 10 or more above its January or February low. Issues marked with a were recommended for purchase in our recommended list published January 27th. A further test is being provided by the present decline, Stocks which hold above the recent May low could r -. . — , May – Jan-Feb. May 28th Low Low Low Low Addressograph-Multi. 108 Air Reduction Allegheny Lud. 36 3/8 30 Alum.Co. of Amer. 82 Aluminium, Ltd. American Bosch 9196 7//8 12 Amer.Broad-Para. American Chain 24 5/8 38 1/2 Amer.Encaustic Tile 13 1/2 Amer.European Sec. 35 3/8 Amer. Export Line 17 3/8 Amer. Gas & Elec. 47 3/8 Amer.Hawaiian S.S. Amer. Hide & Leath. 863 1/2 Amer.Home Frod. 84 1/2 Amer.Mach. & Fdry Amer. Molasses American NeVIS Amer.Shipbuilding … Amer. Steel Fdry Jmaconda Copper Anaconda Wire & C AFil Produc ts Argo Oil Armour 24 1/8 13 1/8 28 1/2 .39 1/4 65 2i63 1/4 15 35//48 Associates Inv. 55 Atlantic Coast Line Baltimore & Ohio Barber Oil Barker Bros. 43 3/8 41 3/4 60 20 1/4 132 41 3/8 35 1/8 106 1/2 118 20 7/8 29 7/8 42 1/2 17 3/4 40 20 3/4 52 5/8 107 5 121 1/2 26 15 31 775///888 66 1/4 43 3/8 72 1/8 73 7/8 19 61 31//24 54 1/4 46 3/4 72 1/2 25 1/4 Bell & Howell 28 1/4 Benef. Finance 18 5/8 Best Foods 44 3/4 Black & Deck. 32 1/8 Blaw-Knox 28 1/2 Boeing Air. 69 1/8 Borg Vlarner 38 1/2 Bristol Myers 28 3/8 Brunswick-Balke 25 j/8 Bucyrus Erie 38 1/8 Buffalo Forge 27 Burroughs Add. 28 1/2 Butler Bros. Callahan Zinc Carborundum 22 1/2 5 1/4 31 1/2 Caterpillar Tr. 55 1/2 Celotex 34 Cent. & So.W. 33,1/2 Certain-teed Chain Belt 22-'1/4 54 1/2 Checker Cab 7 Chic 37 Chic.Pneu.Tool 44 1/2 Chic.Yellow Cab 10 7/8 Chickasha Cotton 20 1/4 Chile Copper 51 1/2 Cincinnati Mill. 37 1/4 Cities Service 54 City Investing 12 3/4 City Products 30 40 20 1/2 51 1/2 41 1/2 33 77 1/2 42 3/4 32 3/8 34 1/4 42 1/4 31 36 5/8 265 11//28 37 1/2 70 1/4 39 1/4 36 7/8 '28 'V8-' 67 3/4 9 1/4 42 1/4 55 1/4 13 7/8 6270 45 60 1/4 14 5/8 36 1/2 ThiS market letter IS not and under no 1'1 to he construed as, un offer to sell or a 8ohcltatIOn to buy nny sccuntlCs referred to herem. The mformatlOn herein IS not as to accuracy or completeness and the furm'lhmg- thereof I not, and under no circumstance'! IS to be reresenrtatlon Iby Wlliston & Co 'VN aglhn\e an Interest Inc the All e'(presslOn of opinIOn are subJcct to change Without nohce secunbC'l ment1med herein ThIS mllrh.et Jetter IS mtenderl 'l,nil Wliiston pr('scntctl 8..- Co, Inc, merely as a or any Offlccr, Director or toc general, mformnl commentfilY on (nyert0 reo, (fly r nev.s anrl not a complete nnalysls Addltl)nallnformutlon v.lth respect to any &('Clllltle; referred to here n WII! be furlllshcd upon request. .. I …… , l.i I i ' ,, I, .