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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