Viewing Month: July 1957

Tabell’s Market Letter – July 05, 1957

Tabell’s Market Letter – July 05, 1957

Tabell's Market Letter - July 05, 1957
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r—————————————————————————– — — Walston &Co. Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw;t,,,I40d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER July 5, 1957 As was expected, my technical indicator reversed.the sell-signal on Monday and reaffirmed the primary buy-slgnal. 0ince that time the Standard and Poor 500-Stock index has advanced from a Monday close of 47.43 to 48.69 while the Dow-Jones Industrials have moved from 503.29 to 516.89. Technical factors at this point appear to indicate that the advance in the averages should carry to around the 1956 highs. At that point, probabilities will have to be re-examined in order to dis- cover the future course of the market. – ——-. – . Current Price Current Dividend Current Yield 59 3/4 58 It is an investment axiom that the best time to buy a company with an excellent long term future is when Funded Debt 7 Cum Pfd Stock Common Stock none 500,000 shrs. 5,443,377 shrs. the near term outlook appears the blackest. This axiom appears to apply perfectly to American Smelting and Refining. Earned per share 1956 Sales 1956 6.67 592,900,000 The world's largest custom smelter and refiner, American Smelting's fortunes are heavily committed to Market Range 1957-55 63 3/4-40 5/8 copper, lead and zinc. As every reader of the financial page knows, the prices of these metals have been under heavy pressure of late in world markets. For this reason, American Smelting's earnings will probably be down sharply this year, perhaps to around 4 per share vs 6.67 shown in 1956. This relatively unfavorable near term outlook, however, is probably the only reason the price of the stock, while it has held up well, has not been more dynamic, for the current price, seems to ignore the sharply improving earnings -owuh1tl.cono' karfeo–rsum19n5r8ariaznedd beyond. This outlook is based on a number of factors – -. -L (l)American Smelting holds a 57t stock interest in Southern Peru Copper Corp. This company is developing the Toquepala mine in Peru, and potentials of this mine stagger the imagination. Development costs are estimated at 200 million and the mine is expected to be in initial prod- uction by 1961 at a rate of 120,000 tons annually and possible eventual capacity of 300,000 tons. This would make it the largest copper producer in the world. (2)American Smelting is spending some 32 million on development of properties of Lake Asbestos of Quebec Ltd. This will give American Smelt- ing an important stake in the Asbestos field. Initial output is to be 100,000 tons of asbestos'annually with production commencing in mid-1958. (3)The company owns 52 of Mount Isa Mines Ltd. of Australia which is actively developing lead, zinc and copper properties. A five-year program is expected to triple output here by 1961. ' (4)As a background to the above, the long term outlook for the world copper price appears considerably better than does the shorter term out- look. Over the next five years world output is expected to increase 20. Wopld demand is expected to double over the same period. It seems hard to foresee continued declining prices against this background. As may be seen from the above, American Smelting's long-range future appears extremely bright. It is,- in addition-,fairlywell insulated against further near term copper price weakness by its large commitment to custom smelting which is less affected by price levels than operations. Other plus items in the picture include a favorable balance sheet position and heavy investments in other companies, including 35 of Revere Copper, 34 of General Cable, 14 of Cerro de Pasco and hold- ings of Kennecott and United Park City Mines. Technical extremely good with a long range potential of 90-110 and support just under the current market. An ample yield is afforded on the 3 dividend and the stock is recommended for purchase in growth accounts. AViT/wgs EDMUliD W. TABELL vlAlSTON AND CO. nc.