- Jan-Feb Low Clev.Elec.Ill. 34 1/4 Cons. Copper. 17 3/8 Continental Can 39 1/4 Continental Oil 94 Cooper Bessemer Cosden Petroleum Crown Zellerbach Cudahy Packing Curtis Publish. 25 1/2 35 3//8 53 5/ 8 734 266 Curtiss-Wright Cutler Hammer DDeenVvielbr,iRssio Grande Diamond J.lkali 1/8 26 1/4 43 1/2 Diana stores 13 3/8 Dow-Ghemica-l Dresser Ind. 49 5/8 Eastern Corp. 26 1/2 East.Stain.Steel 29 1/8 Emerson Elec. 27 Eversharp 15 1/8 Ex-Cell-O 62 1/4 Fansteel 31 Filtrol 62 Food Machinery 51 Freuhauf Trail. 25 1/4 Jamewell Co. 42i 5/8 Gardner Denver 0 Garrett Corp. 38 Garwood 6 General Cable 24 5/8 Gen'l Rwy. Signal 61 1/2 Georgia ac.Plywood 36 Gillette 40 1/8 Great No.lron Ore 25 1/2 Greenfield Tap 31 liB 85 GUll – 33 Halliburton Oil Well 58 ,1/2 Harbison \'Ialker 48 Hertz Corp. 27 3/8 Eooker Electro. 35 1/8 Hotel Corp. 5 3/4 Houdaille, Ind. 12 5/8 Houston Llgh0. 41 1/4 Hudson Man. 1 7/B Hudson Bay Mining 64 Hussmann Refrige. 32 3/4 Idaho Power 27 5/8 Interchemical Corp 47 1/4 Internat'l Nickel 7B Internat'l aper 108 Int.R.R.Cent.i.mer. 15 1/2 Internat'l Salt 94 Internat , 1 Tutil. 3B 1/4 IJsaleagnedr CMraecehkinCe oal 3313 11//82 Johnson & Johnson 67 1/4 Joy Mfg 35 liB Kaiser Alum. 34 7/8 Kansas City South 71 1/4 Koppers Co. . 52 1/4 Kroehler Mfg. 22 Link Belt 47 1/2 Liquid Carbonic 35 1/2 Loew' s J Inc. 18 7/B Lone Star Cement 64 1/4 Long Bell Lumber 35 Louis. G & E 49 3/4 Louis.& Nash. B3 1/2 Lukens Steel 42 M & M Woodwork. 21 5/8 Mack Truck Marathon 26 1/4 33 1/4 -2- May 28th Low Jan-Feb May 28th Low Low 38 3/4 19 7/8 45 1/4 111 30 3/4 Masonite McGraw -Elec. McGraw-Hill Mengel Merck 35 1/4 47 71 1/2 33 3/8 24 5/8 41 1/2 61 1/2 87 1/2 40 1/8 30 45 7/8 62 12 1/8 Mergenthaler L Mesta Machine Midland Enter. 44 5/8 49 1/4 48 54 1/4 46 1/2 58 880 43 1/28 5/ 3 4 30 52 )5 l/B -6-4- 5/8 63 1/2 31 33 1/8 31 Minn.Honeywell Minn.Mining Mission Develop. Monarch Mach. 58 70 105 130 1/4 29 5/8 34 21 1/4 24 Montana Power 39 5/8 44 5/8 Moore-McCormack IB 3/8 20 5/8 Nash–G-hat,,&-St-;-L—-1-18- -1-33 – – – Nat'l Acme 62 68 1/2 National Cash 34 liB 45 Nat'l Container 19 3/4 30 5/8 Nat'l Cylinder Gas 20 24 3/4 17 1/4 Nat' 1 Distillers 20 3/4 24 1/4 ' B3 Nat'l Gypsum 40 3/4 Nat'l Lead 453/B 53 1/2 76 1/2 91 ' 71 7/8 61 Nat'l Mall.Steel Nat'l Supply 32 3/4 37 1/4 47 3/4 63 1/4 30 5/B Newmont Mining 88 7/8 107 1/2 28 1/4 55 43 71B Northeast Cap. Norwich Pharo Ohio Oil 16 1/8 19 3/4 47 5/8 52 3/4 33 5/8 39 1/2 7 1/8 OtiS Elevator 2B 1/4 Owens Ill.Glass 33 1/4 42 61 1/4 67 3/4 77 Pacific Amer. Fish. 9 3/4 10 3/4 51 Panhandle Oil 11 12 1/2 46 1/8 Parmelee Trans. 28 7/8 Penn.