Viewing Month: October 1959

Tabell’s Market Letter – October 01, 1959

Tabell’s Market Letter – October 01, 1959

Tabell's Market Letter - October 01, 1959
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FILE 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 October 1, 1959 After rallying back to the first overhead supply area around 640, the Dow-Jones Industrials declined to 625.40 on Thursday. The important points to watch are the rally high of 643.60 and last week's low of 613.30. Ability to better this week's high would indicate a reversal of the intermediate downtrend in effect since early August. A decline below 613.30 would indicate a continuation of the downtrend to the 610-585 level. Of all the growth products of our time, few have enjoyed a steadier increase in use than has aluminum. Consumption has increased sharply over the past two decades, and major producers expect U. S. demand for the metal to approach 4 million tons in the mid-1960s, versus just over 1 1/2 million to'ns in-r958 – , – ,- – —0– — Despite this rosy picture, however, the price road for aluminum stocks has not always been smooth. After topping in 1956, most aluminum equities dropped sharply from their highs, and at 1957 bear market lows, major companies had lost over half their market value. The reason for the decline was two-fold. High P /E ratios discounted growth too many years in advance and the 1957-58 recession hit aluminum demand sharply. Mean- while, SUbstantial capacity increases came on stream just as demand was lessening. A two-cent price cut, the first since 1941, was put into effect and the situation was aggravated by Russian dumping on world markets. Earnings plummeted and stock prices dipped even more sharply. With the worst corporate news in years flooding the financial press, aluminum stock prices held around their 1957 lows and, from a technical point of view, built up substantial bases. Stocks of three of the four major companies broke out of these bases on the upside in 1958, indicating substantially higher \'thich have not, as iOSyet, been reached even though prices have higher levels can be supported by fundamental industry, among which are the following i\. '/) a l'acveedw.ththaitnththeese Th-e possibility-of a price rise -topre-1958-prices.'-(M-r. – Khrushchev's emphasis of trade in ns lends credence to the opinion that Ru(2s)siaun. dumping may S. capaci!y suff e (// nctW\\ftfrther increases in demand without capital as capac1ty 1S r (Y–Y fixed-cost industry, profits increase sharply (3) g largely capital costs are relatively immune to further inflation. -I (4) The shar Increased demand picture referring to above. Two of the three major U. S. aluminum producers are on our recommended list. KAISER ALUMINUM (58 3/8) earned 72t; in the first half, vs. 66t;, and net could ap- proach 1.75 for 1959. As capacity is attained, further increases appear in prospect for 1960 and 1961. Participation in REYNOLDS METALS can be achieved through U. S. FOIL B (67), al holding company which has behind each share 88/100ths of a share of Reynolds Metals. For many years, this stock has sold at a rather deep discount from Reynolds, butas the price improves, this discount could well narrow, thus further ex- panding the appreciation potential. Technically, objectives are 75-125 for Kaiser and 105 for U. S. Foil B. A third aluminum equity which mayhaye specialattraction oyer the very long term is ALUMINIUM,LIMITED (34 1/4), the huge Canadian ingot producer. This com- pany has numerous problems, including vulnerability to foreign competition and low current sales as a percent of capacity. As a result, recent earnings have shown little improvement. However, this company will increase capacity in the next few years more than any of the American companies. If demand increases at the rate projected into the 1960s, the earnings growth could be truly substantial. In keeping with the fundamental picture, Aluminium, Ltd. has not yet broken out of the base formed in 1957-59 between 27 and 39. Ability to reach new highs, however, could mean an eventual upside poten- tial of 65 -80. AWTamb EDMUND W. TABELL WALSTON & CO. INC. to be construed as, an offer to sell or a sollcltation w buy any securities referred to helein The information -rlQtOlnetl-hcWl);l oxrifJ lu h llCfUARCY or completeness nnd the furm'lhmg thcrro( is not, lind under 110 Circumstances IS to be construed AS, fi representn. of omnlon are sublCd to chltnge Without ootlce Wnlston & Co, Inc, and OfflceI', Directors, Stockholders nnd EmplDyees thereof, rmrchase, sell and may hale an mterest in the securltiCl mentIOned httrem ThiS market letter IS mtended and presented merl!ly as a general, mformal commentary on dny to day market news and not as a complete anah'sls Additional mformatlon with respect to any secuntlCS referred to herem wdl he furnished IIpon request. \\ N 301

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Tabell’s Market Letter – October 09, 1959

