Viewing Month: November 1959

Tabell’s Market Letter – November 06, 1959

Tabell’s Market Letter – November 06, 1959

Tabell's Market Letter - November 06, 1959
View Text Version (OCR)

. Opy Walston &- Co. —-Inc —….;.- Members New Y01'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 6, 1959 Although plagued by irregularity due to the steel strike, the marke t moved ahead after the Election Day holiday, and the Dow-Jones Industrial average reached a high of 654. 38 on Friday. As has been mentioned in previous letters, an upside penetration of the recent trading range in which the Dow average has held has taken place. Breadth-of-the- market action remains reasonably good, and further strength from these levels would con- firm a reversal of the trend, eliminating the possibility that the entire trading area since early 1959 constitutes a head and shoulder top. Once this possibility has been eliminated, the technical picture should point rather obviously to higher levels ahead. Meanwhile, how ever, be exercised until-the picture is completely clear. – V.- – As always, the best protection against unforeseen market vicissitudes is the care- ful selection of individual stocks. A number of stocks on our recommended list appear to combine sizable upside potential with limited downside risk. INTERNATIONAL PACKERS, LTD., originally recommended at 16, and re-recommended last week at 21, reached a high of 24 3/8 on Friday. The stock still has attraction on a long range basis as a specu- lation on improving economic conditions both in South America and Europe. Action of other stocks on our recommended list has been less encouraging of late. RORE AIRCRAFT (16) is selling near its low for the year. However, the 1.00 dividend affords a yield of over 6, and, despite the poor earnings (1.40 was earn d in the year ended July 31,1959 vs. 2.18 in the prior year) the dividend appears safe. As the annual report points out, the shrinkage of margins was due in large part to start-up expenses on new contracts. It is believed these expenses have just about reached a peak. While earnings in the October quarter will probably improved over the period when ll per share was earned, a fairly steady u e d ul(l; continue for the rest of the fiscal year and earnings should at b t th 'scal 1959 perfor – ance. Sales should remain at their current levels, ho 1958,and a return to normal margins could well provide a worthwhile b.aings ease later on. Another one of oucrecommendations is CHICAGO,MILWAUKEE,ST. PAUL P F 6 rnings in the normallyprosperOl.ls' months of August and Septe ers Ii the steel strike and a wheat crop smaller than last year. Thus, r e ended September, only 26 was earned per share vs. 1.01 'n t 958 period. Earnings for the year will probably not equal the 2. Meanwhile, the out 9 a In, the 1.50 dividend earnings in 1960 for this does not appear in jeopardy. highly leveraged road appears good. By contrast, AT NORTHERN PAPER (49) appears well on the road to recover Net rose sharply in the third quarter to 41 vs. 16 in the 1958 period. Earnings for the forty weeks ended October 5th were 1.04 a common share vs. 8 a year earlier. The co pany has projected continued improvement in sales for the balance of 1959,and a gradual utilization of presently idle capacity. As noted in our letter of September 4,1959, the earnings potential as capacity is approached is considerable. NATIONAL DISTILLERS (32), another recommendation, has also shown good earn- ings improvement. Sales for the nine months expanded 110/0, and the earnings increase wa at double this rate with 1.63 per share being earned vs. last year's 1.32.For the full year, earnings should be,.close to 2.25 a share, with some 45 coming from the compan chemical activities. Recognition of the increased importance of these activities should ultimately lead to a higher P IE ratio for the stocK, and growth in chemical sales and earn ings,as well as moderate expansion in the liquor bUSiness should continue into 1960. Recent earnings of FREUHAUF TRAILER (29) improved even more dramatically as the stock moved into new high territory this week. 1. 43 was earned per common sha for the nine months ended September 30th, versus a 1958 deficit as the company began to show the effect of a drastic internal reorganization. With this reorganization complete, profits should continue to grow next year from the sharply increased demand for trailer for regular trucking, piggy-back, and other functions. AWTamb Dow-Jones Ind. 650.92 EDMUND W. TABELL WALSTON & CO.INC. IS to be as, an offer to sell or 11 sohcltatlOn to buy nny secUritieS referred to herem The mformatlOn ('ontnmed herem IS not IlS to accurncy or completeness nnd the furnlshmg thereof 18 not, and under no circumstances IS to be construed as, a representu- tion by Walston & Co, Inc All of oplllion nrc subJcct to chanJ!;Q Without notice Walston & Co, Inc, and OfflC(!rs, Directors, Stockholders and Employeeo; thereof, purchase, sell and may have an mterest m the securitIes mentIOned herem ThiS market letter IS mtended and presented merely as a general, mformni commentary on dny to day market news and not as a complete analYSI'l Additional mformatlon With rE!5pect to any securities referred to herem will be furnished upon r e q u e s t . ' WN 30l

