Viewing Month: September 1959

Tabell’s Market Letter – September 04, 1959

Tabell’s Market Letter – September 04, 1959

Tabell's Market Letter - September 04, 1959
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W—-a–l-s-tIoncn–&—C-o. Membere N e,v York Stock Exchange FIL NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER September 4, 1959 With Labor Day at hand, it appears appropriate to review my thoughts on the general stock market pattern for the foreseeable future. It must be borne in mind, however, that, under present investor psychology, the price actlOn of an individual issue may show little relationship to the general market averages. As I have stated in this letter before, I believe the stock market is on the third and final phase of the major advance that started in June, 1949 from a low of 160 in the Dow-Jones Industrial average. Such major advances usually occur in three phases. The first phase was from 1949 to 1952 when the Industrial average advanced 840/0 in forty-two months, phase was the advance from the September, 1953low of 254;-36to' the April, 1956 high of 524.37. This 1060/0 advance was accomplished m thirty-one month The present advancing phase started in October, 1957 at 416.15. The high so far was reached August 3rd at 683.90, This is an advance of 640/0 in twenty-one months and quite a bit less than the scope and time of the two preceding advances. As mentioned in my letter of March 6th, a study of the fourteen major upswings since 1885 indicate that the average time duration was thirty months and the average percentage advance was 1110/0. Whether the present advance will be below or aGove average is, of course, not ascertain- able, but, if the advance reached its peak at the August 3rd hIgh of 683.90, it would be the smallest percentage advance since the turn of the century and, from a timmg view- pOint, just about equal to the two shortest upswings since the same time period. Usually, the final phase of a major advance is the most dynamic of three phases, so it would ap- pear logical to expect that the high of the move has not yet been reached. The business pattern would seem to bear this out. We seem to be in the middle, or just past the middle, stage of a cyclical upswing in business, 0 . When we come to the nearer term pattern, p'c u e as clear. The In- dustrial average has declined from the 683,90 highl9-.;uP1\ decline of only about 6 1/20/0. Whether the correctiQl, tIC ow of 639.34, a – low at that point; or whether a,further correction IS orsas(l).the duration.ef, the steel strike, (2) the money 3 h chev's visit and the peace scare .There is a support level at 6 Q dustrial average and another at 600-580, A normal entire advance from the October, 1957 low would a de l i 2t ' Industrial avera c0 , t'he top already formed on my graph of the e August 19th low of 639.34 would indicate a fur- ther dip to about 6 w e penetration of the 174-157 range in which the rail average has held sin t 'rst of the year would indicate a further decline to about 143. To summari or the longer term it is my belief that the market will some time later this year or early next year move above the August highs, It will depend on news developments whether the advance will start from the level of the August 19th low, or whether a further correction is needed. Of course, individual stocks and groups may have quite different patterns than that of the averages. The paper group, for example, is shOwing excellent relative strength. On our recommended list, as a speculation in this group,is GREAT NORTH- ERN PAPER (53 1/2) Great Northern, the largest newsprint maker in the United States, appears slowly to be recovering from a host of difficulties encountered in the past two to three years. A disastrous hydro-electric year in 1957 coincided with a dramatic shift from a seller's to a buyer's market 'in newsprint This- shift took place just as-the company ha-d 0 completed a major capital improvement program, Net result was that per-share earn- ings plummeted from 5.44 in 1956 to 29 last year. Cash flow dipped from 12.70 per share to 7.22. The dividend was slashed from 3.00 to the current 60. The prIce of the stock plummeted from 108 1/2 in 1956 to a 1958 low of 37. Smce that time, the stock has held in the 37-61 range and an upside penetration of this range would indicate 137-146. Earning power is slowly improving and 1.50- 1. 75 will probably be earned in 1959, with a cash flow of about 8.00. A return to 1956 levels, or higher, appears possible over the next few years. Dow-Jones Ind. 652.15 EDMUND W. TAB ELL WALSTON & CO INC, tJIGi;W';n'Jkcal1M IS to be construed /lS, an offer to sell or a soliCitatIOn to buy any securltles referred to herein The mformntJOD contamed herein II!! not g\Hlranteed as to accuracy or completeness nnd the furnishing thercof IS not, and under no Circumstances IS to be construed as, a representa- tion b WRIston & Co, lnc All expressIOns of opimon arc subJect to change without notice Walston & Co, Inc, and Officers, Directors, Stockholders and t.hereof, purchase, sell and may have an mterest In th sCurltles mentIOned herein This market letter IS mtendc'li and presented merely as n general. Informal commentnry on day to day market news and not as a complete analYSIS AddItional mformahon With respect to any 'lecurltles referred to herein will be furlllsheri upon request \VN 301

