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