Viewing Month: February 1958

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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