Tabell’s Market Letter – October 09, 1959

Tabell's Market Letter - October 09, 1959
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W—-a–l–s-tInocn.–&—-C-o. Fit Membe1's New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 9, 1959 THE ELECTRIC STORAGE BATTERY COMPANY Statistics The most widely used commodity in Ameri Price 54 today is not wheat, or steel, but a force called Dividend 2.00 energy. Every productive process in the world, Yield 3. 70/0 with the exception of elementary hand labor, uses Long Term Debt 3,238,355 Common Stock 1,655,577 shs. -Earn. perShare1959-E' 3;!0 Earn. per Share 1958 2.38 Sales, 1959-E Sales, 1958 140,000,000 127,600,000 this commodity. Thus, when an important revolution in the use of energy takes place, it is logical that it should have extensive economic ramificatio Such- a revolution,-iCse'ems, is Ii-ow just'be-ginning It involves the more extensive use of electric ene g produced directly by a chemical reaction. A device for producing electricity by such Mkt.Range 1959-56 55 1/2-25 1/2 means, called a battery, is familiar to every Am r ican. Very simply, a battery uses a chemical re- action to produce electrical energy. Present batteries, even though some can be recharge become used up in time and must then be discarded. However, a new type of cell is just n coming to the fore. This is the fuel cell with much higher watt-power in which two chemic elements are mixed in the presence of other chemicals in order to produce continuous electrical energy. As long as fuel continues to be fed to such a cell, it will produce elec- tricity indefinitely. With the advent of the much more powerful fuel cell, and with vast im provements taking place in storage batteries, both in lengthening of life and shortening of recharging time, it seems more and more probable that energy users will turn to electri energy as a source of power. One example which comes possibility of a re vival of the electric automobile which is now in act pil t y a number of co – panies. Such autos, it is felt by many analysts, cofSci!en y ate as efficiently an conveniently as gasoline powered cars, with maintebnae co raction of that of an inte nal combustion nd,tuel,cells.suggestthem- selves to the active mind. Electric Storage Batt C V, ' he two major companies available to investors, most of who e e batteries. It manufactures a complete line of batteries running r ry cell batteries, produced by its recently ac- quired Ray-O- Va; automobile storage batteries, heavy industrial bat- teries, to giant bat i sus 'n submarines. In addition, the company maintains what i probably the oldest and gest research facility on packaged power in the world. This re search has enabled ctric Storage Battery to stay in the vanguard of new developments taking place in the battery indu stry. ' Both earnings and profit margins have been erratic in recent years, but extensive realignment of operations appears to have put the company on the road to increased profits. The replacement cycle on automobile batteries, long the bane of the industry, now seems to be turning favorable, with recently-installed batteries having a slightly lesser life than did previous units. Sales potential is further enhanced by the growing proportion of higher priced 12-volt units now in use. Since a large proportion of Electric Storage Battery's sales are for replacement, the battery life cycle and the number of cars on the road, rather than new auto sales, are the most important determinants of profits. Continued growth is foreseen in the auto battery market, as '\\'ell as long-term earn ings enhancement due to the development of new types of batteries and fuel cells. Ent irel apart from the battery field, a new porous plastic developed in the course of ESB resear is now being produced by ESB-Reeves Corporation, formed jointly with Reeves Bros. Inc. This material repels liquids but allows vapors to penetrate and can be used in a wide va- riety of applications ranging from rainwear and surgical dressings to artificial human or 1959 sales should show a considerable improvement over the 127 million of 1958, with first-half receipts showing a 1610/0 advance over the previous year. Per share earning in the first six months were 1. 44 vs. 94; in 1958. For the full year they could reach 3.5 a share compared with 2.38 last year. Current 2.00 dividend provides a 3.70/0 yield an dividends have been paid consecutively in every year since 1901. The stock's technical pa tern has an intermediate term objective of 75 followed by a long term 112, with support at 45.It is i'eCOlll1I1enc'led fa! PUI chase iII 1011g terlll ihucBtraeht aee8I1fl'l;s. ThlB mn)ket lotte) hC'Cl1LIS IBnontogt,uaanradnutenedderasnoto accuracy o\J\'l)j'YQmCO& Co. Inc All expressIOns of or coISmtpol opinion be construe eteness and are subJect d !lB, an offer to Bell or n to the to fcuhramngsehln\\gIththoeurtoonfoItSicneot,HMM.1SI)tti;WJi.I…iilT !Ab,mp!oyees thereof, purchnsc, Bell and a have an interest In the sccurlties mentIOned herem news an1 not as n complete annlYBlf, Additional mformMon w\ I 0 y CUfV;t! I oc n nd r C\!J.Ej to any SCCU,I les The Informabon as, a rellresenta. Stockholders and merely as a genera to herem will \\oN 301 s.

