Viewing Month: March 1958

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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Tabell’s Market Letter – March 21, 1958

Tabell’s Market Letter – March 21, 1958

Tabell's Market Letter - March 21, 1958
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— NEW YORK Wdlston &Co. ———lnc——— Membel's New YOI'k Stock EXchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OffiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER March 21, 1958 After dropping off sharply on Monday, the market recovered most of its gain later in the week with the Dow-Jones Industrial average closing at 452.49. There is no chang in the outlook for the general market and probabilities favor a mild advance in the aver- ages with selected groups outperforming the general list. tatistics CONTAINER CORP. OF AMERICA Current Price Current Dividend Current Yield 19 1. 00 5. 3 One of the best times to buy a true -growth.secut'ity.is-when ,advel'se develop- – ' ments have temporarily placed a damper on the price action. Such an opportunity, we be Long Term Debt Pfd. Stock 100 par Common Stock Sales, 1957 Earn.per Sh.1957 35,550,000 73,000 shs. 10,508,892 shs. 256,115,744 1. 36 lieve, is now afforded for the purchase of Container Corp. of America. Container Corp. has one of the best Ion term growth records of any common stock. Earnings more than doubled in the period 1949-1956 and in the same period, the price Mkt.Range 1958-57 20 7/8 – 16 1/2 of the common stock appreciated some 650. This growth has come about because of the trend toward packaging a wider and wider range of consumer items. The use of paper- board has grown from 10 1/2 pounds per capita in 1899 to 186 pounds per capita in 1955, a growth of 1,673, while population has grown only 1200/0. cOi'ner Corp. manufacture corrugated and solid shipping containers, folding cartons i r c s9 flexible packages and other packaging items. These are used for pa g d s ip . oceries, frozen foods, canned goods, soaps, beverages, electronic me lIes, drugs and many other items. The company is completely inf i eted t ill to the finished product, ,!cJually shipping a slightly greater board produced in its own mills. f . n to tha the tonnage of pape net purchaser 01 finished paperboa As every investor is especially stringent as ew c . s paper industry during 1957 became and demand increased at a less than norm I rate. Container Co 0 the rest of the industry, felt the pinch and sales declined to 256 illion in the prior year. Earnings per share of common stock drop ecord highcf 1.71 to 1.36. The earnings decline was aggro.\'atcd ty exlraordi y experscs arising from a heavy program of capital expendi- tures inaugurated in te 1955. During this period some 72 million was spent on new facilities. In 1957, start up expenditures on new plants amounted to close to 40 cents per share before taxes and thus accounted for almost half of the decline in earnings in the 1956-1957 period. For the first half of 1958, pressure on both sales and margins is expected to contin e and start up costs will continue to bulk large in the company's picture. However, the capi tal expenditure program is about completed so that only 15 million will be required for new expenditures vs. some 38 million spent in 1957. This included 22 million spent for completion of a new bleached sulphate and pulp mill at Brewton, Alabama. This move will make for further integration in the food board, the fastest growing 'paper product. Industry sources expect the downtrend in demand for paperboard to level off in early 1958 and turn upward at the end of the year. With most of its capital e'Kpenditures completed, Container Corp. will be in excellent position to benefit from increased deman and to resume its long term upward trend of sales. While working capital has been de- pleted by recent spending on new plant and equipment, the 1 dividend can probably be maintained if margins improve as expected in late 1958. At current levels, this divi- dend affords a generous 5. 3 yield – unusually high for a growth equity of this quality. Earnings for 1958 should approximate the 1.36 earned in 1957 with a pickup in the second half. From a technical point of view, ability to reach 21 would indicate 28-30 and any weakness caused by temporarily unfavorable earnings should provide outstand- ing opportunity to make long term investment purchases. IS not, nnd under no circumstances 15 to be construed us. an offer to s('ll or .\ so lei IOn 0 U) any slenr, re errc( herem The Hlformnbon ,,,nt.J.tncfl herem IS nut flS to hCCtllll(.Y or ami the lUI !l.lshmJ,! thereof I nu1'i.MriJ. us, a repres(!ntn Hun bv \'y nlston & Co, Inc All expresSIOns of ollinlon 81 e subject to without notice Wufs'tdn't lTlrbtors, Stockholders and Emll\oV( thereof I)urchase, ell nnd mny have an InterE';t In the ecurltles mentioned hel un ThiS mnrket letter IS mtended and presented merely as a g-eliCI aJ. 111fvlmlll rommentlLry on rlny t …. nllY mnrkd new lind not liS a c…. mplcte 1I11nlYIII'o AddltlOn,ll tlfolmatlOn '\11h respect to any 'Iecur111CS refelred to herem will be fill nlt.h('11 upon request \\, Jot

