Viewing Year: 1958

Tabell’s Market Letter – January 03, 1958

Tabell’s Market Letter – January 03, 1958

Tabell's Market Letter - January 03, 1958
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Walston &Co.——–Inc. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE SwHmld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER January 3, 1958 After absorbing a large amount of tax loss selling on Monday and Tuesday, the mark moved higher for the balance of the week. An intra-day high of446.08 was reached on the wJones Industrials and 41.02 on the Standard & Poor's 500-Stock Index. In my December 6th letter, I tabulated the effect of tax loss selling on December m kets going back to 1935. To quote Several interesting conclusions can be drawn from thE above figures. (1) There has been a year-end rally in each year even though it has been ver small and of only a few days duration in many instances.' (2) If the market has been higher for most of the year, the Dec. low is usually reached early in the month. The reverse is usu y true if tr'eqd down ..(3) faps t an the Decen er lows are broken in the fi.rst 3 months of the year, the trend is usually either down for the yE r or there is sharp decline sometime during the year. In relation to the present market, it is probable that the lows for December will be reached late in the month. It will then be impor nt to watch the action of the market on the year-end rally. If the Dec.lows hold through the ea 1 months of 1958, the action would be constructive. A decline below the Dec low early in the n t year would indicate a lower or sidewise market for 1958. The December lows were reached on December 23rd at 423.86 on the Dow-Jones In s- trial averages and 39.09 on the S & P 500-Stock Index. If 1958 is to be a good stock market year, these lows should hold for the first 3 months of the year. If they are penetrated on the downside, a further decline to the 400-385 level would be the probability. If the lows hold, a testing of the Nov. 29th intra-day highs of 452.49 and 41. 95 woul be the next step. Enough of a potential base has been built up since October to indicate ano ther attempt to push into the very heavy overhead supply at 450-520. The next attempt could carry deeper into the overhead supply than the Nov. attempt – probably to 465-480. Such an advance, if it occurs, would be extremely selective. The food chains continue to show above average action with several issues reaching new high territory. Food chains raised their dollar volume by about 100/0 in 1957 and rates and earnings set records for the sixth consecutive year. This growth trend should continue with profit margins increasinjCwith more – like American Stores, First National, Grand Union and Winn-Dixie. This letter has mentioned Wilson & Co. (161/2) on several occasions over the past month. The stock reached new high territory for 1957-1958 on Friday at 16 1/2.Hog mar- ketings should be sharply higher in 1958 and the end of the drought in the Southwest means increased cattle supplies. Management has done an excellent job in increasing profit mar- gins and earnings in 1958 couldtc ccnsiden.bly above the 2.19 earned in the f.sca1 year ending Oc;t. 31. Estimates of 3.50 have been mentioned. The company has declared four 25 cent payments for 1958 to yield 6. 10/0 at Friday's closing level. The stock has held in the broad 17-8 range since 1947 and an upside breakout of this long, ten-year trading shelf would have considerable technical significance. Some of the stocks in the electronics-TV group have also shown above average action over recent months. I have mentioned Zenith Radio (125 1/8)Hoffman Electromcs 1211/' ) and Raytheon (22 3/8). In a sense, General Rwy. Signal (23) might be classified as partly an electronics company. Earnings for 1957 should be at least 3.25 and the yield is close at 70/0 on the 1 regular and 50 extra declared in 1957. Backlog of orders has held up well and 1958 earnings should compare favorably with 1957. Hoffman Electronics has developed a solar energy converter panel for a portable solar-powered radio. Gther–appliGations are a.solar flashlight and a solaLhighwaywarn- flasher. This company appears to be in a new phase of growth in the solar evergy, silicon and semi-conductor fields for military, industrial and civilian users. Some of the building stocks have moved ahead in recent markets. The government las made several moves to stimulate housing. The announcement Thursday that the Fede- ral Housing Authority has eased credit rules is a case in point. National Gypsum ( 43) has a favorable technical pattern as do several other issues in the building group. Bell & Howell (43 1/4) should top its earlier estimate of 50 million in sales for 1957 as against 45.6 in 1956. Recently released a new 8-mm movie camera which ad- 'usts automatically to light conditions. Earnings for 1957 should be above the 3.78 earned in 1956 despite an increase of 100,000 shares. Thl! market letter 15 not, and under no circumstances IS to be con5trued n;, an offer to sel,Bnn.filtTfMilii\ 'lj!lJ;BiRtJ5;bferred to hereIn The mformatlOn contained herem IS not guaranteed HS to nccuraCl or completeness nnd the furn IShlng thereoH.flitH, dh1ttlntler rto LI I cumsfii'rice lb to he construed as, a representn- tlOn hv Wal;ton &, Co, Inc All eXpreSSIons of OPInIOn are subject to Wrrtlto\1;\t; uft,QfflcetS, Directors Stockholders and Emplovees thereof. purchase, sell anr! mny an Intel est In the securltlCs mentioned presented merely as a J.tenerul, Informal l'ommcntnry on day to day market nc\\s alld not Il'l a complete andlyql' A(ldltIOn-tI mfflrm.ltLOn \qth IC3PCCt to any seCUrltlcs leferrcd to herem will bc fUrnlhc1i UpLln relllC'lt \\- 101 -.

