Viewing Month: September 1957

Tabell’s Market Letter – September 06, 1957

Tabell’s Market Letter – September 06, 1957

Tabell's Market Letter - September 06, 1957
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NEW YORK , Walston &- Co. Inc. MembeTs New Y01'k Stock Exchange PHILADELPHIA' LOS ANGELES SAN FRANCISCO BASLE (Swit,.,l.ndl OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM , ADve-eprta. lSlteores Distilling Food Chains Dairy Farm Equip. Chemical Oils Office Equip. Steel ThIs markt't letter IS not. and under no circumstances IS to he constru,., as, an 0ffer t 0 BeII or a soIIc,o',r,iWlvou'11 k',ob '.\;;m'.'.V. sd',.1;tlt totll.lWflliltrcureedmas Tahreepirnefsoernmtaattiioonn c b ontained h Walston ere & iCnoI S not Inc All as to accurncy or completeness And the furnishing thereof IS of opinIOn afC subJect to change without notIce Walston 't!i.F.lfbt. ;'01 e. thereof' may d t d 'k t an mterest the securltles mentioned herem ThIS market letter 15 llltenJed and presented merei) as a general, mformal commentary on ay 0 aY'VNraOl news (lna not as a complete Ilnlllysls AddItIonal lllformatlOn with respect to tiny 5ecurlhes referred to herem WIll be furmshed upon request

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Tabell’s Market Letter – September 13, 1957

Tabell’s Market Letter – September 13, 1957

Tabell's Market Letter - September 13, 1957
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Walston &Co, Inc. Members New YOl'k Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swihl.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER September 13, 1957 The averages tested the August 27th lows on Wednesday and then staged a sharp recov y Wednesday's intra-day lows of 43.60 on Standard & Poor's 500-Stock Index and 467. 10 on Dow-Jones Industrials compare with August lows of 469.03 and 43.93. Friday's close was 44.80 and 481. 02. Selling pressure has apparently lifted enough to permit a further recov y to the 46 1/2-47 level on the S & P Index and 490 -500 on the Dow-Jones Industrials. Recent letters have stressed the probable changing leadership in the market durmg th remainder of the consolidating period which I expect will continue well into 1958 or early 1959. Groups showing the best relative strength action during recent weeks include food -pr-oducts, calf, baking ,'-fertlli'zer7'electroTIicsatitotnobile, retail chain, farm machmery, drugs and soft drinks. Most of groups, it will be noted, are in the consumer or consumer durable field. Some of the relative firmness can be as- cribed to the defensive nature of the industries involved but, on the other hand, many indi- vidual issues in these groups have built up fairly sizable base patterns over the past year or two. From a technical viewpoint, they could stage a good percentage advance. The food chain group, for example, contains quite a few stocks with interesting potentials. I consicle AMERICAN STORES ( 56 ) an attractive issue. Earnings for the 12 months ended March 31st totalled 5.92 and 6.25 is expected for the same period ending March 31st, 1958. The 2 annual dividend has been supplemented by a 5 stock dividend each year since 1953. Also attractive in this group are GRAND UNION CO. (351/8) and WINN-DIXIE STORES (25 / ) Another group showing excellent technical action the electronics lssues. This group has done little marketwise for almost three years, but the technical patterns gest that some of the electronics-TV issues could again assume a more important role during advancing phases. My outstanding favorite is ZENITH RADIO ( 121). The recent out-of-court settlement of the company's S1.lit against Radio Corp. of America will add o cash and an early expected decisicn by the FCC on subscription television systems could be of great mterest to Zemth. It's system is known under the trade name of Phonevision Competition ,has beenintense-in ihe-radio.and. televisionSield, but-in-a-.compacr-atively-bad… Year, Zenith may increase earnings to 14 a share in 1957 as against 12.55 reported tfor 1956. Other attractive issues in this group include MAGNAVOX (375/8) MOTOROLA (181/2) and RAYTHEON (221/8). I also believe the retail store group has interesting !profit potentialities. The group has been dormant for a long time but several individual ssues are showing good technical action. One of the more interesting issues is GIMBEL BROS. (271/4). The stock has held in the 24-31 range for two years. An eventual up- side penetmtion of this range would indicate a sizable percentage. In the meantime the wield is 5.9 and Gimbel is selling at only 7.3 times earnings based on the 3.75 earned or the 12 months ended July 31st. FEDERATED DEPT. STORES (303/4) also appears at- ractive. I have mentioned AMERICAN CAN (441/2) in recent letters and also like LILY ITULIP (64 ) for l,onger term holding. In the food group, my first choice would be GENERt IFOODS (471/2) which has been in a consolidating range for two years. In the automoblle ield, my choice continues to be CHRYSLER (761/4). In the farm equipment field, J. 1. CASE (17 1/2) is speculative but has a most interesting upside potential. — All outstanding situations are not in the favored groups. For example, the rails rave been showing extremely poor action, but I consider WESTERN PACIFIC (62 5/8) an Jutstanding buy (see August 30th letter). I would recommend switching any other rails -Tnhteo Western Pacific. AMER ICAN BRAKE SHOE (471/2) also conversion privilege on' the preferred stock expires on appears most attractive. the iulting pressure of conversion will end. GENERAL RAILWAY SIGNAL (283/4) also built up a sizable potential base as has YALE & TOWNE (3(j 1/8) and BELL & HOWELL I 45 1/2). Would use periods of strength to switch out of issues whose relative strength patterns pave been unfavorable over recent weeks and await periods of minor weakness to pur- ihase the issues mentioned above. t EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not ond under no circumstances 18 to he construed as, an offer to sell 'Of a sohCltatlon to buy any securlhes referred to herein s Idcontained her(lln 18 not g'unrantccd as to accuracy or completeness and the furnishing thereof is not, and under no to /hereof may b Walston & Co Inc All exprel!Slons of OPiniOn are subject to change without notice Walston & Co, Inc, or any ICCI', lrec r or C 0 el' d m'arket an Interest securities mentioned herem This market letter 18 Intended and presented mereh' as a generaj' mf0hal on day to aY'VN 301 neWS and not as a complete analYSIS Additional mformatlOn with respect to any securltlel! referred to herein Will be urms upon reQues .

