Viewing Month: August 1958

Tabell’s Market Letter – August 01, 1958

Tabell’s Market Letter – August 01, 1958

Tabell's Market Letter - August 01, 1958
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,——————————————————————– NEW YORK Walston &CO. Inc Members New York Stock Exchange SAN FRANCISCO lOS ANGELES PHILADELPHIA' OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER August 1, 1958 There are several very general observations that might be made about the stock market at this stage. Basically, these observations are just abuut the same as those made a couple of months ago. The first observation is that the market is in a broad ac- cumulation area. By that I mean that stocks are slowly and gradually passing out of trading circulation and into the hands of institutions and individuals that are holding for long term investment and growth, and not for trading purposes. This process may be a lengthy one and will be interrupted several times by declining markets. The net result will be a broad trading area in the averages for a year or more. The eventual penetra- tion of this area will be on the upside. The second observation is that developments in – -East have -probablymoved-this -broad-accumulation-area-to 'a'higher plateau. For the twenty months between January, 1956 and August, 1957, the Dow-Jones Indus- trial Average held in an area bounded by 460-525. When the average broke below this area to reach 417 in October, it appeared that the initial advance from the low would meet heavy overhead supply of stock in the lower part of the 460-525 area, and would halt at around the 480 level. Prior to the Middle East development, the June high was 482.11 and the July high was 483.76. Subsequent events have accelerated the improve- ment in business from the April-May lows and have advanced the business time-table by several months. In the stock market, these events have probably advanced the over- head supply to the upper part of 460-525 area, instead of the lower part. This week's high was 508.39. It also has probably advanced the lower range of the projected ac- cumulation area from 440 to 460-470, with a net result that the market can be expected to range between 500-520 on the high side and 470-460 on the low side for the foresee- able future. ' Another observation is very obvious. The price ac 1 n . ivtdual groups and issues will be quite different from that of the gen1Ja j t as by the averages. Various groups are at different stages of the accu u ion pat Some may break out on the upside in the comparatively Ie ers may take considerably m'tin to dov,'op. Th' moves oetween issues in a group. c,p' 'd oCd',,' 0 s i ude issues that are much further advanced in their This th f E in a broad tradi a ' rv io t'that if the market averages are to remain . move in either direction, it might be wise to ignore the avera on the outlook for individual issues. This has proved wise in the st …. 111 probably continue to prove wise in the future. Further- more, if the average main in a trading range for the foreseeable future, the market leaders, which are e averages, will also remain in a trading range. For example, the old stock of Bethlehem Steel which was split 4-for-1 in early 1957, remained in a narrow trading range between 45 and 60 for the entire three-year period between 1951 and 1953. Its ultimate penetration out of this accumulation area resulted in a price level equivalent to 200. It is entirely possible that Bethlehem Steel could repeat this performance and remain in a broad trading area for the present stock of, let us say, 35 and 50. This could result in some excellent trading opportunities for the individual who is not concerned about short term capital gains. If the averages and the leaders are to remain in trading areas for the foresee- able future, probably the best long term profit opportunities will be found in off beat situations. This letter attempts to recommend issues that might show above average profits for holding-periods.of..sixcmonthsyor longer. ZENITH-RADIO was-originally- – . admitted to my recommended list at about 60 and is now selling at over 90. WILSON & CO. is another example. Originally recommended at 15 in December, it has moved up to 25 and still,' in my opinion, has further upside possibilities. As a final 0 bservation, it might be unwise to await a market decline to buy fun- damentally attractive issues, or for a further market advance to switch out of unattract- ive issues. In a broad trading area without a discernible major trend, individual issues quite often move in an opposite direction from the market for a good portion of the time. EDMUND W. TABELL WALSTON & CO. INC. market letter is not, and under no circumstances IS to be construed as, an offer to sell or n solicitatIOn to buy any securitIes referred to herem The mformatlOn contum(!d hetdn is not guaranteed as to accuracy or completeness and the furnishing thereof IS not, and under no cirCumstances IS to be construed as, a twn by \Valston & Co. Inc All expreSSIons of OpinIOn are subJect to chanRc Without notIce Walston & Co, Inc, and OffIcers, Directors, Stockholders and Employees thereof. purchase, sell and may have an mterest m the securitIes mentioned herein ThiS market letter IS mtended and presented merely as a general, mfurmnl commcr\tary on day to day market news and not as a complete analySIS AdditIOnal mfOlmahon With respect to any securitIes referred to herein WI!! be upon request \\-; 301

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Tabell’s Market Letter – August 08, 1958