Download PDF

Tabell’s Market Letter – November 13, 1959

Tabell’s Market Letter – November 13, 1959

Tabell's Market Letter - November 13, 1959
View Text Version (OCR)

Walston &Co. Inc fiLE COP1 Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lEnER November 13,1959 General weakness in the averages dominated the week's market action. After brea ing out of the trading range in which it has held for some time, the Dow-Jones Industrial average returned to the top of the range, reaching a low of 640 .01 on Friday. This is norm 1 technical action and current levels should constitute a fairly strong support area. In orde to confirm the upside penetration, some recovery should take place from these levels. As has previously been noted, the keynote of the market will still be selectivity. In this connection, we are reprinting below our entire recommended list. Again it is divided into two parts – the regular list, and a package recommendation of low-priced issues. on this listas co.uldbe expected.in ,anirreg)JlarmareJ, . poorly and are selling below recommended prices. Of these, six are in the oil group whic has, of course, been under considerable pressure due to heavy tax-loss selling. Retention of these stocks is recommended for the time being, although they could be candidates for sale when tax-loss pressure abates after the 1st of the year. Two other issues selling be- low their recommended levels are in the aircraft group,.Northrop Corp. and Rohr Aircraf This group has begun to act better and it is believed that the current rally could carry bo h stocks close to or above their recommended levels. Rohr was reviewed in our letter of last week. Northrop runs into heavy supply at around 35 and might be disposed of on stre into that area. Other stocks selling below their originally recommended price such as American Viscose, Great Northern Paper, Newport News Shipbuilding, Northwest Airline and Schenley, are close to support and would appear to be attractive purchases on any further weakness. Other stocks in the list, despite substantial advances, attractive. Coca-Col advanced to a high of 169 early last week, but new it appear attractive even at current levels. The meat packing group t g, Wilson & Co. des pite the fact that it has almost tripled since the or' I' ation, still seems in- teresting. Other stocks which seem especiall attr 'e at time areCluett Peabody, Electric Storage Battery,National Distille 'er f and International Packers American Viscose R4 National Distillers 27 32 Butler Bros. Chic. Mil. St. Pa Cluett Peabody Coca-Cola Consolidation Coal Dayton Rubber Elec.Storage Battery Fansteel Metallur. Getty Oil Great North. Paper Heinz, H.J. 4 36 32 54 60 28 57 56 7 56 165 41 32 56 67 18 50 85 Newport News Ship. Northrop Aircraft Northwest Airlines Pan ArneI'. World Air Pennsalt Chemical Rohr Aircraft Royal Dutch Schenley Industries Shell Transport Singer Mfg. Union Oil of Calif. 47 33 38 12 23 24 48 43 22 48 50 38 31 34 22 29 19 40 35 20 49 44 Intern'l Min. & Chern. Kaiser Aluminum Magnavox Monsanto 29 41 40 38 Rec, Price Avco 9 Chemway Curtis Publishing Decca Records 11 15 18 Divco- Wayne Fedders Corp. Freuhauf Trailer Home Oil A and B 17 19 17 20 30 U.S.Foil B 49 West Virginia Pulp 69 Westinghouse Elec. 50 Wilson & Co. L O . W – P R I C–E D – L- IST 33 49 88 15 Current Price 14 12 12 18 22 18 28 12 Hotel Corp. Intern'l Packers Kaiser Industries National Can Oliver Corp. Pacific Petroleum Publicker Ind. Rayonier United Industrial Rec. Price 7 15 15 14 19 18 11 19 13 39 56 98 43 CPurrirceen 7 23 15 9 23 12 9 24 16 15 mnr\et etter IS not. and under no circumstances is to be construed as, sWqu\lAJa'Elau seeunbe! referred to herem. The mformatlOn fMf of or eompleteness opinion are nnd thtoe fchua'WriYr' WiN,neot;, pircumsatnandces is to beDcIorencsttorurse,d Satso,cakhroelpdreerssenatnad p 11 &,e an interest in the securities mentIOned hereIn. This market letter Is intended and presented ml!rcly as a general, day marW news not as a complete analYBIB AdditIonal Information with respect to any securities referrC!d. to herein will be furmshed upon request WN 301