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Tabell’s Market Letter – September 20, 1957

Tabell’s Market Letter – September 20, 1957

Tabell's Market Letter - September 20, 1957
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Walston &Co, —';;;Inc, – Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swawl..d) OFFICES TO COAST CONNEC.TEO BY DIRECT PRIVATe WIRE SYSTEM ,, TABELL'S MARKET LETTER September 20, 1957 Shorter term price declines usually consist of five phases, three declining period intersper sed with two advancing phases. The market, as measured by the avercges, now aI — pears to be in a third declining phase and fifth phase of the down move. ' Low Aug. 27th High Sept. 3rd Low Sept. 11th High Sept. 13 Low Sept. 20 – D. J. Industrials S & P 500-Stock 469.03 43.93 487.59 45.58 467.10 43.60 483.68 45.08 466.75 43.47 Whether the lows were reached on Friday is problematical but the lows will probably be 'in the or 43-42,range which has,been the supportpoinLon five September, 1955 with the exception of the Eisenhower heart attack lows of 433. 19 and 40.8 in October, 1955. For the past three weeks, this letter has tried to point up what appears to be an intermediate term change in the character of the stock market. We have tried to demons- trate that market leadership may be shifting from the capital expansion stocks, which hav been market leaders since 1953, to consumer goods equities, which have, for the most par done comparatively little either in the bull market of 1953-56 or in the consolidating mark 1 from 1956 to date. During this three-year period many consumer goods have built up rath r substantial potential bases, which, if penetrated on the upside, could point to considerably I higher levels. Based on the fundamental outlook, these higher prices might well be justifi c. Basically, the Ame rican economy depends mainly on the consume r. The machine J of the economy is geared, either directly or indirectly, to satisfy his wants. In order to satisfy the terrific expansion in demand which will occur. over the next decade, industry has, over the past five years, embarked on the greatest expansion in its history. Billions of dollars have been put into the capital goods needed to create increased productive capa- city. This has, of course, sharply improved the earnings of the capital goods producers, the makers of machinery and other capital items. Meanwhile, temporary excess capa- city consuIIler industries has cauped Rressure on Rrofit ma;gins and retarded any increase in earnings. This has, of been reflecteifin share prices.- From September 1953 to August 1956, Standard & Poor's Index of capital goods stocks advanced 141 while the consumer goods index advanced only 76. As the business boom grew apace, government authorities have taken steps, via tight money, to curb it. Some of the effects of these steps are beginning to be felt. Back- log of capital goods companies are, in many cases, down. Earnings are increasing at a lesser rate or hOlding, or decreasing mildly. Prospects for some capital producers stocks are, therefore, somewhat dimmed. They probably will not go much lower, but chances for sizable price appreciation appear not too favorable over the nearer term. What effect will all this have on companies producing or selling direct to the consumer The answer is – very little. Total personal income continues to reach to new highs each month. So do wage and salary receipts. Retail sales have continued to reach new highs. There appears to be little indication that the demand for consum er goods will not at least continue at current high levels and perhaps rise moderately. Meanwhile, as demand rises, excess capacity can be utilized. Heavy costs con- nected with large capital expenditures will, to a great extent, be ended. A perfect exam- ple is found in the retail trade industry where store chains have expanded sharply over the past few years. Heavy start-up expenses are already beginning to moderate in many c'ompanies. Thus, as sales continue-to improve, profits will also improve moderately. It is worthwhile to note that, as consumer incomes rise, a larger and larger portion is spent on so-called luxury items. Thus a very slight uptrend in consumer disposable income can be multiplied heavily in retail, appliance, auto and other consum er sales. Thus, improved profits seem likely in many cases, not 'only for 1957 but in 1958 and beyond. There is, in addition, ample evidence that the bright future has not already been discounted. Many consumer goods companies, due to their lack of growth over the past few years, are priced most reasonably in relation to earnings and are, in many cases, affording generous yields from well-covered dividends. Thus, in a mixed market, a large detree of downside protection is present. A number of consume r stocks suitable for purchase were mentioned in last .—— ——