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Tabell’s Market Letter – July 12, 1957

Tabell’s Market Letter – July 12, 1957

Tabell's Market Letter - July 12, 1957
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NEW YORK Wdlston &Co. – – – – – I n c . – Members New Y01'k Stock Exchange PHILADELPHIA' LOS ANGELES SAN FRANCISCO BASLE (Sw,he,ld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER July 12, 1957 The stock market reached new hlghs for the move during the past week with the Stan ard & Poor 500-Stock Index at a closmg high of 49. 0'8as against a 1956 high of 49.74. Dov Jones Industrials reached an intra-day high of 522. 20 as compared with the 1956 high of 524.37. It has been my opinion for some time that the various industrial and combined av ages would test the 1956 highs some time during the Summer and probably exceed them by a small percentage. It appears probable that these objectives will be reached shortly. Despite the sharp advance of the past two weeks, my technical indicator has not reached overbought territory. Market action must be watched closely over the next several weeks forJ!te possilJiJity thatthe advance may carrye\CenJurtherabove highs than originally anticipated. ';t -, \ Statlstics One of the most persuasive reasons for the pur- Current Price 115 chase of common stocks is as a hedge against Current Dividend 3.50 long term inflation. In this connection, among the Current Yield 3.0 best inflation hedges are stocks of companies Funded Debt none who control sizeable natural resources. This Common Stock 2,791,142 shs. approach, however, presents many difficulties Earned Per Sh. -1956 6.12 for the investor. Mining and oil stocks are among Mkt. Range 1957 -56 1301/2-887/8 the most difficult of analysis and many promisin! equities must be analyzed as much in geological as in financial terms. Thus, the average investor, and even the trained security analyst, experiences a good deal of difficulty in selecting promising oil and mining equities. For the above reasons, one of the best approaches to the purchase. of natural re- sources could well be the purchase of Newmont Mining Corp. Newmont is a holding com- pany which has long enjoyed a top reputation in locating and developing large mining ven- oftures. Its current net assets are conservatively valued argund 320rnillion .. Iioldmgs number fisted plus for which there is no market, which Newmont owns entirely or jointly with others. Newmont continues to maintain an active managerial interest in many of its holdings and continues to search the world for promlsing properties in which it can assist in developing. Current net asset value is approximately the same as the current market price of 115.00 per share, but this in- cludes a large number of closely held securities whlch are carried on the balance sheet at falr value, a figure which in many cases may be ridiculously low. Perhaps the best guide to Newmont's ability to develop new ventures is furnished by its past record. The company's dividend income in 1956 was 6.12 per common share vs. 1. 14 in 1947. Investments and advan(!es are now carried on the books at a cost of 67,450,000 vs. a current market or fair value of 310,916,000. It is eVldent from this record that Newmont's investment acumen and ability to develop new products has been of the highest. It would take much more space than is available here to fully des- cribe all of Newmont's holdings. The largest single holding consists of more than a million shares of Continental Oil Co. ,one of the most promising of America's integra- ted oil companies. The next largest holding is 575,000 shs. of O'okiep Copper, one of the largest South African copper producers. 259,000 shs. of Magma Copper are also as are some 4.3 million shs. Sherritt Gordon, the fast growing Canadian nickel pro- ducer. Newmont also shares in a number of ventures for-wliiCh there is no listed or un- isted market. Largest commitment among these is the wholly-owned subsidiary, Newmont Oil Co. which is engaged in extensive exploration of Louisiana and California off shore !oil lands. Newmont also owns 10 of Southern Peru Copper, mentioned in last week's on American Smelting & Refining Co. Numerous interests in other mining and oil IProperties are held all over the world. Net dividend income in 1956 amounted to 6.12 a share. While, due to the large commitment to copper producers,net will probably be off in 1957 ,it should cover the 3.50 annual Newmont dividend. 5 stock was also paid by Newmont in 1956. The stock .s recommended for purchase by investors seeking long term growth in the mining and oil fields. The technical pattern of the stock is pood. There; ,(T ' . ats,Q!Jc1iatl.l2n to buy any securItles referrea to herelll The mformahon ro hbyavWe aanlstIonnte&reCstoin. Inc the All c,,prlffiSlOn'st'ooaf'to!'Ptditnttion are BubJect. W Itfo1;Schangc WIthout notice SecUrltle1 m(!ntioned herem Th1!1 market letter IS mtendcd and Wa ,stOll PI c'ellted C0, Inc., no 0 meleb 1,8 D go cIrcumstances IS to be con'ltrucd as, Dr..tetphreerseeonmft,aarmtikonenyt WN 301 INC .nC\\,S not DB tl complete onolYllls Additional informatIOn \\,ith respect to any secUrities referred to hercln r'giueto. .-'