Download PDF

Tabell’s Market Letter – November 20, 1959

Tabell’s Market Letter – November 20, 1959

Tabell's Market Letter - November 20, 1959
View Text Version (OCR)

fILE COpy Walston &- Co. – – – – – I n c . – – Membe,'s New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 20,1959 Technical market action is encouraging despite a divergence in the action of th Industrials and Rails. The Dow-Jones Industrials declined quite Sharply early in the wee to reach an intra-day low of 630.99 on Tuesday, and recovered rapidly later in the week The Industrial average now shows a series of higher lows with a September low of 613.30, an October low of 624.55, and Tuesday's low of 630.99. Combined with successive mont higher highs of 643.60 in September, 646.53 in October, and 658.58 earlier this month, an uptrend channel has been formed which would be further confirmed by a hlgh above 658.58. Friday's high was 649. 97. The potential base since September has now been . broadenel sufficiently toindicate a possible 705-710 witllsome temporary reSistance at 655-665. The Rail average has shown much less favorable action. The September low of 149.12 was broken on the downside at this week's low of 145.45. However, the Rail aver age is near its downside objective. In the letter of August 12th, I noted that a downside penetration of the 174-157 range in the Rail average would, from a technical viewroint in- dicate a further decline to about 143. Further tax loss selling may bring the Rail averag down to this level'over the next month. The Rails may need time to form a new base, but appear to be approaching a buying level. My thoughts on the longer term outlook for the market will be sent you next week. It will be in the form of a reprint from the!'Commer- cial & Financial Chronicle of an address to the Arizona Bankers Convention m Phoenix on November 13th. It will be sent in place of the usual weekly letter. Regarding tax-loss selling, the irregular action of the market recently wlll probably result in more tax-loss selling than in 1958. If the market has been higher for most of the year, the December low is usually reached 1onth. In 1958, with the market higher for most of the year, the low d )Wece ber 3rd. In 1957, with the market lower for the last half of the be w was not reached until December 23rd. Probably this year's . e about half-way between the above a — ould be to st;cks s-;l to establish tax losses. good relative strength action and have a considerably higher oten' 1. letter, these suggestions are for longer pull holding of six 0 O. yare not trading recommendations. They are of varied 'uality r i s are in addition to my recommended list which was published in the Ie r f N ber 13th. iday's Price Friday's price Allis Chalmers 34 3/8 Kimberly Clark 71 Aluminium, Ltd. 29 3/4 Lukens Steel 84 Amer. Broad. Para. 32 7/8 Martin Co 44 3/8 Ame r. Distilling 46 1/2 McCall Corp. 28 5/8 Amer. Optical 47 7/8 Montgomery Ward 50 3/4 Armour Co. 35 7/8 Motorola, Inc. 152 1/4 Bendix Aviation 74 Penn Dixie Cement 33 Bethlehem Steel 54 1/8 Pepsi Cola 35 1/8 Conso!. Electronics 47 Pittston Corp. 74 1/8 Copperweld Steel 49 Reynolds Tobacco 62 3/4 Cudahy Pacj;ing. Diamond-National 13 7/8 38 5/8 .- Servel, Inc. Stevens, J. 13 7/8 31 3/8 Ferro Corp. 41 1/2 Swift & Co. 42 5/8 Gen'l Amer. Trans. 52 7/8 United Eng. & Fdry 19 1/8 Great West. Sugar 30 U S. Freight 59 7/8 Hammermill Paper 31 1/8 Woolworth 59 1/4 I am leaving next week for a business trip to Walston's offices in Honolulu and will contmue around the world to TOkyo, Hong Kong, Bangkok, Paris and London. I hope to have something of interest to report on my return on December 21st. In the meantime, there will be several write-ups of individual issues in the letter. EDMUND W. TABELL tllJifllqder na IS to be eonstrued ns, an offer to sell or a sohcitalVo n cu I e E!i-em The Information c6-tbCll'i't-d 'hbMMlI! hy & Cn, Inc All as to ucct!racy e)'pregSlOnq nf or completeness and the lpinlOn are subject to furnl!;hmg thereof III not, chang-e 'Ithout notice nnd under & no circumstances IS to Co, Inc, and Officers, construcd as, a l'eprC'SentnStockholders and hmplo()(''1 Ow-rrot, ptlrChllRC, BC!! and mny have Itn mterest In the SecUlltzes meutJflnro herem. 'rhls mnrlct Jetter IS mtcnde.-l and pre'lentcd merely as n general mformal commentary on duy to day market news nng not as a complete analYSIS Addlt1maJ mfOrmatiOn With respe'!t to any securities referred to herem 'Ill furnished upon request \\ i 301 ,

Download PDF

Tabell’s Market Letter – November 27, 1959

Tabell’s Market Letter – November 27, 1959

Tabell's Market Letter - November 27, 1959 page 1
Tabell's Market Letter - November 27, 1959 page 2
Tabell's Market Letter - November 27, 1959 page 3
Tabell's Market Letter - November 27, 1959 page 4
View Text Version (OCR)