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Tabell’s Market Letter – January 10, 1958

Tabell’s Market Letter – January 10, 1958

Tabell's Market Letter - January 10, 1958
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— — -W–a–lIsntocn.-&-Co. Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (SwH,..Id) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LmER January 10, 1958 After rlsmg sharply on Wednesday, the market gave up most of its gains in Thursday and Friday trading, and the Friday close of 438.68 in the Dow-Jones Industrial Average was below last weeks closing level of 444.56. However, the market still continues to hold in the trading range which has obtained since the. October lows. On the Dow-Jones 65-stock average, which presents a clearer technical picture, this range has been approximately 142-151. An upside breakout – of this range could mean a return- to about-165-,around- 1956-September 1957 trading shelf. A comparable level on the industrial average would be around 460-470. Massive overhead supply exists at these levels and it would be natural to expect any rally to be halted here. A downside breakout of the above trading range would, of course, probably indicate further market weakness. Many investors, whose interest over the past decade has been centered on common stocks have been paying increasing attention to the high-grade bond market. The reason for this is, of course, that developments in the money market have had a profound effect on common stock prices. Sharp declines in bond prices, i. e. tight money, raise bond yields and make high grade securities competitive with stocks for investment funds. Indeed, the recent market decline is partially explained by the fact that, in July, many high grade bonds were being offered at yields substantially in excess of those available from commons. The natural result was a decline in stock prices. A number of formulae have been devised for discovering an equitable relationship between bond and stock prices. One of the most valuable of these is the Central Value Theory, developed by Mr. BenJamin Graham, author of Security Analysis and The Intelligent Investor, two of the most widely-read financial handbooks. ThisJheory only moneyrates but -earnings as well. Very simply, it takes the 10 –year average earnings on the – Dow-Jones industrial Averages and capitalizes them at twice the current yield. on high grade bonds. This results in a central or median value for the average. In order to allow for high and low investor confidence a range of 20 above and below this central value is then computed thus giving a normal range of value for the Dow. A study will show,that with the exception of the 1927-1932 period the market tended to remain pretty much within the above mentioned range. During the period 1956-7, however, central value dropped sharply as the price of bonds declined. For 1957 the central value was 374. 20 above this figure was 448, indicating that, with the average above 500, bonds were becoming more attractive than stocks on a yield basis. The recent drop in prices has brought the relationship more into line although the market is still much above the present central value. Most interesting in this connection, however, is the present trend of interest rates. From an October high of 4.15, Moody's index of AAA bonds has dropped to 3.68/0. This has raised central value close to 400, and brought the market at least well within the normal range of value. Still more significant, is the fact that a further drop in yields, expected by most analysts, would continue to lower central -value sharply. –'—–eVen if earnings were to aecline. A to 1954 yields of around 2.85 would result in a central value of over 500—which would place the stock market at current levels well in the lower part of the value range and create the most important long term buying spot since 1951. There is, no way, of course of telling whether yields will decline this low—or whether the stock market may not go lower first. The central value theory does tend to point up the fact, however, that the future trend of money rates will have a profound effect on stock prices, and will be one of the most important factors to watch over the months ahead. EDMUND W. TABELL VI itLnelH & eel me. A ThIS market letter IS not anrl under no Circumstances IS to be construed I1S. nn offer to sell or a soliCItatIOn to buy any ;eCUrltJes referred to The information 1'\ not gunrnnteed ns to or completene'S and the furnlShlnR thereof IS !lot, nnd under no circumstances IS to be COnltrued a I'epresentn- H'cltrlly & Co . Inc AU expreSloions of opmlOn are subject to chanpe Without notice & Co. Inc, and Officers, Directors. Stockholders and Eml,loyee.o; thereor, Illlrchuse, sell and may have an mterest m the SecUrltlQs mentiOned herem ThiS market letter IS mtended and prlented merely no; n penernl, mformal commentnry on day to day market news and not as a complete nonlYIHs A.ldltional mformntlon With respect to an) securities referred to herem Will be fUI nlshed upon request \\.i 301 -..

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Tabell’s Market Letter – January 17, 1958