-Salt 12 1/2 15 1/4 45 3/4 51 5/B 34 7/8 Pepsi-Cola 20 1/8 23 1/2 1086 1 1 //2 2 Petrol. 71 PitneY-Bowes 55 3/4 Pitts .Cons .Coal 78 3/4 91 1/4 45 53 32 1/2 3B 1/4 38 3/8 40 1/4 6 3/4 15 5/8 47 1/4 2 1/2 77 3/8 Pitts. Metal Pitts.Plate Glass Pitts Steel itt s & 'II.Va. Pittston Co Plymouth Oil Poor & Co. B 37 1/4 74 24 7/8 26 36 5/B 30 1/4 22 54 B2 3/4 27 5/8 29 1/8 45 5/B 34 29 3/4 41 3/4 Pure Oil 37 3/4 42 1/4 31 1/2 53 1/2 90 1/2 122 1/2 Reed Roller Bit R l' Mf e lance g Metals 20 1/2 1B 1/2 45 1/ B 24 1/2 25 1/8 6 /8 63 IB 3/8 121 4I 5 1/4 4400 11//22 75 3/4 45 1/2 43 7/B B2 1/4 60 l/B Rhule1ander Paper Ridgeway Corp RRoohymal&DHuatcahs RoyIaM cBee San Diego Gas Sangamo -Elec. Schering Corp Shamoon Ind. Shamrock Oil 345/B 46 34 3/4 47 39791 5/B 140327 1/2, 27 1/2 31 3//8 18 1/4 21 1 4 29 1/2 -33 44 7/B 23 3/4 52 37 33//4B 39 7/8 51 1/4 25 1/2 62 Shell Oil Signode Steel 62 1/8 77 1/4 21 5/B 27 40 1/4 22 1/8 72 Simonds Saw Sinc lair Oil Smith Corona 55 1/2 64 55 5/8 62 1/2 24 5/8 36 1/4 75 1/2 Socony-Mobil 61 1/4 69 3/4 57 1/2 Southern Railway 98 1/2 108 93 1/2 Spencer Kellogg 17 1/4 20 7/B 72 3/4 33 Square D Stand .Gas & Elec 51 1/2 61 9 5/8 10 3/4 31 Stand.Oil of Cal. B7 1/2 95 1/2 41 1/2 -3Jan.-Feb. May 28th Low Low Stand.Oil of Indiana 48 1/2 55 1/4 Stand.Oil of N.J. 49 1/2 54 1/8 Starrett, L.S. 43 3/4 51 Stauffer Chemical S,unbeam..– – 51 1/2 ,,-32 62 1/2 — Sylvarlia Elec. 42 – 47 3/4 Tennessee Corp. 45 49 Texas Gulf rod. 38 1/2 42' 1/8 Texas Pac. Coal 33 3/4 40 Texas Pac. R.R. 150 171 Texas utilities 34 5/8 37 1/2 Thatcher Mfg. 15 3/8 18 3/4 Thermoid 10 3/4 12 1/2 Thompson Prod. 48 3/8 53 3/4 Tide Water Assoc.Oil 33 39 Timken Roller Bear. 62 1/4 69 Trane Co. 44 1/2 56 1/4 Truax Traer 25 27 1/2 Union Bag 31 1/2 39 3/4 United Carbon 48 1/4 56 3/4 United Elec. Coal 21 26 U.S. & Fgn. Sec. 28 1/8 34 U.S. Freight 54 62 U.S. Gypsum 54 1/2 60 1/2 U.S. Lines 22 5/8 25 5/8 – U.S. lywood 37 3/8 41 1/8 United \'/allpaper 1 3/4 2 Univ.Cyclops Steel 41 1/4 48 1/2 Univ.Leaf Tobacco 32 35 3/4 Vanadium 38 1/2 44 1/2 Vert.Camaguey Sugar 7 7 3/4 Virginia Elec. & Pro 38 1/4 43 7/8 Virginian Rwy 46 3/8 61 1/.4 Vulcan Detinning 16 5/8 19 Walworth 12 3/4 14 7/8 Warner Bros. 18 1/2 20 3/4 Warren Petroleum 65 1/4 86 v/aukesha Motors 25 1/2 28 1/4 Wayne Knitting 22 24 Wayne Pump 19 1/8 21 1/2 West Kentucky Coal 25 3/4 34 ,vest Virginia Pulp & Paper 42 3/4 56 Western Maryland 47 54 1/2 vlestern Pacific 63 70 1/2 vlhite Motors 36 1/4 40 3/8 Wilcox 'Oil 30 1/8 50 — Wilson & Co 12 5/8 14 7/8 Wilson Jones 14 1/4 17 1/8 Worthington Corp. 41 1/8 46 1/4 Young Spring & Wire 24 27 EDMUND vi. T,BELL WALSTON & CO. INC. ,'-. /.0

