Viewing Month: June 1957

Tabell’s Market Letter – June 07, 1957

Tabell’s Market Letter – June 07, 1957

Tabell's Market Letter - June 07, 1957
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— –.-r—- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – , Walston &Co. Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swaml.ndl OffiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 7, 1957 The technical correction of early this week held well above the late May lows, and the advance was resumed on Thursday and Friday. My technical gauge is well below overbought territory and it would require quite a sharp advance for the market to become technically vulnerable in the near future. Meanwhile, as the advance resumes, it is well to examine the internal character of the market. The Standard & Poor 500-Stock Index reached its on February 12, 1956 and since then has advanced rather steadily. The ad- vance from 43.04 on February 13, 1956, the day after the low, to 47.37 last Wednesday, had an amplitude of 10.1. As has been pOinted out often, however, it is impossible to purchase an averaIgte-,haasnbde, as en i the results of many portncreasingl'Y-dffflcan'-t'o select a list of stocks which would perform as well as the average. This is shown by a tabulation of the action of 62 Standard & Poor group indices in the period February 13 to June 5, 1956. During this period, when the advanced about 10, only 16 of the 62 group indices (about 1 in 4) performed as well as or better than the market. Indeed, no less than ten of the group indices were lower on June 5th than they were in the depths of the February decline. This only serves to underscore the fact that the market remains most selective, and that careful analysis is necessary in order to pick stocks that will act well even in an advancing market. In- most cases, companies showing the best performance exhibited sound funda- mentals and good technical patterns. New investments at this time should be confined to companies which show the same characteristics. A complete list of the percentage of advance or decline since Feb- ruary, 1956 in each of the 62 group indices follows Group Drugs Publishing 011 Advance or Decline 24.4 23.7 22.6 Electrical Equip. 22.1 Office Equipment 21.4 Electronics 20.8 Gold Aluminium 17.5 13.8 Metal Fabricating 13.8 Motion Picture Tires 13.7 12.0 Finance 11.6 Radio-TV Mfgrs. 11.4 Natural Gas Pipelines Chemical 11.3 10.3 500 STOCK COMP. 10.1 Steel Alloy Liquor' 9.7 9.6 Radio-TV Broadcasting Auto Parts Rayon Beer 9.4 8.9 8.4 8.3 Soft Drinks- — — .- 8.0 Steel Fertilizer Railroad Equipment 7.5 7.3 7.0 Confectionery Mining & Smelting 6.7 6.5 Printing 6.0 Electric utilities 5.5 — Group Advance or Decline Metal & Glass Cont. 5.4 Natural Gas Dist. . 5.4 Auto – .p-55;.'1i Sulphur 5.0 Textile Weavers 4.8 Paper Containers 4.2 Soap 4.2 Retail stores 4.0 Food 3.1 Copper 2.9 Rugs ' 2.7 Textile Apparel 2.7 Shoe 2.4 Telephone 2.4 Agricultural Machinery 2.2 Cigars 2.2 Sugar 2.1 Railroads 1.7 Paper 1.2 Coal – 1.0 Machine Tools . – 0.2 Shipbuilding – 0.4 –S-hCitpgpairnetgtes .– 0.6 – 01' c – Vegetable Oil 2.3 Hard Sur.Floor Cover.– 2.4 Auto Trucks .- 2.6 Aircraft Mfg. – 4.8 Air Transport – 7.8 Lead & Zinc – 12.1 AWTamb EDMUND W. TABELL WALSTON & CO. INC This market letter IS not. and under no Circumstances IS to he construed a8, an offer to Bell or a sohcltation to buy any securities contmnCtl herem IS not guaranteed as to aCcuracy or completeness and the furnlshmg thereof IS not, and under no totve to terdlfl The may by nll.ton & Co Inc All expressIOns of OPIniOn are subject to change without nohce Walston & Co. Inc, or any 0 cer, Irec r or 0 er er . k t have nn mterest the SecUrities mentIOned herem This market letter IS mtended and presented merely as a general, mformal on day to daYv..rr;/SOl news and not as a complete analysIs Additional mformntlOn with respect to any S!!eurltles referred to herem wlil be furnished upon reques