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Tabell’s Market Letter – September 11, 1959

Tabell’s Market Letter – September 11, 1959

Tabell's Market Letter - September 11, 1959
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– — – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – . Walston &- Co.– Inc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFF-ICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER September 11, 1959 After declining on the first four days of the week and reaching a new low at 630.45, market rallied on Friday, reaching a high of 641. 33. The Rail average, having reached a low of 153.78 on Thursday, carne back to a peak level of 156.91 the followmg day. As noted in last week's letter, the downside breakouts on both the Rail and averages indicate that lower levels are a possibility. Possible downside potentials would be 620 on the Industrials and 143 on the Rails. The longer term pattern,however, indi- cates that selected stocks are probably buys on any further weakness rather than sales at this time. . As.always;, the performance. ofindividual issues i,sJarmore fluctua tions in the averages. One way of gauging the probable future market performance of a stock is by the use of relative strength measurements. These measurements, very plot the price of a stock in relation to a given market average in an effort to find stocks which are performing better than the market. Frcm time to time, this letter has published elementary relative strength tabulations based on the price levels at V-.UCIU low points in the Dow-Jones Industrials. Such a tabulation follows. Llsted below are all the stocks on the New Yprk Stock Ex change which, at their low on Thursday, September 10th, were 50/0 or more above their low of Wednesday, August 19th. This is in contrast, of course, to the Dow-Jones a which, on Thursday, was 1 1/2 below its August bottom. A logical expectation, of course, is that the strength shown by these stocks in a poor market can well continue when the market turns stronger Stock Aug. 19, 1959 Low Reeves Bros. 23 1/2 American Motors 40 5/8 Ruppert 11 Conde Nast McLean Trucking Consolo Studebaker-Packard Reynolds Metals 9 3/8 8 1/2. -\'\\ 1 – \). \Y /'W! 'Wy o 8 \ – Carpenter Ste International Si Stanley Warner White Dental Litton Industries r 3 1/4 43 3/4 32 1/4 40 103 101 47 1/2 34 7/8 43 1/4 111 1/4 Mercantile Stores Stevens,J .P. West Indies Sugar Vick Chemical Ward Industries Bliss & Laughlin Fairmcnt Foods Brooklyn Uion Gas Oxford Paper Boeing Air Cluett-HealJody Douglas Air. McKesson & Robbins Peabody Coal Youngstown Sheet & Tube Curtiss-Wright Federal Mogul United Airlines Wheeling Steel Gladding McBean Madison Square Garden 33 1/4 35 7/8 281/2 30 3/4 35 1/2 38 1/4 131 1/2 141 1/2 9 7/8 10 5/8 27 1/2 29 3/8 33 1/4 35 1/2 54 3/4 58 1/4 32 34 30 1/2 32 3/8 7./8. .,-. .- 55,.,.. 44 46 1/2 38 40 1/8 15 1/2 131 3/4 16 3/8 139 28 1/8 295/8 623/4 66 36 1/2 38 3/8 585/8 61 5/8 20 21 15 15 3/4 Advance o 27.1 27.0 18.2 16.0 14.7 12.4 12.4 10.7 10.6 9.5 8.6 8.1 8.1 8.0 7.9 7.9 7.7 7.6 7.6 6.8 6.8 6.4 6.3 6.1 B..0…-.. 5.7 5.6 5.6 5.5 5.3 5.2 5.1 5.1 5.0 5.0 AWTamb Thi.s cnntntii'et1 hon !Ke IS nOl guIaRrnn as t; EDI\MLiUiHNPDNOW. TABELL .llf; CO Il1i C -mformatton01racy' 9f IS to be construed as, an offer to sci&X0J completeness and the fUrnIshmg thereof too1 hon is not, and under an slcun les fcfcrred no circumstances is to be to herem construed The as, n rellresenta- i!!)Hnlon are subJect to wltllout notice Walston & Co, lnc, and OffIcers, Directors, Stockholder Dnd 8e a.nd an interest In the securities mentioned herein ThiS market letter IS Intended and prescnted merely ns a gcneral, mformal commentnry on day to day market not as a complete nnaiysl; Additional information With respect to any seeurltles referred to h!rcin Will he furl1lshed upon request. WN 301

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Tabell’s Market Letter – September 18, 1959