Download PDF

Tabell’s Market Letter – June 14, 1956

Tabell’s Market Letter – June 14, 1956

Tabell's Market Letter - June 14, 1956
View Text Version (OCR)

Walston &- Co. Inc. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER lEADING STOCI( AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Switmld I OFfiCES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM EDMUND W. TABELL INSTITUTIONAL LETTER June 14, 1956 Looking at the current gyrations of the stock market, it is very easy to attach a great deal of importance to PreSident Eisenhower's recent ill- ness and the possibility that he may not now be able to run for a second term. Viewed in the context of market happenings over the past fourteen months, however, it would appear that the political situation does not alter the fundamental long range investment climate. It is rather instructive to look at the action of the Dow-Jones in- dustrial average,over the past fourteen months as shown on a geometric scale which shows moves' in a percentage rather than a dollar amplitude. In April of 1955 the averages broke through a March high of 421.83. They broke back below this high for a short time then rose sharply to 489.84 in September of last year. Mr. Eisenhower's illness then drove the averages to an Octo-, ber low of 433.19, when it became obvious that Mr. Eisenhower would not run for a second terll'\l. Then after spending four months attempting to break through resistance at 490, the averages continued to a high in April, this year, of 522.18. They have since declined to a low of 463.85 and are now at 487.08. What all this proves is that for most of the past fourteen months the Dow-Jones average has held approximately 25 trading range. There is no need, however, to cite to the professional investor the terrifically diverse action which has characterized the market during this time. Many stocks are now selling at close to their low,s for the past four- teen months and many even today are posting newall-time –highs. Thus the market action for more than a year has been very similar to that encounter- ed in 1951-53. As has been reiterated in this letter many times, this action can be expected to continue. It is difficult to enviSion a roaring bull market for the next year or so since it must be conceded that many stocks are adequately priced and that there is likely to be no drastic improvement in the business picture such as witnessed in 1954-55. It is, however, obvious to the security analyst who seeks values that many such are still available and that in many cases, despite the general business picture, earnings in 1956-57 may be increased sharply. It would thus seem that the task of the portfolio manager over the next year or so will be one of weeding out equities which have become unattractive or over-priced and replacing them with stocks which still appear to offer sound value and appreciation possibilities. It will be the attempt of this letter to pinpoint securities which can be ex- pected to act worse than the general market over the coming months and to attempt to pick out securities inJgroups which can be expected to outperforn the general list. ' The following equities all seem to be improving in quality, which should justify their inclusion in institutional portfolios. In each case, technical and fundamental factors seem to indicate higher prices and they are accordingly recommended for purchase. Allegheny Ludlum Steel Blaw-Knox,Co. Certainteed Products Dresser Industries Eastern Airlines Food Machinery & Chemical Corp. General Railway Signal Hewitt-Robins, Inc. International Nickel' Joy Manufacturing Masonite Corp Monsanto Chemical Richfield 011 Sylvania Electric Products United Shoe Machinery EDMUND W. TABELL WALSTON & CO.INC. Th,s memorandum is lIot 10 be construed as lin offer or soliCitation of offers 10 buy or ,ell any securities from time to time Walston & Co. or any par'ner thereof, may have an inierul In some or all of the securitin mentioned herein The foregOing material has been prepared bl1 us as a matter of inlormo!llion on1r It IS baled upon ,formatoon believed reliable but not necessaily complete. IS not gUdrdnteed lIS IIccurate or flnlli. and n nat Inlended to foreclose Independenl ,nqulry

Download PDF

Tabell’s Market Letter – June 15, 1956

Tabell’s Market Letter – June 15, 1956

Tabell's Market Letter - June 15, 1956
View Text Version (OCR)