Tabell’s Market Letter – August 08, 1958

Tabell's Market Letter - August 08, 1958
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Wdlston &Co. Inc Membej's New York Stock Exchange NEW YORK SAN FRANCISCO ' LOS ANGELES ' PHILADELPHIA OffiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER August B, 195B The market appears to be approaching a temporary climactic stage with heavy vol and a late tape combined with wide swings in the Dow-Jones Industrial Average for the we of 512. 27 followed by 500.32 and back to a new intra-day high of 513.47, followed by a cl of 510.13. Group rotation continues and virtually every group has now participated in th advance to at least some extent. Probably some temporary technical correction is needed on a short term basis. The first strong support area is the 4B5-4BO zone. The longer term picture remains the same. As stated in last week's letter, I belie the market is in a wide,accILmulation area bounded roughly.by the 500-520.range and the 4BO-460 range with the eventual penetration on the upside at some indeterminate time. Probably the market leaders will follow the same pattern as the averages and will offer some excellent trading opportunities. Selected secondary issues, however, could show su – tained strength while the general market remains in a trading area. My recommended list consists largely of specialty-type issue s for holding of six months or longer. Some profits have been taken, as noted in recent letters, on some of the defensive issues and in Raytheon at 33-35. I suggest profit-taking in capital apprecia- tion accounts in Carolina Power & Light, originally recommended at around 24 and now selling in the 32-33 range. It can continue to be held in long term investment accounts. For new purchases, I suggest a look at Hoffman Electronics (2B) which originally entered the list at around 22. It has backed away from its 29 5/B high and is near the strong 27- 25 support zone. Also, Wilson & Co. (241/2) despite its advance from 15 to 25, still indicates higher levels. It is, in my opinion, outstanding among the meat packing shares. International Minerals & Chemical (30 1'4) has shown recently, but has a potentially strong technical pattern an p relative strength toCbe an interesting speoilation at around current levels. Another issu l a s '1 r t y is United Biscuit (31 3/4). For income and eventual apprecia Ph' , ris (53 1/4) with a yield of 5.60/0 is an attractive purchase as is F ily anc l/B) with a slmilar yield. – — Foe issues, despite the fact that the grou . avoe -g,oup'''''' d'poctm,nt 0, p hc y liked in financial circles. A good part of the lack of ..!l.lcli)jably stems from the fact that depart- ent store stocks have one v y '1 for a long time and are considered a dull and lifeless r p. I S rkets, these issues have been quite dramatic. In the 1942-1946 e, some department store stocks advanced from 5000/0 to 20000/0, whil h Do ones Industrial Average gained 1290/0 during the same eriod. Of course, the ground was different in the 1942-1946 period than it is today nd no such percenta advance seems probable at this stage, but the group is slowly reaking out on the upside of a wide potential accumulation stage. The fundamentals would ppear to bear this out. Department store sales for the first six months are only 30/0 be- ow 1957. Considering the recession, this is an encouraging sign of continued high con- urn er buying power. In July, sales were close to the level of a year ago and further ains are expected as the year goes on. Most of the stocks in the group appear attractive, but my selection is Gimbel ros. Selling at 2B 1/2, the stock is paying a 40 quarterly dividend to yield 5 1/20/0. or the year ended January 31st, 195B earnings were 3.69, excluding capital gains of 3 a share. Earnings for the quarter ended April 30th were down to 26 as compared o 52 in the previous year, but the bulk of earnings are usually registered in the last wo quarters. The company operates ten Gimbel department stores, Saks-34th Street nd a chain of Saks-Fifth Avenue stores in leading shopping centers. The range on the tock since 1955 has been 31 1/ B high and 20 low. Ability to break out of this range on he upside would, from a technical point of view, indicate a good percentage advance. Despite their price advances, would continue to hold the remaining stocks in my recommended list, namely American Can (47), Anchor Hocking Glass (53 1/2), Container Corp. (233/4), Lily Tulip Cup (B6 1/4), National Gypsum (54 3/4), PanAmerican World Airways (18), and Zenith Radio (96 1/2). EDMUND W. TABELL WALSTON & CO. INC. Thl market letter I!, not und under no circumstances IS to be construed as, nn offer to sell or a 'lolicitnhon to buy Dny sc('untles referred to herein Th(! mformntJton hctctn IS not flS to uccurn('y or completeness fLnn the furnl,;hlnlol; thereof IS not. and under eM to twn h' \Vnh;ton & Co Inc All of OPinIOn are subJcct to chan!!e WIthout not ICC \Vnlston & o. nc. nn Icers. Ifec Ofq. c O l F 1 I'I'S thereof on fill Olllhcd lIPon request. sell and may ha.. e an Interest m the securIties mentIOned herem 'ThiS mnrket letter IS Intended and l)resented merely as a generix; . .to day market news and not as a complete nnalysls AdditIOnal mformatlOn With respect to any seCllfltJes referred to herein 301