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Tabell’s Market Letter – June 14, 1957

Tabell’s Market Letter – June 14, 1957

Tabell's Market Letter - June 14, 1957
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Walston &Co. Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swawlaod) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER June 14, 1957 After the sharp one-day correction on Monday, which held well above the late May lows, the market rebounded to reach the highest level since the 1956 highs. 1956 High – Feb.12th Low – Friday's High Standard & Poor's 500-Stock Index 49.74 Dow-Jones Industrials 524.37 Cloiing prices. 42.39 453.07 48.15 511.79 Despite the sharp five-month advance, my technical indicator, which signalled a buy on February 13th, has not yet entered overbought territory. Thi-s a-necessary-,,-prelim'inary before a It- ap- – pears that an advance to or above the 1956 highs is required before the market becomes technically vulnerable. It is also possible to receive a sell signal by a loss of upside momentum but, at the moment, that appears unlik surpa ely. ss the I 1 still 956 hi believe ghs dur that ing th the mark e summer et will months , p robably followed r ebaychcoonrtinmuoadteiorantelJ of the fourteen-month trading range in which it has held since April, 1956. It must be borne in mind, however, that the base already formed during the past fourteen months has a much higher potental if a really decisive upside breakout-occurs. There s a potential 55-59 on the Standard & Poor's Index and 580-620 on the Dow-Jones Industrials, if the area already formed turns out to be an accumulation base. It would seem more logical to ex- pect a further broadening of the base followed by a decisive upside break- out in 1958, but the possibility of a more immediate move cannot be ruled out. The technical action of the market, when, as and if the 1956 highs are reached, must be watched closely at that time in order to evaluate the probabilities of a further extension of the advance. Both the Aircrafts and Airlines are showing below average relative strength and there are no indications of an upward move of importance. Aluminum issues appear to be in need of further consolidation, but are in a buying range on moderate weakness for long term holding. The Automobile group- has diverse -patt-erns-.Chrysler (78-) has 'a-very inte-r-esting upside 'potential. It appears to be the most interesting stock in the group. The Automobile Equipment group has some very interesting patterns. My favorite is Timken Roller Bearing (53). The Building group is in the very early stages and there is no need to hurry purchases. Chem-icals appear to need more time to base patterns, but are buys on moderate weakness. American Cyanamid (83) has been my favorite in the group and it still indicates higher levels. The Coppers need more time to form broad bases, but a moderate short term rally is possible. I like Kennecott (115) and Magma Copper (77). The,Drugs have been of the better acting groups and still indicate higher levels. Bristol-Myers (53) has had a sharp advance since my original recommendation at 33, but it still indicates higher levels over the longer term. The Machinery group has diverse pat- terns, but several issues have possibilities. Joy Mfg. (73) has a potential of 88-87. Ingersoll-Rand (83) also has a constructive technical pattern. American Smelting (62) in the Metal group has a muct higher long term Ite-Office Equipment group has had a sharp advance and some issues have reached their first upside objectives, but Royal McBee (39) still has a nearer term objective of 48 and higher for the longer term. The Oils have been the best acting group in the advance, but still indicate higher levels. The producers have excellent patterns. Amerada- (-l39)-has a -nearer term ahd Ohio Oil appears – , to be forming an excellent accumulation base. The international oils may need a period but higher levels are indicated over the longer term. Champlin Oil (30) appears attractive in the domestic oils as do others in the group. The Paper stocks need a further accumulation period. Railroad Equipment issues have good patterns with General Rwy Signal (32) my There are no signs of immediate action in Retail Store group. The Shipbuilding and Shipping Line groups have very favorable long term patterns.Steels alSO have very strong long term patterns.For near term,AlleghenY(59) appears attractive at current levels.Rails show signs of improving action and select issues could move higher.I like Northern Pac. (47),Western Pac. (59) (and Great Northern (43).Rail average could reach 158-162 level on this move. c …d under no circumstances I' to he construed as, an offer to sell or bCltUhnoto buy any IS not guaranteed as to accuracy or completeness and the furnishlnp; thereof I b)' W81'ton & Co. Inc All exprC'SlOns of opInion arc subJect to change Wal hnoevwesalnindInntoert eusst amctohmepsleectue raintiaelYs SmIsentAIOddnietdiohnearleiinnfoTrhmiSatmioanrwkeitthlertetespr eIcSt mtoteanny sefciunritpiersesree errc 0 crCnR1in'1t'.'W;'IiN bee'1lu)rlI or Stockhol'der thereof may on day to daY rrarket srequest WN 301