NEW YORK Walston &Co. – – – – I n c . Membe!'s New YOTk Stock Exchange PHILADELPHIA' LOS ANGELES SAN FRANCISCO BASLE ISwa,ld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER June 15, 1956 FOOD MACHINERY & CHEMICAL CORPORATION Statistics Current Market Current Dividend Current Yield ,—- ommon 'stocK 66 2.00 3.3 41 557 000 13083000 The term growth industry has been rather freely applied of late to many industries in our economy. There are a number of industries, however, for which the term may we by justly used in in the Earned per Share-1955 4.53 show a future growth substantially Sales-1955 264,619,766 in excess of gross national product over the next few years. One such Mkt. Range 1955-56 71 – 47 industry is the chemical industry. Another is convenience type food packaging. Still another is materials handling. And still another is synthe- tic rubber and petrochemicals. When a company can be found with an exceller position in all of these fields, it certainly deserves the scrutiny of the investor. When that compaqy is selling at less than 15 times 1955 earnings and less than 12 times anticipated 1956 earnings and, in addition, commands a first class investment rating, it becomes apparent that sound value is offered. Such a company is Food Machinery & Chemical Corporation. Food Machinery's business can be roughly divided into three divisions chemicals, accounting for almost 50 of volume; machinery, mostly concerned with the growing and handling of food, about 35; and military products. The important chemical operation is carried on through a number of divisions. Most important from a sales point of view is the agricultural division producing insecticides, herbicides, etc. These products can be ex- pected to have a growing demand as farming methods become more and more mechanized. pTehreo-cxo1mdpeaannyd'soBfhececro- Chemical division is an bxygen-'cfiemi'c-als, -wh-ile- important producer fhe- rnterm'ounta'ifI- Chemical Co., 90 owned, produces high quality soda ash. The Westvaco Chlor Alkali Division, now undergoing extensive modernization, produces Chlorine and Carbon Bisulphide, while Westvaco Mineral Products Division manufacture potassium phosphate compounds which are finding a growing market in liquid detergents. Chemical sales are growing in importance to Food Machinery and in 195 for the first time they accounted for over 50 of non-military sales. Total sales of chemical products for 1956 may run more than 15 ahead of last yea, It is expected that by 1960 chemicals may account for better than two-third of total volume. The machinery division produces agricultural equipment, pumps, canning and freezing machinery, and packing and packaging equipment. The last three items should attain more and more importance in line with th sharply rising trend in pre-packaged foods which afford more leisure time to the housewife. The Food Machinery story would not be complete without mention of Petro-Tex Chemical Corporation, jointly owned with Tennessee Gas Transmissic The company is an important producer of petrochemicals and recently acquirec a butadine synthetic rubber plant from the government. Food Machinery will probably receive a dividend from Petro-Tex for the first time in 1956. As can be seen, a large part of FDM's sales consist of true growth growth; sales over athree tofive year period may well be expected to reach 400 million, including the equity in Petro- Tex, as against 264 million this year. Earnings on this sales base could well approach 9 – 10 per share. For 1956, sales may approach the 300 mil lion mark with earnings between 5.25 and 5.50 per share. Based on this projection, the long term technical outlook may well be realized. The stock has an upside potential of 185 with support at 60-57. I is accordingly recommended for purchase. EDMUND W. TABELL 'vIALSTON & CO. INC '\ ThIS mnrkd letter IS not, Ilnd under no Clrcumqtllnces IS to he construed as, an offer to sell or a sohcltlltJon to buy any securities ,referred to herem. The mformatlOn \ contained herem IS not Aunranteed as to accuracY or completeness nnd the furmshlnv; thereof IS not, Id under no Circumstances IS to be construed RI, R representation 1\ by Walston & Co Inc All c..preS810ns of opinIon arc subject to change Without notIce )ylllqton & Co, Inc, or any Officer, DIrector or Stockholder thereof, may \ have an Interest the seCUritIes mentIOned herem ThiS market letter IS mtended Rnd Prcsented merely as a genernl, lllforrnlli eommentury on duy to dll)' market n.w,ndno.t….mPI.t.ana'Y''' ..'' \I