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Tabell’s Market Letter – July 19, 1957

Tabell’s Market Letter – July 19, 1957

Tabell's Market Letter - July 19, 1957
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,…..10N rrtof. iLe,la,J1a1.;1J' dT ;-, U.Wi Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw;t,IdJ OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER July 19, 1957 The market failed to penetrate the 1956 highs and appears to be consolidating in order to try again. Last week's high was 49.13 on the Standard & Poor 500-Stock Index as compared with a 1956 high closing of 49.74 while the Dow-Jones industrials reached an intra-day high of 522.91 as compared with the 1956 top of 524.37. The market conti- nues to act well and, from a technical viewpoint, refuses to become overbought. Each time an overbought condition is about to be reached, the market quiets down and consoli- dates as it is doing now. As long as this type action continues, the market is not subject to more than the usual technical corrections. of-cwhetheI',or -notthe-averages reach new high-territory, individual,issues undoubtedly will. Below is a review of my Recommended List with technical com- ments. I have taken American Can from the Income List and added it below and have re- moved Kennecott to the Income List. I have dropped Minerals & Chemical and National Distillers from the list below to make room for recent additions. Present Price Price Recomm. Advice Allegheny Ludlum 53 16 Buy on dips. Support at 53-49. Arne rada 136 – 103 Buy on moderate dIpS. Very strong pattern. American Can 44 – 44 Buy-Hold. Very constructive pat. for lit. American Cyanamid 45 -.. 33 Hold for obJective of 53. American Smelting 59 57 Buy-Hold. Very strong pattern. Support 57-55. Bell & Howell 46 ..,… 42 Buy-Hold. Excellent long term pattern. British Petroleum 21- 21 Buy-Hold for long term appreciation. Carborundum Carrier Champlin Oil 48 55 27 41 59 24 Buy-Hold. Support at 46-44. Buy-Hold. Stock is at strong support level. Buy-Hold. Support at 26. Chrysler Consol. Copperweld Steel Crucible Steel 79 – 3832 75 Buy-Hold. Short term 90. Long term 110. 30 ., Buy-Hold. ,In,.broad.ac,cl.lIl'lulationar,ea. 31 Buy-Hold for intermedIate and long term. 29 Buy-Hold. Good support at 32-30. ', Eagle Picher 39 Eastern Airlines 40 Fansteel Met. 63 Food MaChinery 63 Gen'l Rwy Signal 33 Gulf Oil 147 Hewitt Robins Houdaille Ind. -36 21 Ingersoll-Rand 82 lnternational Nickel 100 Joy Manufacturing 69 Magma Copper 73 Martin Co. 33 -' Newmont Mining 113 North. Nat. Gas 55 Northern Pacific 47 Pan-Amero Worla 16' Panhandle East. 51 Penn-Dixie Cement 34 Pittston Co. 77 Royal McBee 37 Sperry Rand Sunray Mid-Cont. Sylvania Elec. Tennessee Corp. Timken Roller B 26 28 …. 42 48 50 .. Tungsol Elec. United Airlines U. S. Steel 32 -30 70 22 47 44 51 19 107 25 18 80 90 23 75 38 110 47 39 46 38 45 31 24 25 49 50 45 35 39 65 Buy-Hold. In strong support zone. Hold for long term appreciation. Hold for long term 85-90. Buy-Hold for intermediate and long term. Buy-Hold. Inter. term 40. Near support. Hold for 165-175. Buy-Hold. At good support level. Buy-Hold. Excellent long term pattern. Buy-Hold. Excellent long term pattern. Buy-Hold. Strong support at 100-95. Buy on dips. Support at 65-60. Very interesting long term potential. Hold for rally to 36-39 area. Buy-Hold for intermediate and long term. Buy-Hold. Support at 53-51. Buy-Hold for 70-75. Hold for long term appreciation Buy-Hold. Very strong pattern. Hold for long termappreciation. Hold for 90-95. Buy-Hold. Support at 37-35. Excellent long term pattern. Hold for 34 obJective May be slow but long term pattern good. Buy-Hold. In good support area. Buy-Hold for intermediate and long term. Excellent long term potential. Hold for long term appreciation. Buy-Hold. Support at 68-65. . .' VV.M.L;iTU1' &. cu. ll'l