Tabell’s Market Letter – September 18, 1959

Tabell's Market Letter - September 18, 1959
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Walston &- Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OffiCES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER September 18,1959 The present technical pattern in the stock market is perhaps best explained by r – quoting my letter of two weeks ago. When we come to the nearer term pattern, the picture is not as clear. The In- dustrial average has declined from the 683.90 high to an August 19th low of 639.34, a de- cline of only about 6 1/2/0. Whether the correction reached its low at that pOint,or wheth r a further correction is needed, depends on such factors as (1) the duration of the steel strike, (2) the money situation, and (3) Khrushchev's visit and the' peace scare' There is a support level at 640 to 620 in the Industrial average and another at 600-580. A norma ofOtheentire advance- fr'Offith'e October, 1957'low woulnndicate ade – cline to 590. From the top already formed on my graph of the Industrial average, a de- cline below the August 19th low of 639.34 would indicate a further dip to about 620. A downside of the 174-157 range in which the Rail average has held since the first of the year would indicate a further decline to about 143. Since the above was written, both averages have broken the August 19th lows and the intermediate term trend has been signalled down. Today's intra-day lows were 621. 9 on the Dow-Jones Industrials, and 151.20 on the Rail average. Just what low will be reac before the market turns depends on news developments in the three factors mentioned abo namely, the steel strike, tight money and Khrushchev. At today's low, the Industrials had just about reached the first support level of 620. A favorable turn in the news could result in at least a trading rally. However, as yet, there is no indication of a change in the intermediate term trend. For the longer term, I do not believe the market reached its long term high at the August 3rd high of 683.90. The present downward oPJinion, is an inter- mediate term downtrend that will reach its low e 6 and 580. After a consolidating period, the advance will be resumed us approached, and eventually penetrated in early 1960. Because of elopments, it is unlikely that a- new-high – be a-lance of-195 9-, – – — Highs and lows in an e ve things when applied to highs and lows in individual issues. ones Industrials, at present levels, are 47/0 above the Octo er 1 0 'i6f\e stock in the average, U. S. Steel, is 1000/0 higher. Another sto n II i erage, United Aircraft, is actually six points or 14/0 lower th 't erage was at its 1957 low. This selectivity will con- tinue as the final s eft oad advance that started in 1949 is approached. At the mom nt e groups that are showing the best relative strength include paper, steels, alu ms, soft drinks, and some automobiles. These groups could be among the leaders when the advance is resumed. However, there are also other groups that could show strength. The aircraft manufacturers have been in a private bear market of their own since May. At present levels, most downside objectives have been reached and the group appears oversold. NORTHROP (263/8) has probably been hurt by liquidation of the convertible bonds held on bank loans. The stock appears very reason- ably priced at current levels. 68/0 of the company's backlog is in missiles, drones, electronics and space technology, and only 32/0 in manned aircraft. The company ex- pects an increasing percentage of business in electronics over the years. Earnings for the year ended July 31,1959 will be released shortly and are expected to be around 4.00 a share. This is a price-to-earnings ratio of sOIQe 6 1/2 times earnings and.appears ver low when compared to P / E ratios of 30 to 60 times earnings in many small electronics companies. FANSTEEL METALLURGICAL (58 1/8) appears attractive technically. It shows indications of attempting 1;0 emerge from the broad 64-42 range in which it has held for almost three years. Other issues that I like around current levels, or on price dips, include AMERIC VISCOSE (43 7/8), CLUETT PEABODY (54 7/8), GREAT NORTHERN PAPER (51 1/2), SINGER MANUFACTURING (49 1/2) and WEST VIRGINIA PULP & PAPER (48 1/4), In the lower-priced issues I like INTERNATIONAL PACKERS (16 1/2) and KAISER INDUST (155/8). Dow-Jones Industnals ultajJ..s 78 E'lDI-AMLUSN'f'DONWI.lt TCAO.BHEJLCL. IS to be construed as, an offer to sell or a sohcitntlOn to buy any securities referred to herem The mformnbon eontnmed hel em IS not guaranteed M to accuracy or I'ompleteness and the furnlshmg thereof IS not, and under no Circumstances IS to be construed liS, a representa- tion by Walston & Co. Inc All e(preSSllms of opmlon are subJcct to chanlte Without notice Wnlston & Co, Inc, and Officers. Dlrectors, Stockholders nnd Employees thereof, purchase, sell nnd may hnvc an intcrC'lt III the '1ecuTibes mentioned herem ThiS market letter IS mtended nnd presented mcr('ly as a general. mformal commentary on day to day market ne\l.5 and not as a complete analYSIS Additional mformatlon With respect to nny securities referred to herem Will be furm;hcd upon r e q u e s t ' WN Jot