Download PDF

Tabell’s Market Letter – June 22, 1956

Tabell’s Market Letter – June 22, 1956

Tabell's Market Letter - June 22, 1956 page 1
Tabell's Market Letter - June 22, 1956 page 2
View Text Version (OCR)

Walston &- Co. – – – – – I n c Members New YOk Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANC'SCO BASLE (Swa,.,laod) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER June 22, 1956 SYLVANIA ELECTRIC PRODUCTS. INC. Statistics The magic word electronics encompasses a number of fields. Current Market ' 1/2 One of the biggest problems for Current Dividend 2.00 the investor is obtaining repre- Current Yield 3.9 sentation across a broad spectrum of .. ' specialty whTcli-may be- affected- -, by special market or company con- ditions. Such a representation Long Term Debt 38,850,509 we believe, obtained in Sylvania i4 cum. pfd. 4.40 cum.cv.pfd. ommon 95,581 shs. 86,14'5 shs. 3,020,871 shs. Electric Products. In addition to servicing its own production, Sylvania is one Mkt. Range,1955-56 55 7/8 – 41 of the largest factors in a myriad of electronic parts and compo- Convertible into 3.05 shs. Common through 1961. nents. It produces these components not only for its own use in radios and TV sets, but also for use by other manufacturers in a wide host of fields. It is one of the largest producers of picture and vacuum tubes, plus sub-miniature tubes and special tubes for military use and industrial applications. It produces any number of small metal and wire components for use in its own tubes and those of other manufacturers; and in addition produces a number of chemical and metallurgical products which have application in a wide variety of electric uses. This across-the-board representation in a wide variety of electron- – -.ic Sylv,aniafr.omthe vag.ries ofv;ax'iousp.ortionsof. industry. For instance, when production of TV sets declines,-the number of replacement parts used tends to rise. Thus, in 1955, a year when many electronic companies were having difficulties holding their own, the com- pany was able to earn 4.29 per share vs. 2.92 per share in 1954. Syl- vania's large stake in the components business also augurs well for the future as color TV becomes more and more of a factor. Color sets are infinitely more complex than black and white sets and the servicing of these sets will require a far greater parts supply than has formerly been the case. . Sylvania's sales are hardly limited to the television field, however. Its parts are used in practically every electronics application, including computers, radar, defense work, missile systems, detection devices, etc. Its stake in the military and industrial electronics field is most important. It is agreed by most analysts that industrial application of electronics is expected to rise almost 50 over the next few years. These fields will provide ample room for Sylvania to grow in the future. A bright spot over the longer term is the company's atomic division. President Don G. Mitchell has stated that Sylvania is probably the largest concern in the field of atomic fuels and components and has projected that over a period of time the atomic energy division will become as large as Sylvania is today. A large part of Sylvania's sales today are in the lighting field. This compliments the electronics business very nicely, and, while perhaps not as dynamic from a growth standpoint, it has been and will continue to be an important and enlarging source of profit. The company is the third largest manufacturer of incandescent lamps and through astute marketing has obtained a growing position in this field. It is the second largest producer of fluorescent tubes and is devoting a good deal of research to the development of new tubes for fluorescent lighting. In 1946, the company entered the flash-bulb –' ThIS market Jettl'r IS not, and under no clTcumstnnces IS to he construed as. an offer to sell or a 6ohcltat\on to huy any seCUrlt.les lcferred to herem The informatIOn c(lntlllned herem IS not J,tuarantced as to accuracy or completeness and the furnishing thereof IS not, and under no ClrC\lmstance! IS to beconst.ruetJ as, a by Walston & Cn Inc All expresslon; of opimon nrc subJeet to chanllc ithout notice Walston & Co. Inc, or any Officer, Director or Stockhold(r thereo may h.l\c.ln Interest the! securities mentIOned herem ThiS market letter IS Intended and (Jlcscnted merely IlS .1 ,,encrnl, 1nfO! m.al commentary on dJ.Y to day J.ntI ilot IlS a complete .maIY!;ls Additional informatIOn With respect to an), secUrities referred to herem Will be furnished UjlOn request 3 –. -2- business and this division has grown astoundingly as expanded leisure time made the nation photography conscious. In the short space of ten years Sylvania has become the largest producer of these bulbs. It can thus be seen that Sylvania dominant Straaaling-the-fluge e-lectronics field;-not only throug;J1Hi-own -pro- duction but its services to other manufacturers. This position has been achieved under the astute guidance of President Mitchell and a capable staff and it is considered that Sylvania's management has been one of the most dynamic in the electronics or in any other industry.Under the aegis of Mr. Mitchell, sales have increased more than five-fold since the war and net income has increased at an even greater rate. Earnings for the first quarter were 1.28 per COffimon share, leading to an estimate of better than 5.00 earning power for 1956. With the improving background for the entire electronics industry, Syl- vania figures to show further growth in the years ahead. Color TV, which should reach a mass market this Fall, will have important im- plications, both for complete sets and component parts. The use of electronic equipment in national defense will continue to grow as will industrial electronics automation. Over the longer term atomic energy provides a huge potential. Technically, the stock has a long term objective of 75-80, with support just under the current market. It is recommended as a purchase as giving representation in one of America's foremost industries. – – –EDMUND W. TABELL WALSTON & CO.INC. AWTAMB ,