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Tabell’s Market Letter – August 15, 1958

Tabell’s Market Letter – August 15, 1958

Tabell's Market Letter - August 15, 1958
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Walston &- Co. Inc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER August 15, 1958 The market reached its high for the week on Monday with both the Dow-Jones Indmtrials and Rails at new 1958 highs of 514.44 and 134.48. The market drifted lqwer durin the balance of the week with Friday's closing levels at 506.13 and 130. 22 The market n the first two weeks of August flattened out after the steep advance of the final two weeks 0 \\VJuly. The Industrials have held in the 514-500 range. A downside penetration 0 u 1 d indicate a further decline to the 485-480 level. This would result in a much needed technicf1 correction and place many individual issues at advantageous buying levels. \ The dog days of August are agam upon us and it would seem that the summ'er heat tends to bring about the same)evel of common stock prices-.,atJeast insQfar.Jis..the Dow- . . Jones Industrial Average is concerned. .. . . – -,'.- The Dow-Jones Average closed at 506.13. It was sellmg at approximately the same level in August a year ago and at around the same price in August, 1956. Approximately three years ago in September 1955 it sold around 490, or only 30/0 below present levels. At various times in the interim, market soothsayers have issued widely contrary opinions as to the future course of prices. The prophets of gloom and doom have predictec a decline to the 350-300 level. The optimists were convinced that the market was about to take off to unprecedented new .highs around 600-750. Neither set of prophets proved corr c It is, furthermore, unlikely that either the confirmed bull or the confirmed btar will find the type of market he is looking for over the next twelve months, for it is probable that a trading range market exactly like that which obtained for the past three years will continuE. Despite the fact that the market has moved sideways, the fortunes of individual in- vestors have been diverse, depending upon the stocks following table shows the closing price of two representat e s of the past four years (in this and other tables all p)'itnes Ii e e 7'11955 capitalization). tle period. The tlDAugust 15th in each c erted to reflect -'; 71;Stock 1957 1958 00' . On all of the the wa around the same level, yet while Texas Instruments was t 'p' P -Texas was lOSing over 800/0 of its 1955 value. Trends of' ed even within various industries. For example, in pthe chemical industr w ile n Mathieson and Allied Chemical were doing nothing, American Cyanamid vancing sharply – StocK Olin Mathieson Allied Chemical American Cyanamid -195-5 -195-6 58 1/4 59 107 1/4 109 573/8 73 1957 51 3/8 84 85 1958 36 1/8 88 98 1/4 Similar trend diversity could be found in practically every major industry represented on the New York Stock Exchange. Selected below are random examples from the steel and railroad groups – Stock -195-5 -195-6 -195-7 -195-8 Allegheny Ludlum 54 3/4 98 1/2 98 1/2 80 3/4 – — – , . U. S. Steel . – 52 – -65 1/4 67 1/4 70 3/8 – Colorado Fuel 28 1/4 31 3/8 29 1/2 20 1/2 Southern Railway Gulf, Mobile & Ohio 92 3/4 113 1/2 102 1/2 1117/8 37 1/4 33 1/4 27 1/4 , 19 1/4 The above figures serve only to prove something that this letter has maintained for a long time – namely that concentration on individual stock selections is far more fruit- ul than market predictlOn. EDMUND W. TAB ELL AWTamb WALSTON & CO. INC. Thl'l marke-t leiter IS not, find ufi,ler no Circumstance,; I to he 38, nn offer tnllell 01 n soll('ltatmn to buy an. '('C1lntles tefcrrcrf tu herem The mformatlon I'ontlllficd he-rem I' not J!l1urnntced a .. to aCC\l1 ncy or completeness and the furnlshmg thereof nut, and undel no I to be constl ued as, a II ,n by Walston &. Co Inc All CJLpre'SIOIIS of oplIllon arc subject to change \\Ithout notice Walston &. Co. Inc and Officers, Dlrcctors, Stockholdcrs an ;nploycl''' thelcof, sell amI may htl'c an mtclcst III the seCUTItles mentioned hClein ThiS market letter I Illtcmtieil and prescntcd mcreh a'l a j!cnerili. 111rl mill nmment.IrY 011 day tn dH) mnrket 11('\'9 (lnd not as n complete annlysls AddltlOJnnl InfOlmntlOn With to lin;. eel1\ltles referred to herem fUl nhhe,llllOn relluest 1i

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Tabell’s Market Letter – August 22, 1958