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Tabell’s Market Letter – June 21, 1957

Tabell’s Market Letter – June 21, 1957

Tabell's Market Letter - June 21, 1957
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— .Walston &- Co. Inc.— Members New York Stock Exc!uLnge NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (SwH,.dMd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 21, 1957 After reaching new high territory for the move on Monday at 48.24 on – the Standard & Poor's 500-Stock Index (516.81 intra-day on Dow-Jones Indus- trials ), the market declined for the balance of the week. In fact,declines outnumbered advances on each five days of the week despite the fact that – the averages closed higher' on Monday. This is the first time since the ad- vance started on February 13th that my breadth-of-the-market studies have shown an unfavorable trend. My technical indicator has not yet signalled a sell but could do so shortly unless the market holds or rallies over the next This signal,if it is given, would be a loss of momentum or se- condary type signal rather than a primary type signal resulting from an overbought or oversold condition. Secondary signals are sometimes quickly reversed while primary signals usually require a greater length of time. The last buy signal given on February 13th at 43.04 on the Standard & Poor 500-Stock Index (453.07 on Dow-Jones Industrials) was a primary type signal resulting from an oversold If a sell signal is given,it might result in a one-third tor one-half correction of the advance from the February lows. This would mean a possible decline to 46.50 – 45.64 in the Standard & Poor Index (495-485 on Dow-Jones Industrials). Friday's close was 47.15 on the Standard & Poor Index (500.00 on the Dow-Jones Indus- trials). Such a correction would not have a great effect on individual isaues with strong technical patterns. Some of the issues on our recom- mended list are reviewed below. ALLEGHENY LUDLUM (58 ) originally recommended at 16 early in 1954, has been in a long trading shelf between 65 and 53 for almost nine months and appears to be under slow re-accumulation. Earnings for the first quar- ter were 1.25 per share vs. 1.23 in 1956, but second quarter results may be below last year's 1.21 per-share. However, for the full 1957 period, would expect a possible 4.50 – 4.75 as against 4.04 in 1956. Earnings from Allegheny Ludlum's 50 interest in Titanium Corp.(jointly owned with National Lead) should be about equal to 1.50 a share on Allegheny Ludlum. 1958 results in both divisions should be much better. Continue to recommend Allegheny Ludlum for long term growth holding and believe that the eventual emergence from the present trading area will be on the upside. BRISTOL-MYERS(57 ) entered our recommended list just about a year ago when it was selling in the 33-31 range. The stock has already reached its initial objective of 50-55 and has moved ahead to today's high of 58. The longer term objective is 85. The announcement that the subsidiary, Bristol Laboratories, had been granted a patent on Tetrex, an improved and more potent form of tetracycline, an antibiotic, has been partially responsible for the price advance but improved sales on Bufferin and Ban have also helped. 1957 earnings could be 4.25 vs. 3.55 in 1956. GENERAL RAILWAY SIGNAL (31 ) was originally recommended in September 1955 at a price level corresponding to 19 on the present stock. GRS has held in the 27-35 range for the past six months and appears to be in a re- accumulation phase with an eventual upside breakout. Earnings for 1957 should reach 4.00 as against 3.10 in 1956. Growth elements in this situation include electronics as well as increasing railroad spending on modernization. HOUDAILLE INDUSTRIES (22 ) became part of my recommended list on March 29 of this year when the stock was selling at 18. The stock has an exceedingly interesting technical pattern. The upside breakout of the long 12-16 range indicates, from a technical viewpoint, an initial potential of. 33 followed by a higher potential over the longer term. Earnings for the first quarter were 231 per share vs. 31i in the like 1956 period, but four months earnings caught up with the 195b figure. Earnings for the first half are expected to show a good increase. There are several issues that I have been watching for possible inclusion in my recommended list in the event of weakness in the general market. Some of these are listed below Stock Friday's Close Buying Level American Smelting Chrysler Corp 59 57-55 76 75-73 31 . 3132 . ed.ii TJ.\JJU\I ffw!aSaJIuClo3oGA1esC nc J.!l underans otociarcccuumrsatctylnocrescaISmtpo,beteeness ij,apresslons of opinion I1re subJect to mentIOned herem ThIS market ttt13e AddltIonli1 lllformatlon o.ffhf UfnlS to ts ellreoarf a 1; no . 0 – '8'iQ t Stockholder thereof may notice Walston & COl' Inc, or anYn on day to day -i'i;'.B mtended and presented mere y as a et to any secuntleo; referred to hereIn wIll be . t eques WN 301 —

