Viewing Month: August 1959

Tabell’s Market Letter – August 07, 1959

Tabell’s Market Letter – August 07, 1959

Tabell's Market Letter - August 07, 1959 page 1
Tabell's Market Letter - August 07, 1959 page 2
Tabell's Market Letter - August 07, 1959 page 3
View Text Version (OCR)

Walston &Co. —–Inc, —– Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OffiCES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 7, 1959 Since January, 1955, this letter has been following the fortunes of four groups of twenty stocks in an effort to determine the character of the stock market. ,The in- troduction to the first such compilation, made four and one-half years ago, read as follows Few people realize how diverse the action of the market has been over recent years. Regardless of the fact that the Dow-Jones Industrial average has advanced for over five years with just a few minor interruptions, the action of various types of,securities has been,quite, different. ' Manyholders,shQw.JQsses…on indj.yidual,secu;.. arities despite the fact that the general market has been in broad advance since — – 1949. As always, it has been dangerous to buy the wrong securities at the wrong time. In the main, it has definitely paid to own quality issues over recent years. The following compilation may be of interest. It presupposes an investment of 100,000 in four different groups of stocks at the 1946 highs. The first group is composed of twenty growth issues and presupposes an investment of 5000 each in such growth companies as Dow Chemical, Corning Glass, I. B. M. ,etc. The second group is composed of twenty stocks of investment quality. It was selected from the twenty favored issues of 130 Common Trust Funds of leading trust companies. It includes such issues as General Motors, Standard of New Jersey, General Electric, National Dairy, Sears Roebuck, etc. The third group consists of good quality dividend- paying issues a bit below the investment quality of the second group. It consists of issues hke Allied Stores, Allis Chalmers, Babcock & Wilcox, National Gypsum, etc. The fourth group consists of lower-priced, more It comprises the twenty most actively traded issues in 1953 at ou or ower. It in- cludes the issues in which the general public like Armour, Avco, International Telephone, New '\ill \ 'Cola, etc. It c 'sts of issue,s Cent ,Pennsylvania, Pepsi- the sions drawn period are rather obvious. Growth Issue Investment Issu MedlUm-Gra ssues Low-Priced Issues High 100,000 100,000 100,000 100,000 1949 Low 85,403 69,932 47,520 30,095 1956-57 High 660,301 318,144 206,524 88,111 It can be seen that the growth issues outperformed all the others by a wide margtn both in the 1946-49 bear market and the 1949-1957 bull market, Next best performer In both markets was the Investment group, followed by the Medium-Grade portfolio. The Low-priced speculative issues 'Jere, of course, the worst performers, losing more than two-thirds of their value at the 1949 low and never recovering their 1946 value even at the 1956-57 