Viewing Month: September 1956

Tabell’s Market Letter – September 07, 1956

Tabell’s Market Letter – September 07, 1956

Tabell's Market Letter - September 07, 1956
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-, Walston &Co.——–lnc Members New yo,ok Stock EXchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw;t,Idl OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER September 7, 1956 After reaching a low of 492.19 on the Dow-Jones industrials on August 30th,the market rebounded strongly, reaching a high of 512.68 last Wednesda Profit taking came in at the end of the week and the averages closed at 506.76 today. As this letter has continually emphasized, action has been extremely diverse. Certain groups of showed excellent relative strength action during both the decline of 2-3 weeks ago and the advance of this week. By contrast, other groups performed rather poorly. Among the market leaders on both the decline and the advance were the steel, natural gas and aircraft manufacturing groups. These groups have been-consistently among the relative is logical to expect such action to continue. For this reason we have,over the past few months, placed equities from these groups in our recommended list and are continuing to advise purchase of representative stocks from these groups on any minor weakness. The steel group is represented in our list by Allegheny Ludlum and Crucible Steel. These two companies are stainless and high alloy steel pro- ducers and it is this segment of the industry which we feel will demonstra- te the best growth over a period of time. ALLEGHENY LUDLUM (55), which has been in our list for some time, was originally recommended at 16 and has a long term objective of 85. The com- pany showed earnings of 2.44 per share during the first six months of 1956 and despite the steel strike should better the 4.12 shown in 1955 over the full year. Steel price mark-ups and new plant additions indicate an improve ment in profit margins. , CRUCIBLE STEEL (65) is a newer recommendation and was recommended for purchase a few weeks ago at 58-60. The stock has been in a strong technical uptrend channel since 1954 and should continue in this channel under the impetus of increasing sales and improved margins. 1955 net was 8.05 a share and this figure should be equalled in 1956. The erratic showings which have characterized the company in recent years should be alleviated somewhat by recent heavy expenditures on plant and eqUipment. NORTHERN NATURAL GAS (48) Pa.nhanale' Ea-sternPlpe-Line are O onour'- recommended list as favored purchases in the natural gas group. The former has just broken out of a long trading range in which it has held since 1953 and this base appears to indicate considerably higher levels.A recent FPC settlement permitted the company to retain a large part of a rate in- crease collected under bond and under the terms of this settlement, full- year earnings should better the 3.20 (revised) per common share shown in 1955. Long range plans call for a new pipeline to tap rich Canadian reserve PANHANDLE EASTERN PIPE LINE (97) has investment merit both as a util- ity and for its own large natural gas holdings. The stock broke out strong l' from a three-year trading range a few months ago and the subsequent reactio has, as expected, held above th strong 90-88 support level. 1956 earnings should approach 6.50 per common share with a possibility of an increase in the current 3.00 dividend. Recently, no aircraft stocks have been included in our list. This group, as has been shown by its market performance over the past few months has been extremely volatile and speculative, but the continued high rate of defense spending appears to impart some predictability to near term re- sults. We are, therefore, adding Glenn L. Martin to the list. GLENN L. MARTIN (40) is one of the leading producers in the guided missile field.Earnings thus far this year have failed to compare favorably with 1955 due te a change technique. However,improvement is looked for in the third and fourth quarters and full-year earnings may ap- proach 4.50 per share.Substantial improvement should continue to be shown in 1957,based on indicated new orders for guided miSSiles and for the Navy Sea Master seaplane. TechnicallY,ability to penetrate the last remaining overhead supply at 44 would be most constructive and the 18-month accumu- lation base formed would indicate a possible 90. With the addition of Martin to our recommended list,we are elimina- ting Black & Decker which was originally recommended at 19.This stock has a long term potential of 55-60 but has advanced sharply since its original recommendation and we are,therefore,suggesting taking profits and SWitch- ing into other issues in our recommended list. – . ThiS market letter IS not and under no Clrcumstunces 15 to be construed as. an ofTer to !leU or a lItl.v llfU' fl;EQlitiGle!( referred to herem The mformatlon COntnllled herem IS not tt' to accurnc). or eompleteneis nnd the furnish1nj.! thereof i'!.b ernfth.r!iit'lee!f-b to be construed os, a rcpresentatlCln hy Wnlston & Co . Inc. All e'l(l)rCSlOns of OPInIOIl nrc subJect to change Without notiCe. or Stockholder thereof, may nn Interest Ifi the sccuntll'S mentioned herein ThiS market letter 1'1 intended and presenttlr nM'l!'Irayft'l \.!e'li't!rnP. Mrl')rnd.lYoJ'PimenWry on day to day m,lfkH nc\\'l and not as n complcte analYSIS AdditIOnal miormatlOn WIth respect to un). secUrities referred to herem will be iurlllshed upon request, WN 301 i.,llIla,IIIII h. . . . i .11,1