Download PDF

Tabell’s Market Letter – June 29, 1956

Tabell’s Market Letter – June 29, 1956

Tabell's Market Letter - June 29, 1956 page 1
Tabell's Market Letter - June 29, 1956 page 2
View Text Version (OCR)

Walston &- Co, Inc. Memben New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swihed.,dl OffiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TAB Ell'S MARKET lEnER June 29, 1956 In a slow, leisurely fashion the market has moved ahead rather nicely since the May 28th low of 463.85. In a month, the industrial average has rallied over 30 pOints to Thursday's high of 494.34. The market has now recovered approximately half of the sixty-point decline from the April high of 524.37. The sixty-point April-May decline was accomplished in two months. The market may have enough momentum to carry somewhat higher, but there is heavy overhead supply at 500-520 and I vlould not expect this supply to be penetrated on the first attempt. I continue to look for a selective trading market for a long time to ,c.ome I ,!lave peit.era ted-constant-ly ,,,;r continue -to-loek-for ding area very similar to that witnessed in 1951-1953 for possibly six months or a year longer. The upper limit will be around the 525 level of April. The lower limit will depend on the state of President Eisenhower's health, but I would not expect it to be below the October low of 433.19, with a good chance that the January and May lows of around 460 may again hold on any subsequent decline. During this period, individual stocks will move in patterns of their own as dictated by earnings, dividends and outlook. It will be a period of neither wide advance nor broad decline in the general market, but a period in which individual stocks may fluctuate widely. It will be a period in which the more informed investor or speculator may fare rather nicely but in which the uninformed participant may not do so well. In 1951-1953, it will be remembered that almost all the blue chip growth stocks rested and consolidated for a period of about two years. This was because the advance from the 1949 lows was rather rapid and a resting period was needed to allow earnings and dividends to catch up with prices and, from a technical viewpoint, for the stocks to build up a new accumulation base prior to the few illustrations are given below. 1949 Low 1951-53 Range Time In Months 1955-56 High .A.luminum-GoTG-f. Corning Glass Dow Chemical DuPont Minn.-Honeywell Minnesota Mining National Lead Scott Paper Union Carbide – 8 14 1/4 43 1/2 10 7/8 8 1/4 8 1/2 11 1/2 33 3/4 35–25 10 2-80 3J-3 27-20 33-26 29-24 72-55 .. 29 22 28 26 28 26 22 28 87 1/2 77 1/2 249 3/4 78 3/4 75 1/2 105 75 1/2 131 I believe this performance will be repeated over the next six months or a year. Timing will be different on each individual issue, of course. For example, duPont has already held in a trading area between 249 and 198 for twelve months. This 20 trading is about the same as the 102-80 trading area of 1951-1953 of twenty-eight months. DuPont has already formed a size- able base with an upside potential of 350. This pattern may, of course, be broadened for six months or a year with a correspondingly higher indication. Some issues have just started to form this pattern, so their eventual upside emergence may be later. It is difficult to pick out groups and discuss their stage of develop- ment because quite often individual issues in each group have diverse pat- terns. The oil group is a good example. Some issues have reached their upside obj ec tive and need restandConsolldaion .– Others still indicate some- what higher levels and still others have just started to move and still in- dicate a very good appreciation potential. All oil stocks have one thing in common, however. They have little downside risk and should be patiently held for further long term appreciation. ' Broadly speaking, the following groups have already formed good bases which may, of course, broaden. They are air-conditioning, airlines, food chains, retail stores, steels, drugs, tobaccos, natural gas. A prolonged trading area for a year or so relieved only by upward moves in a few special issues may appear to be a dull prospect.That is one vlay of looking at it. I prefer to say that the next six months or a year will be the last opportunity to buy the market at this level before a move to.a higher plateau. –''—-h herem Thei;;o;',;.!This market letter IS not, and under no circumstances IS to e eons ru…… as, an 0 or 0 se J'jTi't!''