highs. Since that time, however, relative performance has been somewhat differant and conclllsions are not quite so easy to draw. The following table sh3.wS the perform- ance of each group since the 1956-57 hIgh. Adv. Adv. 1956-57 HIgh 1957 Low Decline 1956-7' 1957 Lo 1956-57 High- Value Hlgh To 1957 Low 8/6/59 To Date Date Growth Issues 660,301 392,086 41 747,198 13 91 Investment Issues 318, 144 220,409 31 331,729 4 51 Medium-Grade Issues 206,524 110,201 47 184,480 (-11) 68 Low-Pnced Issues 88, 111 44,948 49 121,550 38 170 — This malket lette contmned herein r Ie is not, and under not guaranteed a no circumsta s to accuracy nces or c oISmtpolebteenceosnssatrnude d as. an offer to sell or the furnishing thereof a sohcltatu)n to buy IS not, and under no any securities referred circumstances IS to be to herem construed The Information as, a representa- tlon by Walston & Co. Inc. All eXprellBIOnS of opinIon nre subJeet to change WIthout notlce Walston & Co. Inc. and Officers, Stockholders and Employt!es thereof, purchase, sell and may have an Interest III the securities mentIoned herein ThiS market letter IS mbended 4nd presented merely as a general, mformal commentary on day to day market news and not as n complete analysIs AdditIOnal lllformntion with respect to any securities referred to herem Will be furnishM upon r e q u e s t ' WN 301 – -2- The first fact to be noted was that the performance of the four groups m the 1957 correction was somewhat dlfferent from their action in the 1946-49 bear market. In 1957, the Investment -Grade group declined far less than dld the 'growth issues, dropping only 310/0 vs. a fairly high 41/0 drop for the growth equities. Also, the Medium and LDw -priced portfolios, while losing almost 500/0 of their value, did not fare as badly relatlve to the other groups as they had in 1946-49. The most striking difference appear s, however, when the study is brought up to date. The relative performance of the Growth group has again improved with this portfoho having advanced 910/0 in value from the 1957 low to date, vs. a 510/0 advance for the Investment group. Thus, the Growth stocks are now 130/0 above their 1956-57 highs and the Investment group only 40/0 above those highs. The MediumGrade portfolio, while it has advanced 680/0 from the 1957 low is, however, still the only group of the four below its 1956-57 high. It is in the Low -Priced portfolio that the real change in performance has taken place. This portfolio has adanced 1700/0 from its 1957 low, the best performance of any of the four groups in the study. It is now 380/0 above the 1956-57 high, a better performance in this respect also than any of the 3.other groups.Significantly, for the flrst time since this study has begun, the value of the portfoho has risen above the origmal 100,000 invested in 1946. This seems to be graphlc proof of a theory often advanced by thlS letter namely that we are m the final stages of a bull market and that one of the characteristics of this stage is an advance in