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Tabell’s Market Letter – September 14, 1956

Tabell’s Market Letter – September 14, 1956

Tabell's Market Letter - September 14, 1956 page 1
Tabell's Market Letter - September 14, 1956 page 2
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.- Walston &Co. Inc, –….;. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swaml,d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER September 14,1956 BELL & HOWELL COMPANY Statistics One of the fruits of America' Current Price 42 current prosperity is that the Amer' Current Dividend 1.00 can worker at all levels is enjoyin Current Yield 2.4 an unprecedented rise in leisure ti and discretionary income, that por- Funded Debt 3,800,000 tion of his income available for 4.75 pfd. Stock 19,200 shs. spending on items other than the 4.2-5.cpfd. Stock – –.,20, .. Common Stock 521,194' shs. the fastest growing of American leisure time pursuits has been the Sales – 1956-E 45,000,000 hobby of photography. This hobby is Sales – 1955 42,100,000 now, being engaged in by millions of Americans, stimulated in part by th Earnings per Share-1956-E 4.00 growth in income and leisure time Earnings per Share-1955 3.51 mentioned above and, in part, by population statistics, which show Mkt.Range – 1956-1951 – an increasing number of babies bein born each year, thus lending impetu to the tendency to make photographi records of growing children. An active participation in the coming photo- graphy boom would seem to be provided by the common stock of Bell & Howell 'Company. Bell & Howell has, from its inception fifty years ago, enjoyed a reputation as one of the leading companies in the field of quality home movie equipment. The company manufactures a comprehensive line of amateur motion picture cameras and projectors, together with other types of amateur photographic and optical equipment. Within the past three years it has en- 1 of. via ltsModel 220 and 252 8 mm. models. These cameras, the-least expenslve of which lists for 39.95, are now being produced via assembly line methods at a record rate, and the company is now making plans to enlarge its distribution outlets and reach an even greater mass market through sales to photographic outlets such as drug stores, etc. A full line of accessories, complementing the new models, includes an inexpensive projector which may be used for the showing of home movies. A complete home movie outfit may now be purchased by the amateur for a little over 100. In addition to its less expensive model, Bell & Howell is conti- nuing to manufacture the quality products which have made it famous during the past fifty years. It is one characteristic of the photographic industry that after being broken in with a less expensive model, the photographer often wish- es to graduate to a more expensive and versatile camera. Bell & Howell's leadership in this high quality field is undisputed. Through its recently acquired TDC division, Bell & Howell makes other products which serve the amateur photography market. Among these are '35 mm. slide projectors and home stereo cameras. Over the long term these items are expected to demonstrate a growth trend approximating that of movie – – – — – – — – — ,Some 55 of Bell & Howell's products are sold to the amateur market, but the remaining lines would appear to have as interesting a growth potential. Bell & Howell's Filmosound projector is a standard fixture in almost all schools and with the hugely expanded school program and the grow- ing trend toward audio-visual methods of education, sales in this field should trend sharply upward over future years. Another product with a large potential is the microfilm field which Bell & Howell recently entered and which it shares with Eastman Kodak. In a relatively short space of time, , .. \ — -2- Bell & Howell has elevated itself to competitive status with Kodak in terms of new sales, and its new model reading-recording machine selling for approxi- mately 1800 – 2000 is expected to have growing application in offices of all sizes. Bell & Howell manufactures both micro-film and equipment which is distributed by Burroughs Corporation, thus affording outlets through an established office machines distribution setup. Another important potential for Bell & Howell products may be found in government sales which, although trending downward in recent years, may be expected to flatten out and increase as product line is revised. The Armed Forces are an important outlet for Bell & Howell sound projectors. In addition, the company manufactures gun cameras which are used extensively in jet training and is active in production of a number of guided missile parts. It is felt that military sales can increase in the future as Bell & Howell gears itself toward the new defense spending program. –'Asmay be- s-een fromthe above ,- a-g6cfd–deirl0-f-growth-po- tential in Bell & Howell products. This growth has been planned for and pro- vided for under the leadership of an unusually capable executive team. The current management has formulated a system of five-year planning under which sales, earnings, capital requirements and product introduction are charted- five years in advance. Under this system, Bell & Howell is able to make con- crete plans for expansion well into the future and is' able to introduce and formulate new products with a minimum of start-up costs. Currently, the plan calls for a continuation of the sales growth under which sales have multi- plied more than two and one half times since 1950. – Profit margins on projected increased sales will be protected by a comprehensive integration program under which Bell & Howell manufactures almost all the parts for its products, including die castings, gears, motors, lenses and even leather cases. !,S would be expected in a company of this type, new product development plays an important part in maintaining sales leadership. Among recent new products have been the revolutionary new electric-eye movie camera in which a built-in exposure meter automatically adjusts the lens opening to compensate for existing light. This is the first camera of this type whiC.!.. has ever entered commercial production and -sources as most revolutionary'developments in recent years. Under the five-year many other new products now in the development stages are charted for introduction and it is felt that these products will add considerable new volume to re-enforce the growth in other lines. An indication as to the future of Bell & Howell may be provided by a look at its past record. As mentioned above, sales have been increased from 16.8 million in 1950 to 42.1 million in 1955. Per share earnings have held down somewhat by rising costs but have still risen from 2.60 in 1951 to 3.51 last year. With averages' accruing from integration and modern plant and equipment, future profits are expected at a rate consistent with volume.Despite the fact that per share earnings were down to 911 in the first six months of 1956 from 1.11 last year on increased sales, management is estimating that per share results will be improved over last year's. Lower profit margin in the first half was due to start-up expenses incurred in introduction of new products and it is expected that these products will contribute to substantially increased Christmas volume. Earnings for 1956 should approach 4.00 per share on,possible sales of 45 million. The conservative dividend pay-out ratio (1.00 was paid in 1955) will probably remain in force as Bell & Howell follows the growth company policy of reinvesti-ng -earning-s-i-n;..the -possible-that dividend may be augmented with stock from time to time as conditions warrant. 10 stock was paid in 1955. Bell & Howell's strong fundamental position is re-enforced by an outstanding-technical pattern. A long term base built up in the 12-28 range during 1947-1955 has an indication of 95. Currently, ability to penetrate 44 would indicate an intermediate term 65. There is strong support at 41-38. The stock is herewith added to our recommended list as a long term capital appreCiation vehicle. AWTamb W. TABELL WALSTON & CO.INC.