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Tabell’s Market Letter – September 27, 1957

Tabell’s Market Letter – September 27, 1957

Tabell's Market Letter - September 27, 1957
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NEW YORK -W–a-lIsntoon.-&-reo. Members New York Stock Exchange PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swaml.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE wiRE SYSTEM TAiEllo'S MARKET LEnER September 27, 1957 In January, as is usual, I issued an annual forecast of the outlook for the to,, market in 1957. This was published in an article in the Commer cial & Financial C-.. nicle which said, in part, .. My graphs on the Dow-Jones Industrial Average indicate a rather wide potential on both sides of the market… Graphs of individual issues show a probable continuation of the diverse price movements that have been the pattern over a considerable period of time. The technical patterns of individual stocks are a combination of excellent, good, fair, neutral, mediocre, poor and un- favorable. Thesum these is an average that is meaninglesswhen applied to individual issues. This diversity is not new and it will most likely continue for the foreseeable future. In view of this probability, I envisage neither a sharp ad- vance nor a sharp decline, but rather a wide trading area in the Dow-Jones Indus- trial Average . My projection would be 530-430 with individual issues showing both above and below average price action. So far this prediction has proved valid. The high of the market, reached in July was 522.20. The recent decline failed to carry the rna rket much below the February low of 453.07. Wednesday's low was 452.19. Since then the market has rallied to reach a high of 462.40 on Friday, but closed at 456.89. So far, the February low has held, but another testing is to be expected. If the test fails, the average could decline to somewhere around 430. The reason for the market weakness has, of course, been uncertainty over the business picture. This uncertainty has, in turn, been caused by the Federal Reserve policy of credit restraint over the past two years. It must be remembered that credit manipulation normally takes some time to operate. Thus the full effect of tight money will not be felt until 1958. Conversely, even if the Fed were to ease money now, the effect would probably not be felt for at least a year. thisconnection–themain–obrective of the investor should be to purchase securities where values are sound and where earnings can continue to move ahead inithe face of a mild business decline. For the past month the letter has been proponing the theory that stocks of this nature can be found in the consumer goods category and that portfoliOS should be drastically revised in order to give heavier representation in this group. Among groups in the consume r goods field which have shown above average price action are the following, listed together with recommended stocks. Autos – (Chrysler) Baking Electronics-TV (Zenith, Magnavox, Motorola, Raytheon) Farnn Machinery – (J. 1. Case) Fertilizer Finance Food Chain – (American Stores, Grand Union, Winn-Dixie) Food Products – (General Foods) Glass Retail Chain – (Federated, Gimbel) – Soft Di'ink Tin Can – (American Can) Tobacco Utility Currently, portfolios should largely consist of stocks in the above mentioned groups, plus others recently added to our recommended list. Other especiaJly attract- ive stocks include American Brake Shoe, Western Pacific, Lily Tulip, Bell & Howell, Bristol Myers and Houdaille Ind. A portion of both investment and speculative port- folios might also be committed to bonds, both straight and selected convertibles, as these securities will be the first to benefit from any relaxation of the tight-money polj GJT Tl'llB market letter IS not, Ilnd under no circumstances IS to be construed ns, an olter to sell or W'i 5cffii\!E3'.E'rrld. to herem The mformation is not jfUaranteed as to accurac) or completeness and the furnlshmg thereOf IS not. nnd \uIJer no clrcurritianccs IS to'Se'construed as, a representn tloIl1hYV'tYJilslblSiilJCo, Inc All expressIOns of opinion are subject to change Without notW Ape ('tlIfIj Stockholders Ilnd Emp\oyf'cS thereof, purchase, R(.11 and may hnve lIl\ Interest m the securities mentioned het'em merely liS Il generlll, Informal eommentary on da)' to day market new.. und not as a complete analYSIS AdditIOnal Information \\lth respect to an)o seCUrities referred to hereIn v.1!I be fUllllshed upon re'lue't, \\x 301

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