Tabell’s Market Letter – January 17, 1958

Tabell's Market Letter - January 17, 1958
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Walston &Co. Inc. – ….;;.. Members New YOTk Stock Ex'change NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swit,l..d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIvATE WIRE SYSTEM TABELL'S MARKET LEnER January 17, 1958 The lowering of margin requirements from 700/0 to 500/0 brought about a sharp rall on Thursday. The intra-day high on the Dow-Jones Industrials of 453.25 was just a shade above the November high of 452.29, but the larger part of the advance was los.t by the close. Further irregularity carried the market somewhat lower on Friday and at the week's close of 444.12, the averages were still within the confines of the broad 450-420 area in which it has remained for three months. As mentioned in previous letters, I believe the important point to watch on the downside is the December low in the averages when.,tax-loss sellingwas -aLits peak.- IL195 8 is.to be a good stock,mar.keLyear, the industrial average should hold above the December 23rd intra-day low qf' 423. 86 for the first three months of 1958. Ability to do this would furnish a very constructive signal. Among the groups that continue to show above average relative strength are the finance companies. There are several attractive issues in this group but; from both a technical and fundamental point of view, I like PACIFIC FINANCE (43). Earnings for the nine months ended September 30th increased to 3.59 from 3.03 earned in the pre- vious nine-month period. The dividend was increased to quarterly in 1957 to yield about 5.60/0 at present levels. The company operates in the growth areas of California and the Southwest. The company owns two insurance companies that write fire and casualty risks mostly on automobiles financed by the company. A life insurance subsidiary was organized in 1956. Pacific Finance has built up a very favorable techm- cal pattern. Ability to reach 45 would be a very constructive indication. I have mentioned three groups that appear to be slowly reversing their down- trend of long standing and are slowly forming potential base patterns. These three groups are building supplies, chemicals and paper. More time may be needed before these patterns are completed, but these groups appear to be interesting purchases during periods of market weakness. AIR REDUC TION, AMERICAN CYANAMID, MONSART,O,SPENCER.aIld- VICTOR CHEMJCAL -a'r-e–in.teresting chemicals to- w-at-ch. FLINTKOTE, MASONITE, NATIONAL GYPSUM, RUBEROID and U. S. GYPSUM are the building supply stocks that should be bought on dips. In the papers, CHAMPION PAPER, MEAD PAPER, SCOTT PAPER and UNION BAG-CAMP PAPER are showing the best relative strength action. Another group that should be watched closely for a possible nearby change in trend is the airlines. This group has been slowly showing improving action and could be near a period of long term strength. AMERICAN AIRLINES, EASTERN AIRLINES, UNITED AIRLINES and PAN AIVIERICAN AIRLINES have attractive long term patterns. For nearer term action, however, KLM ROYAL DUTCH AIRLINES (27) may have more appeal. Earnings for 1957 are estimated at 4.60 after extra depreciation as against 4.42 in 1956 and the stock yields 6.80/0 on the 1.84 dividend. KLM is one of the world's leading airlines and the stock (71.7 owned by the Kingdom of The Netherlands) should continue to show a nice rate of growth. The price range since listing on the New York Stock Exchange in May has been 36 7/8 high and 23 1/4 low. The company serves all six continents through scheduled flights to 109 cities in 74 countries. Another group showing improving action is the fertilizer group. My selection -.in this field would be INTERNATIONAL MINERALS & CHEMICAL (28). On the unfavorable side of the-pictilre, department stores ;;re 'showing declining relative strength and I would lighten holdings m this group during periods of market strength. Continued favorable actlOn is shown by utihties, food chains, tobacco, electronics-TV, aircraft, finance and meat packing. It was noted in last week's letter ability of the Dow-Jones 65-Stock average to reach 152 would indicate a further advance to 162. A high of 153 was reached on Thursday and strength in the rails carried the 65-Stock average higher on Friday despite the drop in the industrials. Strength in the utilities and rails could move this average higher with only a little help from the industrial section. EDMUND W. TABELL g CQ. nqc. ThiS market letter 1; not 'l.nd un.!er no ,,, to he c'Jnstllld .111 Ih.l to 01 n sohutatlOll to buy my securitIes referred to herem The mformatJon cont(l.lncd helem IS not tn ,1rClll lcy.n (olllpletcTlcs; all.! til,' fUl n!'..,hlllg Ihelcof IS ))ot, ,\nd undCI 111) CI\CUIlltHnce to be ns, n repr(!scnta- t!on hy \Vnlston & Cn. All f (o)lI\In 11' t \\l1hllt nOllcc. &. Co. Inc, ,\lId Dlrcetof'l, Str,ehhold(!fb IltHl f'.mploYflC; thelcnf, 1'1l1l'hn;c, ;ell IInll m'l)- hl\e ,In 1ll\t'IC;t III th mentloncd hCICIll llldlket letter 1; Illtnded 1111(1 prcs(.ntcd merely (is a ,,cnCla), ItJfnrmul on to dll\' mHrh(!\ new, anrl Tl(Jt n (oml'lctc fllhlb.h AIII.huon.l InfornHitlon \\Ith rc;pcrt to .In) 'lccurltte; rderrcrl 10 hcrelll \\111 he fUI nl-lhcd upnn request \\;.. 30! ,

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Tabell’s Market Letter – January 24, 1958

Tabell’s Market Letter – January 24, 1958

Tabell's Market Letter - January 24, 1958
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Walston &eo. —.;….;Inc. – – Members New York Stock ExcluLnge NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Sw;hed.,dl OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER January 24, 1958 The overhead supply at 450 and above on the Dow-Jones Industrial average has proved to be a difficult barrier to penetrate, but individual stocks have managed to reach new high territory as witness totals of 20 new highs on Monday, 28 on Tuesday, 40 on both Wednesday and Thursday and 39 on Friday. It is interesting to note the type of stocks that have been reaching new high territory. Among Thursday's 40 new highs were Best Foods Philip Morris First National Stores Pillsbury Mills -'-IiidianapolisPr&-It- – – P-otbmacElect'Y'k Lorillard Standard Brands Pacific Finance U. S. Gypsum All of these stocks are in the groups we have been mentioning since late August as the ones which would show the best relative market action. This still appears to be the pattern. Despite the fact that they have already had some fairly good percentage increase! , the utilities, tobaccos, food chains, foods and finance companies continue to show above average relative strength. Certainly the investor who has concentrated on the light indus- try or consumer goods groups has fared much better than the holder of the heavy industry or capital goods groups. This action may continue until the industry groups con- solidate and gradually form new accumulation patterns. This may take considerable time. For example, it took Bethlehem Steel three years of basing out and reaccumulation betwee 1951 and 1954 in a price range equivalent to 45 and 60 on the old stock before it started the advance to almost 200 before the four-for-one split early in 1957. A lot of the leaders of the 1953-195 7 advance may have to go through similar periods of reaccumulation and digestion before they are ready to take off again on a major advance. In the meantime, there are other opportunities that will gradually present themselves from time to time. — However,. opportunities may be lost-ifthe for capital,,-gains-confines himself to former favorites. In the type of market we anticipate over the next year or so, some rather unusual groups may show excellent market action while the balance of the market slowly consolidates. In last week's letter, I mentioned the finance companies and their favorable technical patterns. I particularly mentioned PACIFIC FINANCE which has advanced to a new high. I am listing other issues below. They are all listed on the New York Stock Exchange. The following stocks are companies concerned principally with the small loan field. Approx. Price Dividend Yield A Fmencan Investment Co BenefiCIal Fmance FamIly Fmance Household FInance Seaboard Finance 17 1/2 20 25 1/2 29 19 1.00 1. 00 (a) 1. 60 1. 20 (b) 1. 00 (c) 5.7 5.0 6.3 4.2 5.2 (a) l'lso 6/100ths of 2.50 preferred m 1957. (b) F Iso 50/0 In stock. (c) P Iso 2 in stock. The following five companies are larger in SIze but are mostly concerned WIth automobile and industnal fmancing, although they do have a certain amount of small loan business. j' pprox. PrIce Dividend YIeld 1 ssoclates Investment 70 2.60 3.7 C.l.T. FinancIal Commercial Credit General Finance PaCIfic Fmance 48 51 21 46 2.40 2.80 1. 00 2.40 5.0 5. 50/0 4.8 5.2 111 of these ten Issues have attractive technical patterns. Thl'\ market letter IS not anr'! undcl no circumstance; 15 to be construed t1-;, an offer to tl1IY aW GeclitiU'Cii rlf.erred to herein The lllinrmntion ('untnlned herein 15 not J'unrnntced liS to accuracy or completeness IInr! the furnlshmg- 1f'h1.r'lfn,I&! 110 hc construed as, n rep! csentn 11111 hy Wal'lton & Co, Inc All c..prCSSlOns of Ollinlon arc to chnnge ,,!thout1P.pWa Blli.l0offilcers, Directors, Stockholders anft thereof, pUlchllSC, find nM h'lvC an lntctCst m the SeCUrltles mentIoned merely as a gcnernl, mi!! mol comment'lr on (In to dllY mllrkct newo- and not as a tomplete nnalY15 Ad(i1t1onnl mCurmntlOn \\ Ith reo-peet to nny securitIes refctreoJ to hClcm WI! t,(, fu, nlhe,\ ur,n rC(lllcst i\ 301