low-pnced, speculative securities. For the first time since 1946, these issues have enjoyed a worthwhile advance and many of them appear npe for further gains. Indeed, since there as yet has been no sign of a major top developing for stocks in general, these issues still constitute good investment medla for the agile trader. The longer term investor, however, had best note that the same group of stocks lost almost 700/0 of their value in the three years following 1946 and that the mvestor in these stocks at their highs waited twelve years to recoup his origmal investment. AWTamb EDMUND W. TAB ELL WALSTON & CO. INC. Dow-Jones Industrials – 668.57 Dow-Jones Rails – 164.45 NOTE The actual flgures in thlS study are slightly dlfferent than those in prevlOus studies due to refmement of a few statistlcal inaccuracies in the previous data. The general trends and conclusions drawn are the same, however. The names of the issues m each of the four groups, together with the number of sha res owned based on the present capitalization may be obtained at your nearest Walston office. EWT – – -…… filECOPV The following are the stocks mentioned in the Tabell Market Letter of August 7, 1959, together with the number of shares which would be owned as of this date, adjusting for all stock dividends, split-ups and capital changes since 1946 GROWTH ISSUES 769 Aluminium, Ltd. 217 Amerada 178 Carrier 312 Corning Glass 388 Dow Chemical 86 DuPont 512 EI Paso Nat! Gas 333 Goodrich 234 Intern'l Bus.Mach. 291 Minn. Honeywell 689 Minn. Mining 263 Monsanto 357 National Lead 280 Owens Corning 188 Pfizer 258 Radio Corp. 193 Rohm & Haas 360 Scott Paper 263 Shell Oil 120 Union Carbide INVESTMENT ISSUES 192 American Can 314 Amer. Cyanamid 86 DuPont 287 General Electric 178 General Foods 373 General Motors 172 Gulf Oil MEDIUM-GRADE ISSUES 78 Allied Stores 159 Allis Chalme rs 645 Babcock & Wilcox 184 Blaw-Knox 197 Bucyrus-Erie 229 Burroughs 116 Cham Belt 178 Johns Manville 82 Kennecott 221 National Dairy 86 Penney, J. C. 277 Phillips Pete 307 Sears Roebuck 333 Socony Mobil 260 Clevite Corp. 100 Crane Co. 166 Distillers Corp. 83 Carrier (1) 294 Joy Mfg. 286 Lowenstein 408 Mead Corp. 384 Stand. Oil Calif. 200 Stand. Oil Indiana 416 Stand. Oil of N.J. 333 Texas Company 120 Union Carbide 125 Westinghouse Elec. 183 National Gypsum 72 New York Air Brake 571 Penn-Dixie Cement 131 Rheem Mfg. 122 Gen'l Tel. & Electron.(2) 213 Yale & Towne LOW-PRICED ISSUES 251 Amer. Airlines 296 Armour 348 Avco 165 Balt. & Ohio 259 Canada Dry 333 Columbia Gas 555 Em erson Radio 90 Gimbel 159 Intern'l Tel & Tel (61 Loew's,Inc. )(3) (61 Loew's Theatres) 211 Mack Truck 139 N. Y. Central 172 Pan-Amero W.A. 105 Pennsylvania RR 123 Pepsi-Cola 216 Raytheon 253 Rexall Drug 205 Servel 125 Spiegel 195 Studebaker – Packard( 4) (1). Exchanged for ongmal holdmg of Elliott Co. (2) Exchanged for original holding of Sylvania Elec. (3) Exchanged for onginal holdmg of Loew' s, Inc. (4) Exchanged for origmal holding of Studebaker. Edmund W. Tabell Walston & Co. Inc.