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Tabell’s Market Letter – March 28, 1958

Tabell’s Market Letter – March 28, 1958

Tabell's Market Letter - March 28, 1958
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I' NEW YORK Walston &Co. —–lnc —– Membe,-s New Yo,-k Stock SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER March 28, 1958 INTERNATIONAL MINERALS & CHEMICAL Statistics Current Price Current Dividend 28 1.60 Excellent yield, defensive value and good growth prospects seem to be combined at this point in the common Current Yield 5. 70/0 stock of International Minerals & Chemic 1 Long Term Debt .Pfg,–,StoCk .1.QQ . Common Stock The stock cur rently returns 5.70/0 on a we 1 27,100,000 (1) covered 1. 60 annual dividend which has . 33Q shs been.majl;ttained,Kothe.pasj; sevenyears. 2,337,317 shs. In addition, the outlook for growth pros- Sales, 1956-1957 106,200,000 Earnings per Sh.1956-57 2.81 Sales 1957-58 (E) 110,000,000 Earnings per Sh.1957-58 (E) 2.90 pects, over both the nearer and longer terms, appearsfavorable. International Minerals is one of the leading producers of fertilizer and agricultural chemicals in the United Mkt. Range 1958-56 337/8 – 25 1/4 States, with an important stake in variou industrial chemicals and consumer prod- (1) Includes 19 million 3.650/0 Convertible Debentures, convertible into common at 55 to Dec. 31, 1962. ucts. The use of fertilizer and plant food should continue to grow over the longer term wlth increasing use being made of high-margin superphosphate fertilizers Note Fiscal year ends June 30th. of which International is an important are carried on through six (1) The phosphate minerals dWWion 'n rus-bearing rock in Tennessee and Florida. (2) The potash es me located at Carlsbad, New Mexico, chemical plants a 'gar Is and an important nine roduces Feldspar matenals used cerarrllcware andgIass, clay, which is used in foundry together with silica, barite and erlite. (4) The phospha e che i ' one of the highest tonnage producers of triple superphosphat i tlrVo'1 0 produces dicalcium phosphate, an important animal feed supp e t food division is one of the leading fertilizer manu- facturers in the cou y se' to farmers in thirty-two states. (6) The amino products division gives the com n entry in the consumer field, producing the highly popular bcent, the largest ing brand of monoscdium glutamate. This product is finding 'ncreasing home and commercial use as a seasoning. As can be gathered from the above, many of the company's operations are integrated. For example, a large part of phosphate rock production goes to the phosphate chemicals division, part of whose products in turn are used as ingredients by the fertilizer division. For the near term, th e earnings outlook appears to be favorable. Earn'ngs for the year ended June 30, 1957 increased to 2.81 vs. 2.14 in the prior year. This was due to the absence of start-up costs and increased shipments of superphosphate rom the new Bonnie, Florida, phosphate chemical plant. For 1957-58, earnings will robably equal this experience with the new plant enlarging the earnings base. 25 mUlio ill be spent on the Saskatchewan potash mine and this should be in operation by late 1959. Over the longer term sales should continue to grow at close to the past rate they more than doubled since 1949). Earnings in recent years ha've not kept pace with ales growth due largely to higher depreciation costs, but it is now believed that nonash charges are ample. From a technical point of view, the stock has formed a subtantial base in the 26-32 range. An upside breakout would indicate a possible 46. WTamb EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not. nnd under no circumstance'll IS to be cOnstrued as. an offer to s;cll 01 a soliCitation to buy Rny referred to herem The mformatlon ('nlnlfled herein IS not gullranteed as to aecuracy or and the thereof l'l not, un. undel flO Circumstances IS to be construed as, a. I cprescnta- (wn by 'Vn!ston & Co Inc All expressIOns of opmion are subJect W change without notll;c 'alston & Co, Jnc. and Officers, DlrectoJ'fl, Stockholders and thereof, !cll and may hine In Interest m the SCCUritles mentIOned herem Thl' market letter IS intended and presented merely as n gcnenll, IIIfl mn! commentary on dny to day market news nnd not nl a complete nnalysl.s Addlbonnl Ulfotmntlon With respe('l to sccurltleb referred to helCIn will he r111 m..,hc,d upon request. \\– 301

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