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Tabell’s Market Letter – February 07, 1958

Tabell’s Market Letter – February 07, 1958

Tabell's Market Letter - February 07, 1958
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Walston &Co. – – – – I n c . Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa…laod) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER February 7, 1958 After reaching a new recovery high of 459.77 on Tuesday, the Dow-Jones Indus trials drifted lower for the balance of the week to close at 448.76. Standard & Poor's 500-Stock Index, which also reached a new recovery high of 42.60 earlier in the week, closed on Friday at 41. 73. At Tuesday's highs, both of the above averages had reached the lower range of their very heavy overhead supply at 460-470 and 42.50 – 43.50. However, the Dow-Jones 65-Stock Composite average, which has an upside potential of 162165, only reached a high of 156.27 on Tuesday, so it is possible that another rally attemp – after -some -prior-consolidation. – – – ..,.. As I have mentioned in previous letters, I do not expect the general market to move very far in either direction for at least the next year. There is heavy overhead supply in most stocks that will take a long time to penetrate. On the downside, the area between 420 and 380 should prove to be the low, with the probabilities increasing that the October low in the averages could be the low for the move. This, of course, does not preclude new lows in individual issues and groups. In the meantime, I expect several wide swings between the outer extreme of the wide trading range that will result in the gradual formation of a broad base pattern that will justify a decisive penetration of the overhead resistance between 460 and 525 in the Dow-J ones Industrial average. This backing and filling movement indicates a good trading market, but there will also be issues that will be in an uptrend during the general sidewise movement of the averages. An important constructive force behind the market for next 6 months or a year will probably come from the money market. Therefore, groups that more or less move with money rates will probably show the best price action. This will include utilities, finance companies, food- chains, tobaccos and the other groups that I have been mentioning in my letter for the past several months. PHILIP' MORRIS (48 7/8),for example, moved into new territory on Friday at 49 5/8. This is the highest levelreached-since-L953. -,In-1950, 7.26 per share in 1949. Earnings for 1957 totalled only 4.50, but the last quarter results were 130/0 above the 1956 period and continued progress is expected in 1958. Philip Morris, with its popular Marlboro brand, is the only major tobacco company where filters account for more than half the sales. The other major filter brand of Philip Morris is Parliament which is being extensively advertised and pushed through a price reduct ion and a new and highly efficient filter. If the campaign is successful, Philip Morris will, unlike other tobacco companies, be almost entirely in filters. Philip Morris is also unique in being one of the few tobacco companies that are diversifying into new products. Last year, Milprint Inc., the leader in thefielld of flexible packaging, was acquired. In January, the second phase of the diversification program was completed by the acquisition of Polymer Industries of Stamford, Conn., makers of adhesives for packaging and the textile industry and Franklin Research of Philadelphia, makers of waxes, cleaners and industrial emulsions and finishes. Both the fundamental outlook and technical pattern of Philip Morris are highly encouraging for the company's future. Other interesting situations mentioned in recent letters include WILSON & CO. (165/8), HOFFMAN ELECTRONICS (22 1/2), FAMILY FINANCE (27 1/2) and NATIONAL GYPSUM (45 1/4). Would use periodsof minor price weakness to acquire issues of this type. During periods of strengtliwould switchout ci(heavy industry groups into the more favorable light industry issues and also build up a reserve in short term bonds for later purchases of common stocks. EDMUND W. TABELL WALSTON & CO. INC. lllarket Jettel 18 not nnd unuer nn tl) be constitH),j ,In offer to sell or n ;ollcltatLOrl to buy any '!('cuntles referred to herem The lnformatlOn CQlltfllne,j herein i; not Jl;unrnntced ns to nccuracy 01 completeness and the furnishing thereof IS nut and under no Circumstances 19 to be construed a'!. 'I rcpresentn- tlon hy '\'alston .t Co. Inc All e).prClOl1 of (1)1111on nrc 'uhJcct to change without notice \\'al5ton & Co, Inc, and Officers, Directors. Stockholders and Emplo\'(.e' thcleof, purchn'c, '1ell and may hate an Interest In the securltle'l mentioned herein Thl'l market lettel 1; lntendcd nnd presented merely a'! a general, mfurmnl commentary on day to mllrhct news find not a .. a complete analYSI.. Addlilona\mformatlon \'lth respect to any securities referred to herem Will be fln m ..hed liP')!' request \\-. JOt