Download PDF

Tabell’s Market Letter – August 14, 1959

Tabell’s Market Letter – August 14, 1959

Tabell's Market Letter - August 14, 1959
View Text Version (OCR)

fiLE COpy Walston &Co. Members Ne1lJ York Stock Exchange NEW YORK SAN FRANCISCO lOS ANGELES PHILADELPHIA CHICAGO OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 14, 1959 After breaking sharply to a low of 647.93 on Monday, the Dow-Jon.es Industrials held above this figure for the remainder of the week. Indications point to another re- accumulation period, during which time selection of individual stocks will be important. We are, therefore, reprinting below our entire recommended list with the exception of two issues under prospectus. Two issues, American Can and Philip Morris, have been dropped from the list due to poor relative strength action, along with Gulf Oil for which Union Oil of California was substituted on July 2nd. recommendation is 10. Average profit in the three dropped issues from time of '' Three new additions are being made. The market action orth-e paper 'stocks has improved sharply and two equities in this group are being added to the list WEST VIRGINIA PULP & PAPER (50) ,which appears to have the widest techmcal potential of any of the major companies, and GREAT NORTHERN PAPER (57) as a speculation on earnings recovery. The improved outlook for the dlstllling industry has resulted In better market action for this group also. Accordingly, SCHENLEY INDUSTRIES (43) down from Its 1958 high of 48 1/8, is being added to our list. Recom. Price Current Price Advice American Viscose 52 50 Buy-Hold. Strong support at 50-45 Butler Bros. Chicago, Mil., St. Paul, Pac. 39 26 39 Hold for 50-50. 27 Buy-Hold for substantial potential. Cluett Peabody 47 54 Buy-Hold for long term. Coca-Cola Consolidation Coal Dayton Rubber Fansteel Metallurgical 141 36 32 60 155 very favorable. 39 32 f,rJtB.eu H or igh was 50 1/2. technical pattern. 59 1\ buil' up strong potential base Getty Oil 28 , Great Northern Paper 57 Heinz, H.J. 55 BKaiser Magnavox Min. & Chem.s\, 0)Y 0 W Monsanto National Distillers 27 Newport News Shipb mg 47 (\)0 57 63 53 32 42 but appears Ne\v recommendation.' Action continues favorable. Slow but good potential base. In strong, long term uptrend. Has an 85 -1 00 technical potential. Buy-Hold. Group is strong. Buy-Hold. Good solid issue. Disappointing, but should improve. . Northwest Airlines Pennsalt Chemical Rohr Aircraft 38 35 My favorite airline issue. 23 30 One of strongest in chemical group 24 19 Acting poorly, but at strong suppor . Royal Dutch Schenley Industries 48 45 Appears undervalued. 43 43 Buy-Hold. New recommendation. Shell Transport Singer Mfg. Union Oil of California U. S. Foil B West Virginia Pulp & Paper Westinghouse Electric Wilson & Co. 22 48 50 50 49 88 15 21 55 50 63 49 9g. 42 ., Appears undervalued. Buy-Hold. Very favorable pattern. Interesting upside potential. In strong, long term uptrend. Buy-Hold. New recommendation. Buy-Hold. Long term potential 165. -Still indicates higner levels. LOW-PRICED LIST Avco Rec. Price Current Price 9 14 Hotel Corp. PRriecce. '/ CPurircreent '/ Chemway 11 13 Intern'l Packers 15 17 Curtis Publishing 15 12 Kaiser Ind. 15 17 Decca Records 18 19 National Can 14 9 Diveo-Wayne 17 25 Oliver Corp. 19 19 Fedders Corp. Freuhauf Trailer IEethe Oil l'z 6f16 B 19 17 aQ 18 25 19 Pete Pubhcker Ind. t!18 11 1115 11 This market letter is not, nnd no circum'!tances IS to be construed us, un offer to sell or a 1t.eQy rred crem The mfo tIon ctlo6nntltlflinferdwhlelr!eJmnl nCotog, uInnrcnntAcelld as to accuracy e..press1ons of or completeness oplnlon nrc aubJect the to furniShtn change ahe) rle\o.lffiIlSaan\o;tiltafnadWunnd'Ie'r no clrcu.trstf\nees IS to be construed OffIcers, Directors, as, a represen1;,a Stockholders and Ehtpytyets tfrereo purch CftlIl1'l!!IJ.W'y.pn ase, oo.y 1Sell05atn! d muy have a )Oar.'ftuneW'B n mte am,! n rc ot st a In sa the seeuntle'S mentIOn complete analySIS WmnrtcettettCrSIntended and merely ns a general, l7.r et securIties referred to herem will be I)I;' WNJOI