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Tabell’s Market Letter – September 25, 1959

Tabell’s Market Letter – September 25, 1959

Tabell's Market Letter - September 25, 1959
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—-'- – .., Walston &Co. —–Inc —– Members New YO'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER September 25,1959 The market bottomed out on Wednesday after reaching lows of 613.30 on the Dow- Jones Industrials, and 149.12 on the Rails. The recovery was sharp with the Industrials in two days regaining approximately one-third of the 70-point decline from the August 3r high of 683.90. Whether the intermediate term downtrend which has been effect since early August reached its low this week is not yet certain. Many individual issues reache their downside objectives. Others have downside potentials somewhat below this week's lows. The Industrial average declined a bit below its first support level of 620, but the whole area between 610 and 585 is a support zone. The Rails did not reach their down- . sig.e potential of 145.-.143. Normal technical action would.require a,testing.of ,this.week's lows shortly. If the lows hold, the intermediate trend will be reversed. It must be remembered that the advance that started in early 1958 has reached a mature stage and is, therefore, subject to wide price swings./When a major advance starts, the initial move is usually a straight line advance with only small and quick re- actions. In this initial move, almost the entire market participates. There are only a few backward groups. It usually takes about fifteen months to complete this initial upwar surge. After that timeyeriod is reached, the market becomes more selective and price swings become wider/This letter on several occasions since the first of the year has co pared this market to the 1953-1957 rise. During that major upswing, the Dow-Jones In- dustrial average advanced from 254 in September, 1953 to 524 in April, 1956. This was an advance of 1060/0 in thirty-one months. The initial upswing lasted from September, 1953 until March, 1955, with the Industrial average advancing from 254 to 421, or 650/0, in seventeen months, with only quick and short corrections of 50/0 or less. From that point on, although the averages continued on to new the price swings became wider and the market mOfiE! sel c iv over a year late, 8 decline took place in March 1955, and a 10.80/0 decline in a reached its actual high in the averages in April 1956 at 524.37, but w out equalled in August, 1956 and June 1957 at 523.33 and 523.11. kp'fj 6 and June 1957 there were Ulree more wIde pdc-e-'swings – therewere- five wide price swings the iriitial upward phase of the 1953-19 move ended,and June, 1957 e e decline started. The in e et started in April, 1958. From then until Augus 3rd, when the a Q 683.90 high, there were only small, quick reactions During this fifteen 0 hs Q the market advanced 630/0. This compares quite closely with the initial 1953 19 pswing of 650/0 in seventeen months. The decline from August 3rd to Wednesday, ember 23rd, was 70 points, or roughly 100/0. This is the first decline of intermediate term significance since the advance started. Of the five declines that occurred in the 1955-1957 period, three were somewhat larger than the present de- cline, and two were somewhat smaller. This letter made a somewhat similar comparison to the above in the May 8th, 19 letter. The conclusions drawn five months ago apply today — so I am repeating them be 0 Significantly, the same signs have begun to manifest themselves. For the past t weeks, declines have outnumbered advances. For the week ended May 4th,122 new 1959 lows were posted. If the similarity continues, what type of market action may be expecte Probably, something on the order of the following 1. The averages will continue on into new high ground. 2. However, wider swingswill take place, and broader corrections than those experienced so far may be expected. 3. It will still be possible to achieve capital gains in selected issues, but the num r of issues in uptrends will be decidedly smaller. 4. The number of stocks acting poorly will increase sharply. It would thus appear that the time again has come to separate the men from the b Losses will become more prevalent, and stock selection will again be the sine qua non 0 investment success. Dow-Jones Industrials – 632.59 Dow-Jones Rails – 154.25 EDMUND W. TABELL WALSTON & CO. INC. ThiS markct letter is not, and under no circumstances IS to be construed 85, an offer to sell or a soliCitation to buy any securities referred to herem The Informntion contmned herem Is not guarnntced as to accuracy or completeness and the furnishIng thereof IS not, and under no Circumstances IS to be construed as, a tlOn by Wnlston & Co, Inc All expressIons of oplDlOn are subJect to change WIthout notIce. Walston & Co, Inc, and Offlcers, DIrectors, Stockholders and Rmployecs thereof, purchllse, sell and may have Iln Interest 111 the securities mentlOned herein ThiS mnrkC't letter IS intended and presented merely as a general, informal commentnry on day to mllrket news Bnd not as a complete analYSIS AddltJonnl Information VI Jth respect to an) securitIes referred to herein wJlI be furnished upon r e q u e s t ' \\'N 301

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