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Tabell’s Market Letter – September 21, 1956

Tabell’s Market Letter – September 21, 1956

Tabell's Market Letter - September 21, 1956 page 1
Tabell's Market Letter - September 21, 1956 page 2
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Walston &Co.———Inc. Members New YOl'k Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw,h.d.ndl OFFICES COASt TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET LEnER 21, 1956 After backing and filling, the market declined sharply in the,early part of this week and at the intra-week low of 482.86 was in the 490- 480 support area. The market's action made it unlikely that the sell signal given on July 18th with the averages at 513.39 will be reversed for some time. Hov/ever, at the week 1 s lows many issues on our recommended list were close to support and could be considered eligible for purchase. It is to be remembered that selectivity will continue as the key to future action, and purchase of recommended stocks at their support levels should work out well in the long run. THE CARBORUNDUM COMPANY Statistics Current Price Current Dividend Current Yield 42 1.60 3.8 Many investors are properly conscious of the growth potential inherent in atomic energy. Many fail to realize that future atomic expansion will in' a large part be . Long Term Debt Common Stock 7,964,826 1,717,711 shs. carried on by old established companies which have a long history in other fields of manufacture. Sales-1956-E Sales-1955 105,000,000 89,830,000 Earn.per Sh.1956-E Earn.per Sh.1955 4.25 3.01 Mkt.Range 1956-1951 45 1/8 – 21 5/8 Carborundum Company may well be such an organization. Carborundum has for many years been a leading factor in the production of abrasives which are,of course, a necessity for the finishing of industrial products. Of late, it has been producing zirconium, a metal widely used in atomic reactors for the AEC. It is felt that at current levels Carborundum Iis fairly priced as a maker of abrasives and that little allowance is made in the price for the growth potential inherent in zirconium and other new products. The stock is, therefore, recommended for purchase as a long term investment. Carborundum has been producing abrasives and abrasive grains since 1891 and, together with one competitor, it dominates the abrasives field. Virtually' every manufactured item in our economy requires abrasives at one stage or another of its production. This activity, which now constitutes by far the most important phase of Carborundum's business, has demonstrated moderate growth over the past few years at a rate somewhat faster than the FRB Index of Industrial Production. It should continue to expand at this rate in the future. Working with abrasives naturally involves high temperatures and Carborundum has been working since 1922 with zirconium, a metal which has an unusual ability to withstand extreme heat. As atomic energy was developed in the post-war period, it also became evident that in addition to its heat resistant properties, zirconium also had the property of re- pelling neutrons rather than absorbing them, thus making the metal ideal for the lining of atomic reactors. Carborundum, through its subsidiary, Carborundum Metals, was the first commercial company to supply zirconium sponge to the Atomic Energy Commission. It is currently producing zirconium spongeat a rate estimated between 300,000 and 350,000 pounds annually and under a recently announced program, was given a contract to produce additional sponge at the rate of 500,000 pounds annually. This contract, in addition, carries an option for an additional annual rate of 400,000 pounds and industry sources feel that it is almost certain that the option will be exercised. Carborundum would thus retain its position as the largest producer of the metal. This m'lrkc; Jetter IS not and under no clrcumstnnces is to be construed as, an offer to Jell or a soliCitatIOn to buy any securities referred to herein The contnllled herem 15 not ';uaranteed liS to accuracy or completene'!s and the thereof 1'1 not, and under no Circumstances 1'1 to he a Ion hy \VnbtOl & Co \VNan mterC\!l Inc AU cXllre;SHms of oplnJon are subJect to chanl'tc WIthout notice 'YIoalston & Co, Inc. or any OffIcer, Director or securltlcs mentioned herem ThiS market letter IS Intendeu and presented merdy as a J!encrnl, Informal t()C on 0 er uuy to creo. (Jay r nC\\1I and not as a complete analYSIS AdditIOnal mformatlOn With rC'Spect to any SCCUrltlC'S referred to herem Will be furtlished upon oJ -2- In order to exercise the contract, Carborundum is building a new plant at Parkersburg, Virginia, with a capacity of 1.5 million pounds annually, thus allowing room for even further expansion. Although other producers were involved in the AEC contract it is to be noted that Carborundum's established position in the field will probably give it a more favorable cost basis than its competitors. Anoth;r bright spot in Carborundum's future is found in Fiberfrax, a ceramic which has unusual insulating properties. It maintains all its propeties up to 2300 degrees Fahrenheit, well above the limits any other lnsulator including asbestos, and a furnace lined with it .. able to reach operating heat twice as fast as one lined with conven- brick. After overcoming some initial production difficulties Carborundum is now installing machinery for full production and over'a period of time this metal may be expected to add to the company's profit potential. Carborundum is excellently managed and financed. The president of the company, Clinton F. Robinson (Maj. Gen. USA Ret.) has a distinguished record as an administrator and engineer in both the U.S. Army Corps of Engineers and Infantry. A functional staff of specialists whose primary responsibilities are the development of policies and progress reports directly to him. Ownership of some 50 of the outstanding stock by various Mellon interests should insure adequate financing for expansion as needed. At current levels, Carborundum is selling at fourteen times 1955 depressed earnings of 3.01 and at ten times the 4.25 estimated for this year. Over the past six years, Carborundum has been able to average about 3.50 per share of annual earnings mostly from abrasives production, a figure amply covering the current dividend rate of 1.60 and coming close to justifying current prices for the stock. Over a period of time it appears that zirconium, and other new products, will expand earnings substantially and that the stock has merit at current levels for participation in this expansion. The long term technical objective is 75 and strong support is encountered just below current levels. The stock is, therefore, recommended for purchase in investment accounts. , AvIT;amb EDMUND W. TABELL WALSTON & CO. INC. J