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Tabell’s Market Letter – July 26, 1957

Tabell’s Market Letter – July 26, 1957

Tabell's Market Letter - July 26, 1957
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Walston &- Co. Inc,—- Membe1'S New YQ'k Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BA5LE (5w,t…ld OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE. WIRE SYSTEM TABELL'S MARKET LEnER July 26, 1957 There is evidently still quite a supply of stock at the 1956 highs, despite the fact that these levels were reached fifteen and eleven months ago. Probably some further consolidation is needed before another attempt is made. However, the market does not appear vulnerable to more than a normal retracement of less than two-thirds of the ad- vance from the June lows. If this occurs, the Standard & Poor 500-Stock Index should hold above 47.50 (Friday's close 48.45) and the Dow-J ones Industrials should hold above 502 (Friday's close 514.59). However, as continually noted in this letter, the action of individual issues is mu-ch-moreimportant than-the long term holding AMERICAN BRAKE SHOE CO. (53) The common stock appears to be an attractive situation for all types of inves- tors. On the anticipated dividend of 2.40 regular and extra, the yield is over 5 1/2 and it is possible that a slightly higher extra might be paid at the yearend. Earnings for 1956 were 6.64 'per common share based on the 1,295,948 shares then outstanding. However, the company has an issue of 4.00 Cumulative Convertible Preferred which is convertible into common at a rate of 40. 15 per common share. The conversion privi- lege expires on September 30th of this year and, as the common is selling well above the conversion price, it is expected that the entire issue will be converted. This would mcrease the common stock outstanding to 1,611, 927 shares, plus 20,400,000 in Funded Debt. Adjusting per share earnings to reflect full conversion of the preferred would re- sult m 6.00 per share earnings in 1956 on sales of 186 million, a new high. For 1957, sales volume could reach 200 million and, allowing for an increase in the pre-tax profit margin to 11 as compared with 10.3 in 1956 might result in earnings of about 6.55 per share in 1957, after allowing for full conversion. Thus the stock is selling at nine times 1956 earnings and at slightly over eight times anticipated 1957 earnings. Conver- preferred is expected to remove-cons-iderable-ma-rket-pressure-f-rom the common. American Brake Shoe has been an important manufacturer of railway parts and equipment for the past half century but, unlike most railway equipment companies, has consistently operated at a profit. The only exception was in 1932. Dividends have been paid in every year since the company's founding in 1902. Until recently, railroad parts constituted the company's only product line. Although it is still important in this field, cent years have seen a concerted effort at diversification on the part of managem ent, and today rail equipment accounts for only 40 of total sales. The most important items are brake shoes,journal bearings and cast steel and cast iron wheels for rolling stock. It will be noted that these items continually require replacement and their sales are largely de- termined by railroad revenue ton miles rather than railroad capital expenditures and the are less subject to wide cyclical fluctuations than are sales of manufacturers who prU'UUICtl primarily capital equipment. In addition to sales to railroads, sales to the machinery, auto motive and farm equipment industries constitute the major part of current output. The company has an active research program and a number of new products coming out of the metallurgical laboratories have an interesting future growth potential. Typical of these are manganese steel castings which are used where high stress and impact resistance is requirEEd. other and high temperature ar,e produced and a large part of future expansion will be devoted to the specialty ca,sting field. Sales have shown a generally rising trend from 1947 to date and have risen in the .last three years as products outside the rail line became important. Much more im portant,however, is that profit margins have risen steadily since 1947 with the exception of a slight drop in 1954. 1956 before -tax'margin of 10.3 is the highest in recent years outside the Korean war bulge. Technical pattern is very strong. After reaching high of 58 in 1946, stock declined to 31 and held in the 31-45 range for ten years until it broke out on the upside in 1956. Thi suggests, from a technical viewpoint, a long reaccumulation area and an upside potential considerably higher over longer term. Further expansion into lines .,.. –

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