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Tabell’s Market Letter – February 14, 1958

Tabell’s Market Letter – February 14, 1958

Tabell's Market Letter - February 14, 1958
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Wdlston CO.8———-Inc.– Memb.s New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE iSwitml.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTE…. TABELL'S MARKET LETTER February 14, 1958 In my December 6th letter, tabulating the effect of tax loss selling on the Decembe market, one of the conclusions drawn was that if the December lows in the averages werE broken in the first three months of the new year, the trend was usually either down for thE year or there was a sharp decline sometime during the year. The December, 1957 low wa 423.86 on the Dow-Jones Industrials and 39.09 on Standard & Poor's SOO-Stock Index. In the twenty-two years since 1935, the December lows were broken twelve times in the early months of the year. On six occasions this happened in January, twice in February, three times in March and once in April. In the other ten years, the December lows were duringthe,next and.themarket showed.a. in So far, the averages have 'held well above the December lows. This week's low on the Dow- J ones Industrials was 438. 13 and the low on the S & P 500-Stock Index was 40.58. Ability to hold above 423.86 and 39.09 for the balance of thls month and through March would be an encouraging signal. , Ever since last August, this letter has consistently stressed one theme — the ad- visability of switching from cyclical,heavy-industry type stocks into the defensive con- sumer goods category. Such switches have proved consistently profitable since most such stocks are now selling well above their August highs – despite the intervening sharp break in the general market. Technical and fundamental work would appear to indicate that this action will con- tinue over the intermediate term. For this reason it would still appear advisable to lighten commitments in capItal goods stocks in favor of foods, food chain, tobacco, utility, finance, container and electronics issues. In line with the above investment policy, our recommended list has been drasti- cally revised. Many stocks in the above mentioned groups appear attractive for new purchase at this time. However, we have attempted to list below only a few of the most attractive, and this list will be constantly supervised and brought up to date in future -issues Also – thec-atego;y are a ..,,- number of special situations outside the above mentioned groups which seem to have mer Current Price Ind. Div. Ind. Yield BUILDING National Gypsum 46 2.00 4.3 CONTAINERS American Can Anchor Hocking Container Corp Llly Tulip Cup 43 2.00 4.7 44 2.00 4.5 18 1.00 5.6 67 1.80 2.7 ELECTRONICS Hoffman Electronics 22 1.00 4.5 Raytheon 24 stock Sperry Corp. 19 .80 4.2 Zenith Radio 133 5.00 3.8 FINANCE Family Finance 28 1. 60 5.7 FOODS General Foods United BiscUlt FOOD CHAINS First National Stores 54 2.00 3.7 33 1. 60 4.8 57 2.50 4.4 TOBACCO Philip Morris — 51- . – 3.00. 5.9 UTILITIES Carolina Pro & Lt. Panhandle East. Pipeline 27 41 1. 32 1.80 4.9 4.4 MISCELLANEOUS Bell & Howell General Railway Signal Int'l Minerals & Chemical Pan-American World Air. Wilson & Co. 46 22 28 14 17 1. 00 1. 75 1. 60 .80 1.00 2,20/0 8.0 5. 70/0 5,7 5.9 EQP.qUJ!TD Vi. q;P.rBELL lthli.1'filIT.iuitw IS not, and undN nl) Clrcumstanccs 15 to 1e construed Ro;, an Qffcr to !1J or 11 sec;,lol(;Qe to herem The mfQrmahon tfinHilrh!d not Jt\lllrnntecd lUI to nccul ncy Ot complcten!5'1 and the !UI nlshlnl. thQleo! IS ..s.hl'4(\j;IQ, construed as, a represcnt.'\o hon h)' \Vnlston & Co, In(' All expre'lSlons of OPinion nre '1uhJect to chnnl.e Without notice \\ alston & C, Inc, anrl Officers. Directors, Stockholders and Emplyl'c; thereof, pUlchase, sclland aHl), hrl\'e an rntere;t m the sel'untl!5 mcntlOned hercm Thl; market letter IS Intended nnd prcsented merely 11'; n general, Informnl commentary on day t dn nllllket news and not us n complete analYSIS Addittonal rnformatlOn \\Ith to any secunltc, referred 10 helcm Will be furni …hed upon relluest \\ ' JOI

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Tabell’s Market Letter – February 21, 1958

