Viewing Month: December 1958

Tabell’s Market Letter – December 05, 1958

Tabell’s Market Letter – December 05, 1958

Tabell's Market Letter - December 05, 1958
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NEW YORK Walston &- Co. Inc Membe's New Y01'/c Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER December 5, 1958 The price range for the week held within a relatively narrow trading area of less thc ten pOints in the Dow-Jones Industrial average as contrasted with the thirty-point swing down and up again in the previous week. As far as general market action is concerned, the November high and low of 572.05 and 538.43 are the points to watch for indications of the nearby trend. An upside penetration would indicate a continued uptrend to the 600 1 and a downside penetration would, from a technical viewpoint, indicate a decline to the 525-520 support level. Friday's close was 556.75. It is possible that with the cross cur- tax !he .will remain the durin/J t..!..!e- malnder of December and not break out of the pattern until early next year when some of- the present uncertainties,like automobile sales, are clarified. Individual issues still have constructive patterns and a new stock is being added to my recommended list. ROHR AIRCRAFT CORP Current Price Current Dividend Current Yield 36 1. 40 4 stock 3.9 The aircraft industry is one of the fastest expanding sectors of our economy. Despite this fact, many pitfalls await the investor Long Term Debt Common Stock Sales, 1958 (2) Earned Per. Sh. 1958 (2) 8,100,500 (I) 940,078 shs. 147,538,056 4.28 who purchases any of the major airframe corrpanies. Due to their heavy commitments to the defense program, with its accompanying instability, earnings in this sector of the in- dustry are Rohr Ai ra t fluctuations. rorer, is protected Mkt. Range 1958-54 37 1/2 – 191/4 Includes7, Debentures – mto common at-28.. in compa ;- e a a' t e vagaries. The ri' a duct is the power jet op-jet and air- rnanufacture of-thls-power– – (2) Fiscal Year Ends July 31st. company is furnished the air- W Aiitt' engine and certain engine accessories and adds the Since the compan sIt cellation of contr a 0 ready for installation on the wing. t a' lrframe producers, it is less vulnerable to cane Qucer. In addition, its 245 million backlog is now 60 composed of co rei usiness, thus giving it representation in tis fast growing segment of the aircraft' ustry and further protecting it from defense spending fluctua- tions. Rohr manufactures power packages for many of the major planes now in use in- cluding the Boeing 707, Lockheed Electra, the Convair 880 and, in the military field, the Boeing 52-G and the Lockheed C-130-B. In addition to power packages, Rohr manu- factures structural panels of honeycomb sandwich stainless steel, which it has patented and developed. The company is one of the largest users of titanium and maintains an extensive research department working on new metallurgical techniques. Rohr has also recently moved into the field of noise suppressors and thrust reversers for jet engines. The reader will recall the recent controversies between jet manufacturers and airports and the resultant requirements that noise suppressors be installed. Rohr now manufac- tures the Boeing-designed nois.e suppr.e.ssor for the. 707 andhas designed its own up- pressor which is now undergoing tests. Rohr's long term record is one of continued growth. The company earned 4.28 per share in the fiscal year ended July 31,1958 on sales of 147 million. In 1951,net was only 1.07 on sales of 26 million. Earnings have increased in every year since 1951 with one exception. Despite this growth record, and future potential, the current market marks Rohr common at less than nine times 1958 earnings of 4.28. There is some potential dilution from convertible debentures outstand ing, but on a fully converted basis the company would have earned some 3.50,making the adjusted multiple just 10. From a technical viewpoint, the stock has broken out of a long 35-20 range. The stock appears to have a long term potential above 60, with downside support at the 33-30 level. Both the common and convertible debentures are recommended for pur- chase. EDMUND W TARE!'!' AWWl-aJitUb.1S not, and under no CIrcumstances IS 10 he con;truw as, on offer referred to herem The InformatIOn (nnt'UIl('.1 hel('In 15 not J.l'unrnntced us to accurnc or completeness ..Ind the furnishing thereof IS not. and undc! no Clrcumstanccs is to be construed liS a rcpresentn e'l.thlll 'Y & Co JnL, All exprcllions of opmlOn lIe subJcct to \\Ithu\lt nutltc W,II;ton &. Inc, and Off!cne, DIrectors, and ,1ll1,uy,c-l thClcof, pUlch,le, sellnnd may havc an mterest In the l,curltlCq mcntuJncd herein 'lh!,. mark('t letter IS Intended and prelented merely as a general. lllrmmnl commentnry 011 dn' to dn m,lrket news and not as II complete nnnhsh AddltlnnailllforrnatlOn lth Icspeet to any securitIes referred to herem WIll be fUI lipan request \\ 301