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Tabell’s Market Letter – June 28, 1957

Tabell’s Market Letter – June 28, 1957

Tabell's Market Letter - June 28, 1957 page 1
Tabell's Market Letter - June 28, 1957 page 2
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—- Walston &Co. Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw;hed.,d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER June 28, 1957 Market action has followed a normal technical pattern. The five day correction from the June 17th high retraced over a third of the entire advance from the February lows and the market now appears to be in a position to resume the traditional summer rally usually experienced in July and August. My technical indicator which gave a secondary sell signal is new-in a position to reverse itself and re-affirm the primary buy sig- nal giveR- near the February lows. Seten stocks were mentioned in last weeks at prices telow the then mar- ket. Six reached suggested buying levels and are now part of my recommend- ed list. They will be reviewed in this letter shortly. Stock Buying level Fridays close American Smelting 57 57 5/8 Chrysler Corp. 75 76 1/2 Consolidated Electronics 31-30 30 Ingersol Rand 80 80 7/8 Newmont Mining 110 110 1/4 Tung Sol Electric 35 34 5/8 BELL AND HOvlELL Statistics How many pictures have'You taken Current Price 40 1/4 lately If you are a typical Amer- Current Dividend 1.00 ican family, you've probably taken Current Yield 2.5 quite a few. You've got more spare money and more spare time than ever Long term debt 7,400,000 before. Besides this you've prob- Pfd Stock(lOO par) 37,243 ably recently had a new child Common Stock 634,340 grandchild. All these things– higher purchasing power, more leisure Sales 1956 45,579,000 time and a high birth rate–have Earned per share 1956 3.84 combined to make the photographic industry one of the fastest growing Market range 1957-55 50 7/8-28 1/4 industries in the United States. Including 4 million 4 3/4 There is no reason not to suppose that this trend will cont- subordinated notes convertible inue, and, as a participation in into common stock at 46 this growth, the common stock of Bell and Howell continues to be On 534,340 shares outstanding at end of period. one of our favorite media. The sales of this important manufacturer of home motion picture cameras have conSistently grown at a rate faster than the industry average. Despite this fact, the stock is priced at 10-11 times anticipated 1957 earnings, making full allowance for the uilution recently caused by sale of 100,000 new common shares. Bell and Howell has long enjoyed a reputation as the Tiffany of movie cameras and its high-priced line of precision equipment has en- joyed an excellent reputation. Recent sales efforts, however, have been directed toward lower-priced, easy-to-operate cameras aimed at the novice market. Band H cameras now sell for as little as 39.95. A comprehen- sive research program has enabled the company to develop new cameras and products which would appeal to the vast legions of new photographers. Typical of these new products was the l6mm Electric Eye movie camera, introduced last Christmas and hailed as the most important advance in movie photography in a generation. With this revolutionary new device, all the photographer has to do is aim his camera, and press the button. A photo-electric cell mounted within the camera makes all the necessary adjustments of lens aperture depending on, light conditions. Undoubtedly future cameras, in a wide variety of sizes and price ranges will incorporate this principle, but Bell and Howell's leadership in the field will give