-Iii/IliMrtiJ.N.f-'-toUUu.i;,;h.a.nty\i);t.lNmtoheconstotruednsareprIensfeonrlmaatJtioonn cunt!\lrled herelll IS not guarnlltced as to aCcuracy or completeness and the thewo I ti'l! n or Stockholder thereof rray Ithee and not ns II complete nnUlyblb AdditIOnal mformatlOn with rebpcct to nny sc.urltles referred to herem will be urJll!! commcntn on dclY to (ny upon rcques II , -2- Furthermore, the proven reserves figures tell only a part of the story. Panhandle recently added one-half trillion cubic feet to its reserves through an ingenious program of tapping deeper strata below already exploited fields. Currently, some 370,000 additional acres still await this deeper drilling test. A gigantic amount of additional gas could well be proven through this program alone. Some question arises as to the future treatment of these large oil re- serves. Until April, 1954, it was required that the value of reserves be treated as part of the rate base so that Panhandle was able to earn only a limited, regulated rate on gas produced. At that time, the Federal Power .. – Commission handed down its famous Fair Field rice' decision, -panhancn 'I'hlS'd'eds-ion-;–in which-shea.d. , parated the transmission and producing properties and allowed Panhandle to take the average field price of its gas as a cost ,for rate-making purposes on the transmission business. In December, however, the U.S. Court of Appeals remanded the decision back to the FF'C. Panhandle, of course, appealed to the Supreme Court which has, as yet, taken no action. At this point, the problem could be solved in one of two ways. First of all, the Supreme Court could hand down a favorable decision.Secondly, some form of the Harris-Fulbright bill, vetoed this year by President Eisenhower, could be passed next year. This bill provided for allowance of the fair field price. Either legislative or judicial action seems likely since the old system obviously penelizes Panhandle's gas business to the advantage of straight producers. If such action were not forthcoming it is possible that some form of separation of the producing and transmitting properties would have to occur. With the question of permitted rates still somewhat up in the air, Fanhandle, on January 1, 1955, raised its gas rate under bond and,during last year, so collected some 7.250,000. During March of this year Panhandle was ordered to refund to its customers a prior collected-underbond increase, but only a fraction of 8.6 million so refunded represented tax-savings ,contingency reserves, and reduction in gas contract prices. In the unfortunate event that the company was forced to refund the second increase, a large part could probably be taken care of in the same manner. In addition to production and transmission, anhandle has still another important property, a 40 interest in National Petro-Chemicals Corporation, a major producer of polyethylene plastic, ethyl alcohol and liquefied petroleum gases. Currently earnings from this source – which are, of course, not consolidated – are understood to be running at the rate of about 50 cents per Panhandle share and increasing profitability is foreseen for 1957. The remaining 60 of National Petro-Chemicals is owned by National Distillers which has outstanding some 8,500,000 common shares as compared with Panhandle's 3,500,000. 'I'hus, as earnings improve, a large part of the increase will accrue to Panhandle. In summary, it is felt that 'anhandle common is distinctly undervalued for three reasons 1. Its extensive holdings of natural gas reserves. 2. Its highly profitable gas transmission business. 3. Its growing stake in the petro-chemical field. — This favorable outlook is reinforced by an outstanding technical position. Balanced against these favorable factors is the uncertainty with respect to treatment of reserves by government regulatory agencies. It 1s felt that this uncertainty will be resolved in.cne way or another within the not-too-distant future. At that time, we feel the stock has an excellent chance of selling at a much higher price which will adequately reflect the factorsmentioned above. EDMUND VI. TABELL HAlSTON & CO. INC. awtamb

Download PDF