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Tabell’s Market Letter – December 19, 1958

Tabell’s Market Letter – December 19, 1958

Tabell's Market Letter - December 19, 1958
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f – ' – – ' Walston &Co. In.c. Members New Y01'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND ABROAD TABELL'S MARKET LETTER December 19,1958 The Dow-Jones Industrial average moved ahead throughout most of last week, and on Friday touched a new high of 577.90. Thus, the trading range in which the market had held for nearly a month, was penetrated on the upside, affording a technical potential of 600. Whether this level will be reached before the end of the year is problematical, as undoubtedly many stocks which advanced sharply in 1958 will be candidate s for selling after December 24th, when profits can be reported on 1959 tax returns. Conversely, however, many stocks which have done little or nothing during the latter half of 1958 may be relieved of tax loss pressure after the first of the year. One such group is the oils, – –', 33'/0 above its April low this week,thcr Index of oil shares was only 18 above the April low. In general, the oils have been poor holdings during most of 1958. From a technical pOint of view, however, a long period of sideways action often indicates accumulation and a sizeable upside potential. Such, we believe, is the case with most oil stocks, and with the international oils in particular. There is nothing basically wrong with the oil industry. It is, indeed, one of the great growth industries of our time. Oil as a commodity has a long history of stable yet improving prices, and for the inflation-conscious investor, oil in the ground is probably the best inflation hedge available. That this opinion is held by most profession- al investment managers is evidenced by the fact that oil shar es constitute the largest single industry group holding of most major investment companies. Why then the lack- luster performances turned in to date The answer dates back to the Suez crisis of 1956. During this period, in order to fill the Middle East gap, western Hemisphere sharply. With I';\ the reopening of Suez in the following spring, p du reluctant to cut back output and inventories piled up, the which commenced in the latter half of 1957. This in o(most a r vat y the recession picture caused sharp with j – -that 1958 earnings will show pickup in busmess, however, rently low, gasoline stocks -t e – mparisons. With the general' ti s ring rapidly. Crude stocks are cur- e minimum, and in general the inventory \ picture is as good aJ ii h s t ' e nder this stimulus, second half earnings for most oil co s should show Which oil stoc'! s ar e iderably better than those of 1957, and 1959 most attractive It is the feeling of this letter that with f a few notable cue large international oil companies represent the best value ( in the industry. Volllmes of statistics can be cited to show the advantages of large oil reserves outside the United States. Oil in the Mi'ddle East and in Venezuela is infinitely eheaper to find than is the case in the U. S. where no major oil field has been discovered \ since 1953. Foreign oil serves a market – Western Europe – which is expected to increasje twice as fast as the U S. market due to strides yet to be made in industrialization. In the face of these excellent growth prospects many of the stocks are still available at well year under fifteen times average earnings, this year's depress as compared with a endineeaterneinngPsIEanrdatciloo se on to ten the D times threeow-Jones Ind us- trial average. This statistical cheapness appears to make the international oils candi- dates to be among the outstanding market .'performers of 1959. In terms of specific issues,four international companies are on our recommended list. Gulf Oil (127), RoyaL Dutch .(48); Shell Transport (21),and Others which appear at- '1-, tractive are Standard Oil of California (59), Socony Mobil (48), Atlantic Refining (44), Monterey Oil (37), Pacific Petroleum (18), Barber Oil (57), and the Getty group, (Mission Corp. (41) and Mission Development (21) and Tidewater (23). It is believed that the performances of the oil group in general and the above mentioned equities, in particular, can be outstanding in 1959 with possible short term improvement as tax loss pressure is removed. Purchase is recommended in investment accounts. A VERY MERRY CHRISTMAS TO ALL AWTamb EDMUND W. TABELL WAJ,STON & CO INC ThIS mnrket letter IS not. and under no Circumstances lS to be construed as, nn offer to sell or II, aohcltntlon to buy lny secuTlties referred to ,herem The mformatlon contamed herein IS not guaranteed as to accuracy or complcuness and the thereof lS not. and under no Clrcumstanccs 1S to be construed as, n representa- tion by & Co. Inc All expressIons of OPlnJon are subject to change WIthout notice Walston & Co, Inc, and OffIcers, DIrectors, Stockholders and Fmployees thereof purchase eel! and rna have an mterest III the sccurltles mentioned hcrem ThIS market lettcr IS Illtcnded and presented merely as a gen(!rnl, furDH.hed on day to day market news and not as n complete anaiYSl!; request . AddItIonal mformatlOn v.ith respect to any seCUfltJ–e–s.1r(!ferred to hcrem will W)/ be