Reprinted From 17z(l COMMERCIAL and FINANCIAL CHRONICLE Thursday, November 19, 1959 What Time Is It on the Stock Market Clock By Edmund W. Tobell, Dlrector of Institutional Research, & Co,Inc, New York Clty Expert market analyst sees D..J Industrial Average topping out in 1960 to 1961 at .round 180 to 800, compared fo ra,f Augu,f', .Igh of 883, before declining to 150525 range in next five years. In revealing Investor confidence is currantly extremely high and makes tor a more vulnerable market. Mr. rabell doubts. however. that we are in a major downtrend. The arialyst explains the factors Influencing price diversity of one stock to another; examines market wave theories; observes neil emerging pattern of a narrower range for stocks and a wider Dne fDr bonds, and envisages an edvancjng market waVe over the next ten years. Investors are advised to be selective and not solve t'lair investment problems by remaining static and owning the FaVOrite Fifty,.. I Many investors arc confused by the seemingly irrational behavior of the stock market They find it dlffh'llt to understand why one stock will sell at400r50 Urnes earnings and another at 10 tim e s They become confused when the price of one stock advances while its earnings are declining and another aeclines while 1t s earnings atrreendin. Paanrtupo-f EdmUDd w. T.belJ fact that the stock market should act as a barometer rather than a thermometer, attempting to discount trends in advance rather than reflect the Immediate situation. To a larger extent, however, the seemingly irrational behavior of stock pI Ices is explained by the fact that the prIce of a stock depends, not On one slOgle yardstick but on many elements. These many elements can probably be narrowed down to four main influences on stock prices Three of these factors are tangIble (1) earnings, (2) dIvidends, and (3) money rates or bond YIelds. But there is a fourth factor that is not tangible, that cannot be expressed in terms of numbers and that is this seeming irrationality is explamed by the not easy factor is tion vme setaosru rceo.n fTi dheISn cfeo. uIrnt h- Highs and Lows of Investors Confidence – Present Market Vulnerability to Change I 1850 IT m 010.1'57 On.I1S1 4 IU, fourth wave. The fifth wave average and some d i v i d en d started from the October 1957 low. increases and extras are to be Doubts We Are in Major Downtrend expected. Tills is hardly the back ground for a market decline. Furthermore, the fifth and final phase Was' the long-term advance from 1949 completed at the August of a long-term advance is usually the most dynamic with heavy vol- 1959 high of 683 and are we now ume and overspeculation. The in a maJor downtrend It is pos- present advance does not yet fit sible, but I doubt it. There are into this category. several techmcal reasons for this The advance that started in October 1957 while a part of the broad 1949 advance to date, must be considered a bull market of its own. A study of 14 bull markets since 1884 indicates that if the present bull market ended in August 1959, it is well below average in terms of both time and percentage advance. The average time duration of the 14 bull markets has been 30 months. The present bull market lasted only 21 months if August was the top. The average percentage advance of previous bull markets was 105. The present advance to August is only 63. In addition, volume indications on the decline If we use EllIot's wave principal on the advance from the October 1957 lows, we have a number of alternative interpretations. On shorter term moves, the variOUS waves are difficult to recognize while they are taking place. One possibility is shown in FIGURE III. This would indicate that we are nOw in the fifth or final wave. An equally valid possibility, in my opinion, is the one shown in FIGURE IV. This would indicate we are only in the third wave, and the CUlmination of the advance from October 1957 will be in 1961 or possibly as late as 1962. since August have not been of the type usually associated with im- My conclusion August, 1959 high Is of that 683 Is the not portant phases. The heaviest volume of trading occurred in the first week of the decline from 683 to 640. While the decline continued to a low of 613 in September, volume failed to increase. In an important downtrend, volume increases as each new low is attained. From the viewpoint of the business cycle, the odds favor a continued upturn in business well into the top of the bull market. I believe it probable that the stock market will have a typical fifth wave climax with sharply higher volume and speculation in secondary issues. The high to be reached In 1960 or 1961 will be scoemnteawgehweriese,arothuinsd is750a-n80a0d. vPanecreonly about 20 from present levels-as compared with a rise of 300 from the 1949 lows. 1960 and maybe beyond. The Might Reach 550-525 at Most average time duration of a business cycle is 27 months to three years. The present upward business cycle started in April 1958 and is only 19 months old, The steel strike shortages will probably extend the cycle through 1960 and mto 1961. Earnings in What will follow after the market reaches a high in 1960 Or 1961 I believe the market will probably have a decline somewhat greater than we have witnessed in quite some time. This is not as omInous as it sounds. The market has not had a really the first half of 1960 could well surpass the rate of 11 earned in the second quarter of 1959. Divi- severe decline in recent years. The 1957 decline was 20. The 1946 decline was 25 . If the dend payouts have been below averages reach 750-800 on the 5 Foresees Consolidating Market – Conclusion

Download PDF