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Tabell’s Market Letter – October 16, 1959

Tabell’s Market Letter – October 16, 1959

Tabell's Market Letter - October 16, 1959
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, ! J W—a-lIsntocn.-&– Co. Members New York Stock EXchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFJCES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 16, 1959 After backing and filling the first three days of the week, the Dow-Jones Industrial average rallied sharply and, at its intra-day high of 646.53 on Friday, penetrated the rally high of 643.60. Ability to better this high indicates a reversal of the downtrend in effect since early August. Resumption of the uptrend will not mean automatic profits for many investors, however. Unfortunately, many buyers of equities, in the belief that the stock market moves as a unit, have been too inclined slavishly to hold stocks where technical and fund mental work has indicated that prospects were below average. They have, therefore, had 'small profits, or, -indeed, even losses -when the-market was moving serious losses on minor market declines. The following compilation attempts to show the shifting leadership which has been the rule during the past two years. Column 1 lists of Standard & Poor's major indus- trial averages in the order of their performance from October 1957 low to 1958 high. The figures are 1958 highs expressed as percentages of the October 1957 low. The secon column lists the same 2\groups, the figures being July 29, 1959 highs as percentages of 1958 highs, and the thiM column traces performance on the same basis from the July 29th high to date. Obviously, some shifting of investor preference was necessary during the period if optimum results were to be obtained, despite the fact that the market was in a general uptrend. Radio-TV Manufacturers, for 18 months the outstanding performer, have now dropped sharply in the group rankings. Groups that were below average hold- ings in 1958, such as Brewers, Aluminum, Chemicals and Soft DrinkS, suddenly became relatively attractive in 1959. Similar acticn should obtain in the next upmove,. and in order to 'obtain maximum results, the investor will need carefully. ff'J 'W (!jis present holdings .rrWTo–1'v1M-irs. llJo -2Radio-TV Mfrs. \..'y 3acco 10.2 -Drugs – Equip; 191 – -180 Brewers Electr – — SofLDrinks. Coal 10.1 99 Retail 99 Distillers 161 1 126 Contamer Paper 98 -Air Transport – Steel cy–. r' inery 124 Paper e als 124 Uhlities 98 98 Food gs 122 Food 97 Agric.Machinery 1 Machinery 119 Mining & Smelt. 97 .. Railroads Soft Drinks 118 Autos 96 Retail 151 Autos 117 Brewers 96 Tires 150. Office Equip. 117 Railroad 95 , Tobacco 150. Tires 116 Steel 95 – Utilities 149 Foods 112 Chemicals 94 Building 148 Steels 112 Cont, -Metals-Glass 94 – Electronics 148 Tobacco 111 Elec. Equip. 94 Textiles 146 5DO-STOCK COMPo III Distillers 94 .- Cont, Metal-Glass 145 Elec. Equip. 110. Office Equip. 94 5DD-STOCK.COMP.142 Retail 10.8 5DD-STOCK.COMP.94 Aluminum 141 Distillers 10.7 Agric. Machinery 93 Paper . Railroads Aluminum 93 Mining & Smelt. 139 Containers-Paper 106 Electronics 93 Aircraft 135 Paper 106 Copper 92 Soft Drinks 134 Building 10.4 Air Transport 91 Copper . 133 Utilities 104 Building 91 , Elec.Equip. 130. Copper 10.0 Radio-TV Mfrs. 90. Autos 127 Coal 98 Textiles 90. Chemicals 127 Textile 98 Tires 89 Machinery . Coal 126 Cont, Metals-Glass 95 Aircraft 124 Oils 95 Drugs 88 88 – Brewers 123 ' \'1… 11 r Jetter 18 not, and under Aircraft 90 Oils 87 & r;c 86 IS to be co'n'Btrued as, an offer to'1!ell or a sohcltatJon to huy any secuntles rcferrro to herein The mformntton contained herein IS nCotog, uIanrca.ntAeUedeaxsptroesasciocunrsacoyf aot-pcinoimonplealteenessusbaJnecdt thtoe fcuhraDnjllsehmWgItthhoeurteonfoItSic l-q .lbrectors. Satso.eakhroelpdreerssenantsti purcJmole, sell and may have an mtel'est in the- s(!oCurities menbonerl herem JZInI a .mformal rS1mmcntnry on q,ay news anIJ not as a complete anallof\ls AdditIonal mW!p!f9 bf.l. L I Co Jl! m t I merely ns Il general, Il!J!\ referred to herem Will be \VN JOI .