it important competitive advantage. In addition to its amateur line, Bell and Howell also manufactures numerous other products which appear to have a significant growth pot- ential. It is the country's largest manufacturer of sound projectors t h theThis murket letter IS not, Ilnt! under no Circumstances 1'1 tolhe constrUrths, n 0if r t 0 coot-mned herem IS jh h Iby Wal'lon & Co, not Inc J.Cunrnntecd DS to a All expresSIOns of c curmncoyn or corn etencssn e II cOorc nIS snoolit&C.intCantorIlOunInndtcoerbonuroy uny any securlhes irsetfoerbreecdotnosthruereedmas,'Tnhreepmrefosernmtnathioonn Offlccr DJrector or Stockholder thereof, may e,cntcd merely liS gcnernl. commentnry on day to hIICaVv.cS uanndmnteortcasHt aIncuthmepsiccetucraltnlCal'Yl SIS. A Itlonearlmn,orma,mIOanrWI ereespect to any sccurltleS referred to herem \\111 he fUlnished upon request '—- -2- for schools, and sales of this line should continue to rise sharply as new schools are built and the trend toward audio-visual education continues. The company also supplies equipment to the armed services, in- cluding photographic equipment used in the guided missle program. Another highly significant product appears to be microfilm and re- lated machines which are distributed through Burroughs Corporation. Sales here should benefit from the trend toward office automation. Meanwhile expenditures on research continue, enabling Bell and Howell to maintain its leadership, not only in movie cameras but in all its other fields of endeavor. Significant in the research program is a recent licensing with Haloid Corp. involving the xerography or dry photography' process. This process for fast reproduction of photographic images is expected to have application in many fields. In order to finance sharply expanding sales, Bell and Howell recently found it necessary to sell 100,000 shares of new common stock, together with a privately placed 4 million convertible note. This, of course, will mask a large part of any gain in 1957 net. It is possible however that 1957 per-share earnings will come close to equalling last year's 3.84. This would mean a rise in net after taxes to 2.4 million versus 2.0 million in 1956. to be accomplished on A the sli5g0hmt iglaliionninsaplerso fit be margins would ing projected en for able this this year. First half earnings are expected to be lower than last year, but this means very little due to the company's policy of writing off development costs as incurred, while sales of new products do usually not show up until the second half. The conservative 1.00 dividend rate will probably be main- tained as Bell and Howell follows the growth company policy of financing as much expansion as possible through retained earnings. There is still another possible futUre development which, although now uncertain, could measurably alter the Bell and Howell picture. Acc- ording to the recent prospectus, the company is considering submitting a bid for the stock of General Aniline and Film Corp., now held by the Alien Property Custodian. This acquisition would undoubtedly require a good deal of additional financing. It would, however, give Band H an entry into the highly profitable film and expendable item business Which would complement Bell and Howell's sales and give it major stature in the photographic industry. Bell and Howell's favorable fundamental outlook in re-inforced by a favorable technical pattern with a long term objective of 90. Support is encountered just under current levels. The stock is recommended for pur- chasing growth accounts. AWT/wgs EDMUND W. TABELL WALSTON AND CO. INC.

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