Tabell’s Market Letter – February 21, 1958

Tabell's Market Letter - February 21, 1958
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— – – Wdlston &Co.—–lnc. Members New York Stock EXchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Switml d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER February 21, 1958 The intermediate term technical indicator registered a sell signal at Friday night close of 40.88 on the Standard & Poor 500-Stock average, indicating the possibility of a further test of the December lows. Examination of individual patterns, however, continue to indicate a number of stocks, especially in the groups mentioned in last week's letter, c well move ahead regardless of the action of the general market. Any general market weal ness would provide excellent purchase opportunities in these groups. Statistics HOFFMAN ELECTRONICS CORPORATION Current Price Current Dividend Current Yield Long Term Debt Common Stock 22 1/2 1.00 4.40/0 2,470,000 730,295 shs. The field of electronics en compasse1 so many products and applications that it is often difficult for the investor to select electronics companies with above-averagl growth potential. Because of the diversit of the field, the companies with the bright Sales 1957-E Sales 1958-E Earn.per Sh.1957-E Earn.per Sh.1958-E 40,000,000 48,000,000 2.25 2.70 est futures are often specialty producers, manufacturing items for which a betterthan-average growth trend is foreseen. Such a company would appear to be Hoffman Electronics Corporation. Mkt.Range 1958-55 313/8 – 171/4 Hoffman may be broken down into three major divisions; Hoffman Labora- tories, the Semiconductor Division, and the Consumer Electronics Division. Hoffman Laboratories Division, the most important in terms of sales, has esta- blished a substantial position in a number of fields of milltary electronics including navi- gation communications, radar, countermeasures and test equipment. It is a major pro- ducer oLARN-21, theairborne ,portion of the TACAN been approved the national military and commercial navigation system. Hoffman should participate in the continued expansion of aircraft navigation systems which will become necessary as the United States airways become more and more crowded. The Semiconductor Division is less important in terms of sales, but of almost equal stature in terms of profits. This division manufactures silicon semiconductors and Zener diodes which are used in nearly every significant missile program and in a wide range of components, communications equip;uent, aircraft controls, etc. 1959 is expected to see the first use of transistorized auto radios, thus opening up an entirely new field. Silicon transistors have decided advantages over the older, germanium tran- sistors due to greater temperature stability. Through its research in silicon, Hoffman has developed numerous solar energy convertors and is now one of the leading producers of such convertors and a major factor in the solar energy field. Hoffman's third division, the Consumer Electronics Division, produces black and white and color TV sets, high fidelity phonographs and portable radios including a transistorized portable powered by solar energy. Due to heavy competitive conditions in the TV industry, this division has operated at practically no profit for some years, but operating economies, coupled with increasing sales of high fidelity and portable radio equipment, should end this condition in 1958. -Hoi'fman's recent financial history has been one of increasing profit margins— by elimination of unprofitable items. Thus, sales declined sharply to about 40 million in 1957 vs. 46,580,000 in 1956. Net per share probably increased to 2.25 vs. 2.19, however. In 1958 the Semiconductor Division, by far the most profitable, should continue to grow and thus add importantly to profits. Defense contracts are expected to remain at their current high levels, or increase, and the Consumer Electronics Division could well show a profit. Under these conditions the company is forecasting an increase in earnings to 2.70 on sales of 48 million. Research expenditures (close to 50/0 of sales in 1956) will continue important and new products are constantly being developed helping to assure a bright, longer term future. From a technical point of view, the stock has a potential long term obj ective of 43 Good support is afforded at 2Q- 1 9 ThLS mnrket letter jq not, and undet no ClICllmstances 19 to he con-;ttucrl 11,& lin offer b\!b'rIl\Yntrt1fitlql rcfertcd to herelll The lIlformntlon At!'!Cd is not gUdrnntee(\ n; to 01 completeness and the 1 )t 3ynfl-19n &. Co, Inc All expressIons of oPInion arc subJC'Ct to ehunge Wlt'wl,j ,mp )urchu'lC, '1ell lnd may have an Interest III the securltHq mentlOnWih I JiMo,r to be eon…trued as, a represcnln t;Q,.,….,!ney….'l;i. Officers, DIrectors, Stockholders IIn.\ nnd merely liS 1\ genel ai, IlIr'Jrrnnl l'ommentnry nn day tn m,lrkct news and not nq n cml,('te RnuiysI AddltJonu mformatlon \\Ith respect to IIny SeCLlrltles referred to hereIn WIll he fUI filshcd upon retuCt \\;.. 301 ,I

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Tabell’s Market Letter – February 28, 1958