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Tabell’s Market Letter – October 23, 1959

Tabell’s Market Letter – October 23, 1959

Tabell's Market Letter - October 23, 1959
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Walston &Co…..——-Inc…..– Members Y01'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 23, 1959 Last Friday's strength, based on hopes of a steel strike settlement, proved pre- mature and the Industrial average drifted back into the trading area in which it has held since early September. This week's low of 624.55 compares with the September low of 613.30. From a technical viewpoint, a break below that level on volume would be quite discouraging and would destroy the potential base area that has been building up since early September. It would mean that a new base must be formed at a lower level before the advance is resumed. However, several breadth-of-the-market indicators point to the probability that the September lows will hold. Volume has failed to pick up during periodsof price weakness.'The- heaviest downside'volu,me-was during-the first-phase 'of — . the decline in August when volume on one declining day was above the 4-million-share mark. Also, the drop in the total volume of trading has been brought about almost en- tirely by a drop in buying volume. Downside volume on a ten-day moving total basis is very close to the lowest point reached in 1959. Also, the figures on new highs and new lows are encouraging. The number of new lows was the highest since October, 1957 during September, but has dropped to a point where it is not much above the number of new highs. Probably the most encouraging potential is the sharp pick-up expected in the business pattern when the steel strike is definitely settled. Leonard H. Lempert of Statistical Indicator Associates of Great Barrington, Mass., has some interesting comments on this subject. This company's Statistical Indicator Reports have been ac- curate in forecasting business cycles. The findings are based on the action of twenty- one business indices. Some of these indicators are leaders in the sense that they usually lead the business pattern and change direction does. Another portion of these twenty-one indices are coWiiden i ge ral business pattern and move with it. Another portion are ge ection after the general business has changed its trend. Mr. October 21 st report th owing to say in his '0 A comparison of recent ' t — at the time othe -f956 steeC strike is helpful in our indicators had been under wa a neral, downturns in the leading followed by weaknesses in several of the COincidenbit'nd'C the cyclical ups or he' 1956 strike began. Moreover, by July 1956, d ay for twenty-two months. Weakness in the lead- ing indicators at t s . is virtually simultaneous with the strike and with similar weakness in he cident indicators There is no indication at all of the sequence of weakne 'rst in the leaders and then in the coincident that would char- acterize the beginning of a cyclical downturn. On the contrary, their concurrent weakness is typical of a temporary event, outside the stream of cyclical developments, which is strong enough to pervade the entire economy. Even with signs of a recession already apparent by July 1956, the rebound from the steel strike postponed its beginning by nearly a year. This time, the strike was preceded by an upswing that had only lasted fourteen months and there were no signs prior to the strike that its end was in the offing. Furthermore, the greater length of the strike this time has depleted Inventories considerably more than in 1956. Consequently, many more months of hlgh level activity are expected between the end of the steel strike and the beginning of a recession. The recent general market weakness has brought some issues down to more attractive buying levels. The aluminum stocks have been unsettled by a price cut in a type of aluminum sheet and have declined to support levels. Kaiser Aluminum (51 3/4) and U. S. Foil B (62) are well below their highs and close to support levels, Aluminium, Ltd, (33 1/4) also is attractive. Am erican Viscose (42 1/8), showed nine-months earnings of 4.48 on a consolidated basis and appears undervalued. Electric Storage Battery (50 3/4) is down from its 55 1/2 high and is recommended. Fansteel (64 1/ 2) contmues to show constructive action. Cluett Peabody (56 5/8), Great Northern Paper (50), West Virginia Pulp & Paper (47 3/4), and Singer Manufacturing (49 5/8) are othe'r favored lssues. JnternatlOnal Packers (22 1/4). reached a high of 23 3/8 during the week. It was 16 1/2 a month ago. It still has a higher potential and should be bought on dips. I also like Kaiser Industries (15 5/8) EDDaIIND jM TAREI.! ll'ft\ Or7umstancas lS to be construed as, (In offer to 'Sell or or complctenl.!'ls and the furntshlllj.( thereof II IS snooltk'\raJf!l&1t uIn!'.a,Qer'qniolc)Nlrc-umlltnlL(!CS s1;) herem bectnstrucl The mformabon as, n represent.!- of oPInion Ilre subJect to change WIthout nobee. WnlstQn & Co. Inc, and OffIcers, Directors, Stockholders and lmployccs thereof, purchnae, sell and may have an Interest Tn the sccUrttJes mentIoned herE'ln ThIS market letter IS lntendoo and presented merely as a general, 11Iformal I'ommentnry on day tQ ,Jay market news and not as a complete annlysls. ArldltJonal mformatlOn ….. ith rCpect to any securities referred to herem WIll be furnlshl!l upon requ(qt \\ X 301