Tabell’s Market Letter – August 22, 1958

Tabell's Market Letter - August 22, 1958
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– Walston &Co. – – – – – I n c – Membe,. New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER August 22, 1958 Sparked by the landing of U. S. Marines in Lebanon, the Dow-Jones Industrial Av r age advanced forty points from 472.07 to 512.27 in the hfteen trading days from July 12th to August 1st. Since that time, the Industrials have held in a trading shelf. The range fo the past fifteen trading days has been 514.44 and 499.82. The question is whether this consolidating period is a prelude to a further advance and an attack at the 1956 higharoun the 525 level or whether the market has lost its upside momentum temporarily and needs a further techmcal correction. At the moment, indications would point to the probability of a support level. The leadership poor recentl 'with much of the volume concentrated on low-priced issues selling under 15 a share. Also, both the rail and utility averages have broken out on the downside of slmilar tradin ranges, although the rails have rallied back into the shelf. If the sidewise movement of the industnals since August 1st results in a downside breakout, there is more or less of a technical vacuum between 500 and 485-480 support area WhlCh was the top of the mid- June to mid-July trading range. Similar support areas exist at 123-120 in the Rail Aver- age and around 75 in the Utilities. Friday's close was 508. 28 on the Industrials, 132.96 on the Rails, and 78.03 on the Utllities, so it can be seen that I do not anticipate at the moment much more than a rather mild technical correction of the ten-month advance from the October lows. If it occurs, it would probably present buying opportunities in favored issues. If the breakout of the trading shelf is on the upside, probably the 520 -5 30 area in the Industrials and the 138-140 area in the Rails would bring out enough selling to halt any further immediate advance. The Utilities would meet selling, in my opinion, around 80. There is no denying the fact that the market ave a em;high in terms f present earning power and dividends. Based on 0 h igu ,the Dow-Jones Industrials' earnings are estimated at about 29. pa elve months. A price of 508 capitalizes earnings at 17.2 times. . h 14.6 times earnings at the 1950-high 9 – -In– -lso-,tne iifdusfrial aver-age – at present prices is yielding only e than that obtainable from AAA bonds. However, if t e i;, big name companies, there are quite a few companies h e eld up well during the recession and whose stock is still available a ea Yleld or better. The ten stocks listed below also of vorable technical pattern and the possibility of 250/0 or 500/0 e present levels. Latest Year Price Earn. Period Ended Latest Interim Earn. Comparable 1957 Interim Amer. Fgn Pr. Bond Stores Canada Dry Divco Wayne 17 18 19 15 2.03 2.09 1. 73 1. 75 Family Fin. 30 2.39 Gimbel ' 30 Gould Natl. Bat. 35 3.69 3.72 Great. West. Sugar 28 2.82 Philip Morris '' 53 4.50 United Artists 24 3.05 12/31/57 1. 73 7/31/57 1. 36 9/30/57 95 10/31/57 .77 6/30/57 1.69 1/31/58 3.42 4/30/58 .65 (E) 2/28/58 N.A. 12/31/57 2.13 12/31/57 .59 1. 60 1. 53 1. 06 .61 1. 78 3.76 90 N.A. 2.02 .53 -J,.- On my recommended list. Period 0/0 Yield 12 mos. March 6 mos.Jan. 9 mos.June 6 mos. April 5.9 6.9 5.3 5.3 9 mos. March 5.3 12 mos. April 5. 3… 3 mos.July 5.7 6 mos. June 5.7 5.7 3 mos. March 6.7 EDMUND W. TAB ELL WALSTON & CO. INC. Thl'! mnrk(l letter ); not and undel no Circumstances IS to be con;.trued \11 oITer to sell 01 a sohuf.atlon to bu)' any to herem The mfrmatlOli I'nntlllncd hel('1n I nul U.lr!llltCE'd ll'l to ,lc!urm.)' r and the thereof IS nul, anti undel no Cllcumstances lS to bc constlued as, n rCllre,,-entn- li'HI hy \Vnlton & Co Inr All expre551Om, uf OPlUlon nrc 'luhJcct to change \'llhout notlre Wal;ton & Co, Inc, and Officer, DnectOIS, Stockholders and EmplH'c thel c(Jf. 11urrhae, eli and may ha\e an Interest III the seCUrities mentIOned hel eln Thl; market letter IS Intcndc.1 '\111 pre;ent('(l mel ely as n gene! al. II1fUlmnl ,(lmmclltnlv on .IIY tu .hy m,uket ncws and 1I0t as n complete nn,lb';I Addllll)lUil JllfOlmatlon lth lC!lj'cd to lillY refellcl\ tn hClCln wdl h( flllill-lhod UpOIl re'l\lest \\), 301