Tabell’s Market Letter – February 28, 1958

Tabell's Market Letter - February 28, 1958
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Walston &- Co. – – – – I n c , – Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE ISwH,.,I.,d) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LinER February 28, 1958 After returning from a speaking tour to the new Walston office in Honolulu, I find the market at just about the same price level as when I left the snow and cold of New York for the sunshine of Hawaii. G'uite a few stocks reached new high territory during my absence and they were mostly in the light or consumers goods groups which I have been advising for purchase over the past six months. Also, quite a number of issues declined to new lows and they were mostly in the heavy or capital goods groups on which I have counselled avoidance. this type of,actiOILto possibly into – -1959. I expect a good trading market with averages swinging back and forth over a wide range. I believe the chances are even that the October lows of 416.15 on the Dow- Jones Industrials and 38.84 on the 500-Stock Standard & Poor Index will hold. As I have mentioned in previous letters, the ability of the averages to hold above the Decem- ber lows, when heavy tax loss selling brought about artificial liquidation, would be ex- tremely constructive. In almost every year since 1935, ability of the averages to hold above the December low for the first three or four months of the new year has indicated a higher market for the balance of the year. On the twelve occasions since 1935 when the December low was broken early in the year, two-thirds of the time this occurred before the first of March so the ability of the market to hold thus far despite very poor earnings and dividend news is encouraging. The lows of the past week were 434.04 on the D. J. Industrials and 40.35 on the S & P 500-Stock Index as against the December lows of 423.86 and 39.09. Despite the action of the general market averages, I continue to believe the best market performance will be turned in by the yield stocks that are effected by changes in money rates and bond yields. I expect continued easing of money and higher bond prices and, therefore, higher prices for the common stocks of utilities, finance food chains, Jgbaccos A good,cross suggest- ion of issues 'of this type are carried in our recommended list in the letter of February 14th. After the yield issues have their play, I believe some of the groups that reached their highs over two years ago and have since been consolidating, could again come into the picture. Building supplies, chemicals and papers are among others that fall into this category. At a much later date the heavy industry shares will again be ready. Despite the recent strength which carried the stock into new high ground, ZENITH RADIO still appears to be equitably valued around current levels at 138 1/4. The company today reported earnings of 16.58 for 1957 vs. 12.55 for 1956. Of this amount, 11.71 was apparently earned in the final six months and only a small portion of these earnings give effect to the recent favorable settlement of litigation with Radio Corporation of America and others. The company has also stated that January sales were 200/0 above a year ago, indicating that results for the first quarter, normally a poor one seasonally, should make interesting reading. On this basis a forecast of 20 per share earnings in 1958 on the present stock – shortly to be split two-for-one – does not ippear overly opti- mistic. .- These earnings will come exclusively from the consum er electronics field, probably one of the most competitive of all consumer fields, and yet one in which Zenith has enjoyed conspicuous success, For the future, two new developments lend further promise. The first is Phonevision, one of the most promising of the new payTV processes. Another is research work which may eventually lead the company into promising military and industrial electronic applications. With working capital of around 40 million and no debt, the company is in position to finance considerable expansion with no equity dilution whatever. The stock is recommended for purchase a roup d cp rreDt leyels. Thls market idtCl is not and under no CLrcumst.nnces IS to be constl'ucd as. an offer tu sell ur to herem The lTIformation ('untallled herein IS not as to nccUl acy r completeness nnri the CurnJhmj.t th(.r(.of t(ln hy \\'nhton 8. Co. InC' All ('xpt'C'Slons or opmlon arc suhJect to change WIthout notiV\f. tp..he construed as. a represent!!.Q,v.c Dlrector9. Stockholders and EmI11,,cc'I thereof. purch.l.se sell and may ha\c an m the mentlHned herem 'hIs mar et lettcr 1'1 mtE'ndd and presented mcre!y as a genera!. 11Iforma! ('ommentllry on rill' to da\ mllrket nc\\s lind not no; a (.oml)lete annly,,, A'.!ltlOnai 11lfOtmatlon '\Ith 1 (;llcct to any securities referred to hcrcm \,,111 be fUI m … hed III'on \\ X J01

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Tabell’s Market Letter – March 07, 1958

Tabell’s Market Letter – March 07, 1958

Tabell's Market Letter - March 07, 1958
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– r Walston &- Co. – – – – I n c . – – Membe1's New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (SwH,I.,d) OFfiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER March 7,.1958 Anticipation of a further cut in the discount rate brought about a rising marke for the week with the Dow-Jones Industrials advancing from a closing of 439.92 last Frida. to a closing of 451. 49 today. The intra-day high for the week was 452.81 as against the 'arly February high of 459.77. Comparable figures on the Standard & Poor 500-Stock Index ace 42.60 in early February and an intra-day high of 42.24 this week. Despite the gloomy business news, the market's technical action is definitely encouraging. This is not at all unusual. To use a hackneyed phrase, the stock market should act as a barometer not as a thermometer. It is apparently endeavering to discount a bottoming o,ut of the .business decline in sales.and earnings bythe middle of the year. If this occurs, the market will presumably continue its advance. If, on the other hand, business conditions do not show the anticipated improvement later in the year, another testing of the 1957 lows would be the probable sequel. Actually, I believe the investor or speculator would be much wiser to ignore the general market and the action of the various averages and to concentrate on individual groups and stocks. It is my opinion that the stock market, as measured by the averages, will not move very far in either direction for the balance of 1958 and probably far into 1959. Business in general is not going to deteriorate much below present levels, but neither is it going to dramatically reverse the present downtrend. This will probably result in a stock market moving back and forth in a relatively wide trading area with a more than 50-50 probability of the October lows holding on the downside, but the averages not going much higher than about 470 in the Dow-Jones Industrials or 45 in the S & P 500-Stock Index because of the terrifically heavy overhead supply between 470-520 and 45-49. Therefore, the sooner the investor or speculator realizes we are probably in a wide trading area the better will he be able to plan his buying and selling decisions for both the longer and shorter term. tQ be complicat.e1L1Jythe fact .that all issues. and groups are not going to move in unison. In the February 14th letter, I listed the issues in our recommended list. Most of the twenty-one issues listed are in the light or consumer goods classification. In the past fortnight, Anchor Hocking Glass, Lily Tulip Cup, Zenith Radio, Family Finance, General Foods, First National Stores, Philip Morris, Carolina Power & Light, Bell & Howell and Wilson & Co., or approxi- mately half of the list,have reached or approached newall-time highs despite the fact that the Dow-Jones Industrials are at 450 as compared with an all-time high of 525. This type of diverse price action will continue for the foreseeable future. It will, in my opinion, result in a most interesting and profitable trading market provided that the individual is able to adjust his viewpoint to changing conditions rather than adopting an all-out bullish or bearish state of mind. During the past week, my intermediate term technical indicator gave a buy signal and reversed the February sell signal. With the market in a broad trading area, it is expected that the technical indicator will continue to give numerous Center line signals all at about the same price level. The indicator will probably not give an important signal until the market becomes either sharply overbought or sharply oversold. Apparently, from our technical work, neithe r condition exists today. With the further cut in the discount rate from 2 3/4/0 to 2 the rend toward easie; money conditions continues and the type of yield securities irnentioned in this letter should continue to show above average price action. I sug- gest a review of the February 14th list. Stocks in the list yielding over 5 on 1957 dividends include Container Corp (19) Family Finance (27 5/8 Philip Morris (50 1/8 General Railway Signal (22 1/4) International Min. & Chem. (29 1/8) Pan Amer. World Air (14 3/8) Wilson & Co. (185/8) EDMUND W. TABELL Thl'l market letter ; not. lind tmder no drcllmstanc('S IS to he construed as, un offer t ell or ,I to herein The mformation tnnllllne'! h,'lcm 1'1 not gunrantl!cd as to 11LCUrlIC\' r complct.ene.s lind the furnishing thcr(of not, and under no cl1cumstnncc'l 1; to be cunstrued 3'1, Il rellrl'cnla- 11011 \'Y \'III'lton &. Co, Inr All e\.pICS'lIn'l of OlIIlon .IlC sllhJcct to chmg.. \\Ithut nollcc '\'nlston & Co, Inc, nnd OffIcers, DIrectors, Slo(.khoJdclh nnd Eml,loycc thClcof. Illllch,lse, ell and mlY hll\c ao Intereslln the sCClllltles mentlone,l hereIn 'fhl' market lettcr IS 1Il1cnded lind prC'\cnted merely liS a general, mfollll.t1 eommcntru' on 10 (hy market ne and nut 1I'l It complete nnalysl'l Ad,litlUllJ.lwfornl.ltlon \\lth lCSpec.t to IIny 5eCUrities referlecllo helelll wl!1 be fll1 n I…hed U1'..-.n I ('quest \\ '\ 101