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Tabell’s Market Letter – September 28, 1956

Tabell’s Market Letter – September 28, 1956

Tabell's Market Letter - September 28, 1956
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Walston &Co. – – – – – I n c . …;.. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE SwHmld I OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER September 28, 1956 Although my technical indicator is quite a way from registering a buy-signal, the market has reached an important downside objective at 170-167 in the Dow-Jones 65-Stock average. This is also a very strong support level. Because of the recent decline, many stocks in my recommended list would appear suitable for accumulation on further weakness and support levels should be scrutinized very closely to provide clues for possible buying opportunities. One effect of the recent decline has been that stocks of prime ty now available at appear particularly attractive and are reviewed below. They are being added to our recommended list which will be reviewed in its entirety in a future copy of this letter. ; AMERICAN CYANAMID (67) is one of the largest and most diversified of America's chemical companies. Over 25 of its sales are derived from drugs, which are produced by its wholly owned subsidiary, Lederle Laboratories. – Lederle is prominently identified with antibiotics and is one of the lead ing producers of this type of wonder drug. In addition to its basic chemi- cal sales and extensive drug position, Cyanamid has numerous other avenues of growth. Formica Company, a leading plastics maker was acquired in April and a new acrylic fiber is affording entrance to the textile field. 1956 earnings should reach 4.50 per share and the 3.00 dividend affords a better-than-4 The technical position of the stock has, for a long time, been one of the best of the major chemicals. Technical objectives are 88 and 140, with strong support afforded at 65-63. GENERAL ELECTRIC (56) has recently reacted to the strong support area just above 55-53 and at current levels this growth stock would appear to be suitable for purchase in investment accounts. Sales of heavy electrical equipment. should increase over the near and longer terms as the capital . -goods boom continues, and consume-Flf,HiS shoulaaiso cont-iriue s'trong profit margins aided by price increases. strong emphasis on research and dominant position in its industry assure continued good results for-the longer term. 1956 earnings should be in the neighborhood of 2060 2.75 per share vs. 2.31 last year. Technical objective is 70-80, followed-by possible higher levels, with strong support as mentioned above, at 55-53. Petroleum-rich GULF OIL (113) has sold off sharply from its 1956 high of 147 1/2, ostensibly due to Suez developments. Although middle-East difficulties certainly provide a question, there is little doubt but what the matter must eventually be settled and Gulf's interests protected. Since current share prices place a value of about 19 cents per barrel on Gulf's oil in the ground, the stock would appear farly priced in relation to its potentialities. In addition to its huge half-interest in Kuwait, Gulf owns considerable interests in the United States, Canada and Venezuela. At current prices the stock is close to a strong demand area and appears eminently eligible for purchase. Steel stocks have been among the leaders in recent markets and have, for the most part,held extremely well during the latest market decline. Current prices make most just -support level and the stocks appear to be fairly priced based on best available estimates of future steel demand. U. S. STEEL (65),the industry leader, would seem to have special attraction at current levels. The outlook for the near term is for increased volume at better margins which should make up strike losse and bring full year earnings to a figure which should compare well with the ,6.45 shown in 1955. The 2.60 quarterly dividend could well be liberal- ized in the near future. The stock recently broke out on the upside of a long erading range in the 52-62 area and the-upside potential of this base is 90-97. Strong support is evidenced at 64-62. AI'fT amb EDMUND W. 'I'ABELL WALSTON'& CO.INC. Thl'l market letter 18 not, and under no cIrcumstances 1'1 to he construed as, an offer to or a sollC.ltatlOn to buy allY secunhc'l ref('rled to herem. The mformatlon Lontamed hereIn IS not guaranteed as to accuracy or completeness and the furnu;bmg thereof HI not, and under nu circumstances to be construed no., a representntlOn by W,hton & Co Inc of opmlon are subJect to-change wlthuut notlCe. W,lston & Co., Inc, or any OffIcer, Dltector or Stockholder thereof. roa) have ,n mterest the securItIes mentlmeu herem. ThiS market letter mt(nded and presenter3 merely as a general, mfurmal commentary on day to day ne…. s and not a'l a cumplete an,iysls Additional mformatlOn …. itb respect to any securities referred to herein WIll be furnIshed upon req\lest. WN 3 1

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