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Tabell’s Market Letter – August 29, 1958

Tabell’s Market Letter – August 29, 1958

Tabell's Market Letter - August 29, 1958
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NEW YORK W—d-l-sItnocn.-&-C–o-. Memben New York Stock EXchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO fABELL'S MARKET LETTER August 29, 1958 The Dow-Jones Industrials have now held in a relatively narrow trading shelf for twenty trading days. The high during this period has been 514.44 and the low 499.82. For a time this week it appeared that the breakout would be on the upside. The Industrials advanced for seven consecutive days, but managed to reach a high of only 513.33 on Wednesday. The subsequent dip carried down to 505.60 on Friday, but the market closed above the low of the day at 508.63. The Industrials during the month of August have made three successive tops at A12. 27and.5L4. 44-and. 513. 33. on this -a.possibletriple top pattern. About the same pattern prevails in the Rail average with comparable tops at 134.37 and 134.48, and 134.42,and a low of 128.10. If the averages sell below the August lows, it would indicate that the trading shelf of the past twenty trading days has been a distributional top. It is also interesting to note that the uptrend lines connecting the various lows since the April lows of 437.25 on the Industrials and 100.00 on the Rails now stand at approximately 500 and 129.50. A downside penetration of these uptrend lines would also be bearish for the nearer term. Unless the averages reach a new high early in September, they will move below the uptrend lines which are, of course, slowly moving higher. A failure to follow this uptrend line into new territory in the next two weeks would indicate a loss of the strong upside momentum which has pre- vailed since April. It appears that the market will witness an important test of the price structure in the first two weeks of September. Ability to break area on the up- side would indicate a continued desire by the investor and p c a rdio acquire common stocks. A failure to reach new high territory t t e a technical correction and probably a lengthy consolidating h vance is resumed. A possible clue to the direction of the next -This averagehasnotonly br-oken out the Utility average. ide,o' -ewlhtrading-ar-ea, but-has- . – -. also broken its uptrend line from nlike the other two averages, it has failed to rally in the a new low since June during the past week. Whether the pro e ac . n ll' is due solely to the decline in the bond market, or whether i t indIO indicating a decline in the general mar- ket, is still prob aw cor ion when, as and if it occurs, should be relatively mild. There is a support Ie at around the 485-480 level in the Industrials, and 123-120 level in the Rails. nless the potential tops already formed broaden considerably, that is about all that is indicated on the downside. It is my opinion that the market is in a broad accumulation area between roughly 525 and 460 and any general market weakness should be used to acquire recommended issues. A number of the issues in my recommended list reached new high territory for 1957 and 1958 during the past several days. Included in this category are WILSON & CO. (257/8) which reached a high of 271/2, FAMILY FINANCE (30 5/8) at a high of 31, GIMBEL BROS. (30 3/8) at a new high of 31 1/2, HOFFMAN ELECTRONICS (307/8) at a new high of 307/8, LILY TULIP (86 5/8) at a high of 88, and ZENITH RADIO (951/2) at a high of 97 7/8. All of these issues have been reaching ne.Y' high territory quite consistently, but a welcome addition to TIONAL MINERALS AND CHEMICAL (32), a stock which has tried my patience qUlte some hme. International Minerals fmally broke out on the upside of the long 26-31 range in which It has held since late 1956. The stock reached 32 and now has a strong techmcal pattern. I have suggested profit-takmg on several other Issues in the list over the past several weeks, so my recommended list (last reviewed on August 8th) is relatively small. I mtend to add to It during periods of market weakness. EDMUND W. TABELL l,u.. Is5TOJT ie CO, lWe, Thl' mnrhet letter IS not, nnd under no Circumstances is to be COn'ltrued HS, nn offer to sell or n sohcIlation to buy any !';CCUrltIC'I referred to herem The infOrmatIOn ,'ont,uncd hel em IS not g'ullrantcei as to accuracy or completeness and the furnlshln).!' thereof 1'1 not, and under no cireumstances is to be construed as, II, rcpresenta. tum by Walston & Co, lnc All expressIOns of OPInion are subject to chllnlie \\Ithout notice. Walston & Co, Inc, and Officers, Directors, Stockholders and Emlluyees thereof, purchasc, scll and mlly have an mterest m the IccuritlCS mentioned herem ThiS market letter IS mtended and presented merely as Il general, 1ll!1)1 mill ('fmmentar) on dny to ,Iny market news and not us a complete AddltlOnni mlormntlon with lespcd to any seCUritIes referred to hcrcm Will be upon N 301

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