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Tabell’s Market Letter – March 14, 1958

Tabell’s Market Letter – March 14, 1958

Tabell's Market Letter - March 14, 1958
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Walston &eo.–….;…;,..;;In.c. – Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Switzerl,nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER March 14, 1958 After reaching an intra-day high of 457.27 on Tuesday, the Dow-J ones Indus- 111'lals ran into profit taking on Thursday and Friday and closed the week at 453.04. So far, The Dow has been unable to better the intra-day high of 459.77 reached in early February. However, the Standard & Poor 500-Stock Index reached 42.64 on Wednes- day, March 12th, as against 42.60 on February 4th. Based on technical action,it seems reasonable to assume that new highs will be reached during the next few weeks. Upside potential of the Dow Industrials is unclear although it should be somewhere in the 460- 480 range. However, the Dow-Jones 65-Stock Average and the Standard & Poor 500- latter-(now 42.33) indicating 45. .- . l.l..ipicatirg 162 – . .. – The market has continued to form this technically constructive pattern despite the plethora of unfavorable business news and indications of a growing recession. It is obvious to most students of business that first quarter earnings reports will be something less than encouraging and the market is already discounting the unfavorable business picture for the first half. There is no doubt but what the recession will continue for at least that long, although it begins to appear that some flattening out of the downtrend may take place during the latter part of the year. Strength so far has been selective and has been concentrated in the relatively few situations where earnings are expected to hold up or increase despite the unfavorable overall business picture or in yield stocks which will be favorably affected by further loosening of credit. Thus, the consumer goods and light industry stocks recommended in this letter have been in the vanguard of recent market strength. However, with the broadening of the technical patterns, it is possible that even some heavy industry stocks such as the steels, coppers, aluminums and machinery equities might work slightly higher over the shorter term. However, any strength in these securities should be used to lighten or dispose of holdings as thes'e' stocks do not have sufficient bases to stage .-anysustaihed-a'dVarice af'tliis time; 'Further oacKing ana-fil1ing-willDe needed to' such bases. This coincides with the fundamental outlook as it is doubtful that any substantial earnings improvement will take place in these industries much before 1959-1960. On the downside, the continued ability to hold above the December lows is encouraging. It now appears that the market will remain above these lows at least for the month of March. As pointed out in our letter of December 6th, in twenty-one out of the past twenty-two years the December lows were broken in the first three months of the subsequent year, or else were not broken at all. Thus, continued ability to remain above these lows (423.86 on the Dow-Jones Industrials and 39.09 on the Standard & Poor 500-Stock Index) would be he I p f q). However, it should not be inferred that any major uptrend will take place as it is unlikely that the Dow Industrials will be able to do more than push into the lower part of the tremendous overhead supply existing at 460-525. Indications, therefore, favor a trading market for 1958 with the upper limits probably around 470-480 and the lower limits at 430-420. Since the nearer term market pattern favors a test of the above mentioned upper limits, it would appear plausible to use that strength to dispose of unfavorable industry groups. For the..market we envision over the next year it will be necessary to adopt a trading attitude and to remain flexible at all times. Such an attitude can produce considerable success. In our recommended list several issues have made new highs during the past few weeks, including Bell & Howell, Wilson & Co., Philip Morris, Anchor Hocking, Carolina Power & Light and First National Stores. General Foods, originally recommended last September at 47 1/2, reached a high of 57 and is near its upside objective of 60-65. On strength into this area we would suggest a switch into United Biscuit, also on our recommended list. The latter is of slightly lower quality, but a somewhat higher yield is provided. AWTamb EDMUND W. TABELL WAJtSTON & CO,INe, ThiS market letter is not. nnd under no circumstances IS to be construed as, nn offer to sell Of n soliCitatIOn to buy any seCUrities referrerl to herem The information con tamer! herem 19 not guarnnteed as to accurncy or completenC!!s nnd the furnish 109 thereOf IS not, and under no Clrcumstanccs IS to be constl ued as, n represcntll t!on by Walston & Co, Inc. All c,,presslons of oPlnlon Ilre subject to change WIthout notice Walston & Co, Inc.. nnd Offlcets, Directors, Stockholders nnd Employees thereof, purchase, sell and may an lOterest m the securities mentIOned herem ThiS market letter IS mtended and presented merely as a general. Informal commentary on day to day market news and not as a complete analYSIS Additional mformabon '\'lth respect to any securities referred to herem Will be fU\'nlshed upon retlucst \\)\ 301

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