Download PDF

Tabell’s Market Letter – August 21, 1959

Tabell’s Market Letter – August 21, 1959

Tabell's Market Letter - August 21, 1959
View Text Version (OCR)

Walston &- Inc. Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVeRSEAS TABELL'S MARKET LETTER August 21, 1959 A selling wave on Wednesday carried both averages below the August 10th intra day lows of 647.93 on the Dow-Jones Industrials, and 160.79 on the Rails. This week's intra-day lows were 639.34 and 157.60. The subsequent recovery brought the averages back to 655.39 and 163.20 at Friday's close. The action of the Industrial average see s to be following normal technical procedure. There is strong support at the 640-630 level. From mid-April until the end of June the Industrials held in a trading area between 648 and 611. The various tops of this ten-week trading range, excluding the absolute top at 648.65, were between 640.92 and 630.24 and this week's low was within these support levels. The Rail pattern is quite different. At this week's low of 157.60, the Rails were practiZally atthe year's low of -157; 20 reached in February. This action contrasts with this week's low of 639.34 in the Industrials, which is some 68 points or 100/0 above the February low of 571. 73. The Rails have been marking time for seven months in the 174-157 range. A prolongation of the steel strike much beyond Labor Day could quite adversely effect rail earnings and could cause a downside penetration of the long trading area. This, from a technical viewpoint, would indicate a decline to about 143. Of course, on the other hand, ability to hold above 157 would be quite constructive and indicate an advance to at least the 185-190 level. The timing of the ending of the steel strike will determine the intermediate term course of the Rail average. It has been the thought of this letter that the market would consolidate during July and August and then start an advance in September that would carry through for the balance of the year. Nothing has happened in the technical pattern, as yet, to change this opinion. One thing that could cause a temporary weakening of the technical pattern would be the prolongation of the steel strike to a point result in a serious squeeze on consumers. This probably would not s the strike lasted beyond September. As this possibility appears to ote eel that selected issues should be bought during periods of market w a ess fo x months or longer holdmg. – Ift- arket;,, Some-stocks have – -.. probably seen their highs for a orne, but not all, of the aircrafts and electronics probably . They can rally from present levels, but will need long peri la . n to build new patterns before a sizable ad- vance is indicat There a nr , however, that indicate higher levels before this final phase of the 10 ter dvance is completed. Among the groups that still indicate higher levels are the iles. AMERICAN VISCOSE (48 7/8) is on my recommended list and I believe it as had a sufficient technical correction from its recent high of 55 3/8. The aluminums also appear to be in an uptrend that should carry further. I continue to like KAISER ALUMINUM (58 1/4) and U.S.FOIL (67 1/4). The paper issues appear to be on the verge of an upside breakout of long trading areas. WEST VIRGINIA PULP (49 1/4) appears most interesting. Its 500/0 interest in Clupak, the extensible paper, adds to its potentials. CLUETT,PEABODY (521/2), which holds the remaining 500/0 interest in Clupak and has a much smaller capitalization, is also on my recommend- ed list. Another paper company with an interesting upside potential is GREAT NOR THE PAPER (54). This is the largest newsprint company in the United States and the fifth largest on the Continent. It appears to have been under slow accumulation since late 1957. The.meat packing group, with the prospect of improving profit margins, continues to indicate higher levels. Most issues in this group look higher. My choice has been WILSON & CO. (45 1/4), originally recommended at 15. INTERNATIONAL PACKERS (16 3/41, while quite speculative, has a tremendous upside potential. Other issues showin above average relative strength include COCA COLA (152 1/2), FANSTEEL METALLUR GICAL (59 3/4), MONSANTO CHEMICAL (52 3/8 NATIONAL DISTILLERS (30 5/8), PEN SANT CHE1IIlICAL (31 1/2), SCHENLEY INDUSTRIES (44 3/4), SINGER MFG. (54 1/2) and WESTINGHOUSE ELECTRIC (89 1/2). EDMUND W. TABELL Dow-Jones Ind. 655.39 WALSTON & CO. INC. Dow-Jones Rails 163.20 market letter IS not. and under no circumstances IS to be construed as, nn offer to sell or a sohcltation to buy any securities referred to herem The mformntIon contnined herem IS not guaranteed as to nCCUracy or completeness and the furnishmg thereof IS not, and under no Clrcumswnces is to be construed as, n representa- tIon by Walston & Co. Inc All expressIOns of optOlon are subject to ChallR'e WIthout notIce Walston & Co, Inc, nnd Officers, Directors, Stockholders and Employees thereof, purchase, sell and may ha\'e nn mterest in the secuntles mentioned herem ThiS market letter IS mtended and presented merely as a general, mformal commentary on day to day market news and not as a complete analYSIS Additional mformatlon With respect to any secuntIes referred to herem will furnished upon r e q u e s t . ' \\-; 301

Download PDF

Tabell’s Market Letter – August 28, 1959

Tabell’s Market Letter – August 28, 1959

Tabell's Market Letter - August 28, 1959
View Text Version (OCR)