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Tabell’s Market Letter – December 24, 1958

Tabell’s Market Letter – December 24, 1958

Tabell's Market Letter - December 24, 1958 page 1
Tabell's Market Letter - December 24, 1958 page 2
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, Walston &Co. / —–Inc. —-Membe,'s New York Stock Excoonge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND ABROAD TABELL'S MARKET LETTER December 24, 1958 It has been the custom of thIS letter to devote each year's last issue to a forecast of the probable trend of the stock market in the twelve months ahead. At this time, both technical and fundamental factors seem to pOint to one conclusion 1959 will see a continuatlOn of the long term bull market upswing which began in 1949, commenced its final phase in October, 1957, and which will ultimately carry the market to considerably higher levels. I 1- Price movements, over a period of time, both long and short term, quite often take place m five phases, or waves, three up and two down in the case of an upward movement, and three downwaves and two upwaves in the case of a downward ad- justment. Hindsight tells us that the current advance began in 1949 with the first upward wave from 1949 to 1951. This was followed by a second correctionary wave from 1951 to 1953, a third, or advancing cycle, from 1953 to 1956, with a fourth or corrective cycle from 1956 to 1957. With the market in new high ground, it now appears that we are in the fifth and final phase of this upward movement. This is confirmed by other technical data. After reaching its low last October, the market formed a base with an upsIde indication above 500. The normal expectation would have been for the Dow-Jones Industrial average to halt somewhere in the heavy overhead supply which existed between 480 and 520 and aocumulation area before breaking through into new high ground. ThifH,t di ot .dQ0)Ins ad, the upswing carried through into new high terntory with sat' of the advance. Now that new highs have been reached, it appears en' trading area in which ' the heldfrm 1956 Ulltil recel1tlY . of higher levels. This is confirmed rt patterns of over 1300 indi- vidual issues. In a ses have been formed or are in the process of I sizeable upside potentials. In addit, fl' Ight-line character of the advance, long term techmcal work sho s n mterior vulnerability. A market which has advanced as sharply as this on ha always vulnerable to flash corrections such as the one which occurred in N ber. It is impossible at this point, however, to foresee any decline of serious magnitude. From a fundamental pOint of VIew, it is also possible to justify higher prices. The market is, it is true, selling at a record PiE ratio — if the past twelve months' earnings are used as a criterion. It must be remembered, however, that these results were attained m the depths of the recession and a sharp improvement appears inevitable. It becomes more and more probable that 1959 WIll see greatly increased earnings for the Dow-Jones Industrial average — perhaps equalling or bettering the record 36.08 of 1957. Indeed, it is not at all difficult to visualize earnings of 50 on the Dow in 19611962. Such earnings would call for nothing more than an extrapolation of the long term growth trend which PFevailed m Jhe years 194.7-) Giyen .J.D.eaIringe, ,,-.pzice I earning ratio of 15 would result inJ. price of 750, and a ratio of 18 would result in a price of 900. However, as this letter has stressed for many years, individual stock selection is far more important than trying to guess the averages. As has been mentioned above, we seem to be in the fifth and final phase of a long upward cycle. Such a phase often tends to be the most dynamic with secondary and tertiary stocks coming to the forefront. Some of this type of action has already been seen, with low-pnced stocks participating in the advance for the first time since 1946. Many stocks, some specula- tive, some high-grade companies which have been overlooked, which have done little \1 \ ./l 1 \C l ThiS market letter IS not. Rnd under no Clrcumstnnces lS to be construed as, nn offer to Bell or n solicItation to buy an) secuntlCs referred to herem The mformatl(\n contained herein IS not guaranteed Be to accuracy or completeness and the thereof IS not, and under no circumstances IS to be construed as, R rcpre-;entR- tlOn by Walston & Co, Inc All expressions of oPlOion are subJect to chnnge Without notice. Walston & Co, Inc, and Offlcenl. Directors, Stockholders and Employees thereof, purchase, mformal commentnry on dny sell and may have an mterest In the secUrities to day market news and not ns a complete mentioned herem ThIS market letter is mtended AdrhtlOnnl informatIOn WIth respect to any saencdurpitrieessenretefedrrmederetolyhaesreamge….nmerable, furnished upon r e q u e s t ' 301

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