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Tabell’s Market Letter – October 30, 1959

Tabell’s Market Letter – October 30, 1959

Tabell's Market Letter - October 30, 1959
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Walston &Co. – – – – – I n c – – – Opy Membe's New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 30, 1959 On Friday, the Dow-Jones Industrial average broke out on the upside of the tradin area in which it has held since early September. The upside penetration appeared more substantial than the false move of two weeks ago when the Industrials reached an intra-da high of 645.53 against a previous high of 643.60. Friday's high was 649.40. Rail action was sluggish, however. Friday's high was 155.53 as compared to a previous high of 161 However, general breadth-of-the-market action would indicate that the intermediate trend is again upward. ,- Current Price 21 With growing investor interest in the Current Dividend Current Yield .50 2. 40/0 economic revival of Western Europe, Inter national Packers, Ltd. (21), appears to have Long Term Debt Minority Interest Common Stock 2,199,805 2,164,243 2,733,180 shs. Sales – 1959-E Sales – 1958 375,000,000 376,999,565 Earnings Per Share-1959-E Earnings Per Share-1958 3.00 2.68 Market Range-1959 23318 – 12 3/4 considerable attraction as a long range spe lation with an upside potential more, than 10 above present prices. The company purcha and processes livestock mostly in Argentin , Brazil, Austraha and New Zealand, and transports the finished product throughout the world, the principal market being Grea Britain. Outlets are also maintained in the United States, Canada, Belgium, Germany, Note All above figures include parent company and foreign subsidiaries consolidated. South M,.w;keti p I eat the Phillipines. i the above areas i 'ain, for example, 1946-1950 average, compared with an 180/0 ffirc m 1958 was 430/0 above th States. This trend should continue, siilce-British meat pounds per capita in the United t .W yo pounds percapifa ii11958 vs.152' Marketing is, t problems, the main difficultie in prior years havi em d 'th production. The new constituhonal government of Argentma ha k p encourage the inflow of foreign capital and to impro the country's econ Sl a' y encouraging the export of beef. Thus, beef herds and consequently, meat vai e for export,are expected to increase sharply over the next few years. It is exp a that International Packers will have little difficulty findmg mar kets for anticipated increased slaughterings. Exchange controls and currency devaluahons have also plagued the company in re cent years. These should now be of relatively little importance as virtually all countries in which IPK operates now permit free exchange of currency to a great degree. In add1tio the company is a buyer on balance in relatively weak currency countries such as Brazil and Argentina, and a seller on balance in the United Kingdom, Western Europe and the United States. Thus, any further weakness which might take place in South American currencies would probably increase IPK's earnings, provided free exchange continues. The price of International Packers seems to reflect previous uncertainties now non-existent, rather than the bright future picture. For the six months of 1959, the compa earned 1. 80 per share on a consolidated basis, after unusually generous provisions for exchange loses without which earnings would have been 2.49 per share. Anticipated per share earnings for the full 1959 year are 3.00,after deductions of reserves, vs. 2.68 in 1958. Thus, at its current price of 21, the stock is selling for only 7 times anticipated 1959 earnings with the outlook favorable for marked earnings increases m 1960 and 1961. From a technical point of view, the stock has an initial objective of 29 followed by a long term 56. This latter objective could very easily be realized on eventual improve- ment of earnings to levels considerably above the current ones, plus re-evaluation to a more realistic pIE ratio. Dividends now at a 25 semi-annual rate could well be liberal- ized at some future date. While some degree of speculative risk undoubtedly attaches to any foreign operation, the upside potential appears substantially to outweigh the risk in- volved and the stock is recommended for purchase. ElDF;TUPJD Vi. 'f'ttDELL be con'ltrued as, an offet tn sell or a soiicltntJamM,'fY IJJNwuln The mCnrmntlOn .fiI)nOtnWln r oerncien IsS n gua ntecd eu or completeness and the furnishing thereof IS not. and lk.4SlJ' opinIon are suhJect to changc ,\\lthout notlcc Walston & Co, Inc, and OffIcer!!, as, n representa Stockholdcrs nnd J;mployccs thereof, purcnnRe, sell and may have nn mtcrest in thc s()!uritles mcntlOnoo hercm. ThIS mnrkct letter is llltenrled II.nrl ptcscnted mcrely as a !l'cncrnl, informal commentary on dny to day market news and not ns Do complete analysll; AdditIOnal mformatlon '\\lth respect to any tecuntU referroo to herem Will be furnished upon request \\ N 301

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