– Walston &Co. Inc fiLE COPY Membe,'s New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 28, 1959 The market moved a bit higher during the week on relatively small volume, but the most constructive technical feature was a slow strengthening in my graphs of volume, advances and declines and new highs and lows. On my ten-week mewing averages, for example, advancing stocks are beginning to catch up to the number of st()cltEt declining. Continuance of this trend for a week or two more, with restricted price Hl'..JV''' ment in the averages, would be most encouraging. Statistics Current Price Current Dividend Current Yield '—AMERICAN VISCOSE CORPORATION– 46 2.00 4.3 Since its original recommendation by this letter at 52 3/8 a month ago, VISCOSE reached a new high at 55 3 8, subsequently reacted to a low of 45 5/8 on Common Stock Sales – 1959-E Sales – 1958 5,098,377 shs. 375,000,000 310,000,000 Friday, presumably affected by DuPont's announcement of lower prices for nylon cord. Close analysis of the DuPont price cuts indicates that their effect on American Earn.per sh. 1959-E 6.50 Viscose may be of little importance and the Earn.per sh. 1958 2.70 Market Range -1959 55 3/8 – 37 stock appears to be an outstanding buy on the current weakness. American Viscose earning power is Note Sales and earnings figures include fold. The company itself is America's equity in unconsolidated subsidiaries. largest and secondlarg prodw;,er 0 el Due in no small measure to non-recurring expenses, net was y i 8 to 1.36 per sha This year operations have improved sharply, with ear n the first half and a net of 3.25 -3. 50 projectedfor-the full year. r -probably– comes from cellophane, which market as the trend fo, conve- nience packaging continues. rO' Parent-company s \Y story, however. The giant Chemstrand Corporation, jointly 0 0 hemical, reported record sales for the first half of 1959. A r e ' uity in the earnings of Chernstrand and another sub- sidiary, Ketchika u , were equal to 1. 61 per American Viscose share, should reach 3.25 r t 11 year. Thus, American Viscose consolidated net earning power is 6.50, giv' e stock a pIE ratio of 7. Why the DuPont announcement should have caused weakness in American Viscose difficult to analyze. There is, fi rst of all, no certainty that the price cuts will have any effect whatever on rayon's share of the tire cord market. Since commitments for 1960- model autos are already made, it will in any case have no effect before 1961. Further- more, since Chernstrand is the second largest producer of nylon, its increased earnings should more than compensate for any loss to the parent company. Most significant, is that at current prices,American Viscose is selling at only eleven to twelve times eaTn,t mgs of Chernstrand and the cellophane division. In this connection, it is interesting to that recent prIces mark DuPont, its only major competitor in these fieldS, at 30 times ea.rnlihf's Avisco's low pIE ratio is especially unusual considering the company's excellent growth prospects. Chemstrand has increaseds-ales from 106 million in 1955 to an antici pated 220 million m 1959, with continuation of the growth trend in prospect. Cellophane production continues to strain at capacity and a new addition which will increase capacity 50 is now in operation. Furthermore, a new joint venture with Sun Oil Company, Avi Corporation, will shortly go into production of polypropylene, a new plastic material which is expected to supplant polyethylene in many applications. At current prices, the stock has reacted to a strong technical support level and yields 4.3'70 on the recently increased 2.00 dividend. Technical objective is still 65 followed by a long term 120. The stock is again recommended for purchase. Dow-Jones Ind. 663.06 Dow-Jones Rails 163.49 EDMUND W. TABELL WALSTON & CO. INC. II! not, and under no Circumstances IS to be construed 115, an offer to sell or n sohcltatlon to buy any secUrities referred to herem The mformatlOn cnntnlned herein IS not guarnnteed as to accuracy or completeness and the furnishing thereof IS not, and under no Clrcum!!tancea lS to be construed as, a representa- tIon by Walston & Co, Inc All expreSSIOn!! of oplnlon are subject to chanj'!e WIthout notice Walston & Co, Inc, and Officers, Directors, Stockholders and IIlrormal thereof, purchllse, commentary on day tsoeldl aayndmmarakyethanvewe sana Interest In nd not as a the SecUritlCS mentIoned herem ThiS market letter IS mtenrled complete analysIs Additional mformatlOn With respect to Ilny and presented merely as n general, securities referred to herem wIiI be furnlshed upon r e q u e s t ' \\'N 301

Download PDF