Viewing Month: July 1960

Tabell’s Market Letter – July 01, 1960

Tabell’s Market Letter – July 01, 1960

Tabell's Market Letter - July 01, 1960
View Text Version (OCR)

FILE COpy Walston &- Co. Membe,s New Ym Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OF-fICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July I, 1960 '''he market action of last week added very little to the technical pattern. The Industrials closed 5.61 points lower on the week and the Rails were off 1.03. The bread h of-the-mal'ket index is not available at this writing, but probably showed very little chan from last week. There were three days in which there were more advances than decline , and two in which declines predominated, so there was no important change in upside and downside volume indications. 1,7atching the present market is something like watching a three-ring circus. In one ring are the stocks which have had sharp advances, but are still making new highs In the second ring are the stocks that have been declining since the first of the year and are still making new lows; and in the third ring are the stocks that are just doing nothing As far as group action is concerned, there has been little change from the com- ments in the June 17th letter. lViost of the bread and butter groups, like the autos,oils steels, chemicals, machinery, paper, rubber, copper and textiles, continue to show be- low average relative strength. The aluminums recently entered this classification. Above average strength patterns continue to be shown by electronics, office equipment, drugs, glass, foods, soft drinks, utilities and specialties. There are, however, some indications of an impending change in trend for some of the groups. Many of the issues in the groups that have been the market leaders are at or are approaching their upside objectives on my technical work and should be ready for at least a lengthy consolidating period. The questicnthen will be whether or not a reactionary period in the present market leaders will carry the laggard groups and the rest of the market down with them, or whether the hitherto laggard groups can take over and assume market leadership. The breadth-of-the-market index will probably give the question. Ability to move above the March high would indicate a bro,S6enin f t pattern and participation by new groups. A new low in the b mdicate new lows in the averages. At the moment, the index is no beRe!;;lthan ral in its action. As far as relative strength is itiS' ourse, quite obvious that the laggard groups are still r er, the deterioration that has been in effect in some of e rb',as April, 1959, shows some signs of slackening. For example, 0 J there are only two whose relative strength line c 0 er ory in the past two or three weeks. The two are aluminum a tlve strength lows. c 1 A e other major groups have held above their rela- I e a a groups have improved their technical action to the pomt that they are c se ndicating a change in trend. The three groups are aircraft, airlines .ld cement three of these groups had been showing very poor technical action for a long Some of the laggard groups, while still showing poor relative strength, have been building up very sizable potential bases. The steel group is a good example. Despite the discouraging news developments in the industry on production rates and new orders, the steel group has held in a trading shelf for the two months. U. S. Steel (79), for example, has held in the 75-84 range. Ability to break out on the up- side would indicate an advance to the lower part of 108-99 overhead supply at the 1959 top. Armco Steel (64), Inland Steel (44), Jones & Laughlin (68) and ;tepublic Steel (62), have similar patterns. These issues should offer interesting trading oppor- tunities if one is willing to abandon positions if the March-May lows are penetrated on the downside. 3ven the oils, while still showing poor relative strength, have in many instances reached or approached downside objectives and have formed potential base patterns. The bases formed so far are not substantial, but could in the case of Standard Oil of New Jersey (10) bring the stock back to the 47-50 level. Gther laggard groups with similar patterns include building supply, chemicals, coppers, fertilizer, and sulphur. If all of these groups, together with the laggard groups mentioned earlier in the letter, reverse their intermediate trend, it would be possible for the breadth-of-the-market index to move above the March highs and for the various industrial averages to reach new high territory -'tOW-TrOOeS lilO 6.11 30 .3DlVUI\TD VI. TP.l.BELL c7r hmstances IS to he construed us an offer to sell or a &C,GQm&d herem The informatIon contained herem IS not guaranteed us to accuracy or completeness and the furnishing thereor IS not. and under no CIrcumstances 1; to be construed 85, a representn. tlOn by Wnlston & Co lnc All expresSIOns of opimon arc subJect to ehnnpe WIthout nutice Walston & Co. Inc, nnd OffIcers, Stockholders and Employeee thereof sell and mllY have an Interest iR the securItIes mentloned herem ThlS market letter IS mtended and presented merely as II general, commenWrY on day to day market news nng not as a complete annlysls Addltionnl mformatlon WIth respect to any secuntlei referred to herem furnlsheo rC9uest . . .. . ..

Download PDF

Tabell’s Market Letter – July 08, 1960

Tabell’s Market Letter – July 08, 1960

Tabell's Market Letter - July 08, 1960
View Text Version (OCR)

— Walston &- Co. —–Inc. —- Mem beTS New York Stock Exchange NEW YORK SAN FRANCISCO lOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 8, 1960 Last week's letter mentioned that there were some signs of an impending change in trend in the relative strength action of the various groups, and that many of the issue in the groups that have been the maJ;ket leaders were at or near their technical upside objectives. The glamour issues turned quite reactionary earlier in the week and suf- fered some very sharp declines. While there was a rally in these issues later in the week, they were still considerably below the recent highs. The question of whether weak ness in these issues would carry the rest of the market with them, or whether the hither to laggard groups would take over and assume been.re.so1ved so far. The Dow-Jones' InCllistrials held above the June 30th low of 63491 and closed onl frachonally lower on the first two days of the abbreviated week. Declines exceeded ad- vances on the first two days, but the market turned quite strong on the final two days of the week with advances exceeding declines and the Industrials advancing 6.18 points for the week. This technical action resulted in a constructive signal by one of my breadth- of-the-market indicators, the ten-week moving total of upside volume. This volume indicator moved above the high of December-January when the average was 685 to reach the highest level since early September. This is only one of my several breadth- of-the-market indicators, but it is the first one to show constructive action. The figures on my principal breadth-of-the-market index are not yet available, but they should be close to the March rally highs. It appears probable that the Industrials may test the 663. 64high reached'in. June., . f't t k' Over th.e past few weeks, I have made several suggestlOns on pro 1 – a mg on switches in my recommended list. The stocks still in my list, selling above 20, are tabulated below with some brief comments. These quality and are suggested for capital appreciation for a six-month or Ion r than trading, The lower priced issues will be reviewed in a sub it r. Recent S & P Price lating Indicat Po 0 D' ide Y' Comment .' American Viscose 34 – . – – ,00 -Buy- – . – Bestwall Gypsum B. T. L. Corp. 44 ((\\ s W 80 Buy-Hold 4.6 Hold for 48-50 Chic. Mil. & St. 20 – 1.50 7.5 Buy-Hold Cluett Peabody 2.50 4.5 Buy-Hold Coca-Cola A- 2.40 3.7 Hold Daystrom B 1.20 2.8 Buy-Hold Decca 30 B 1.20 4.0 Hold for 35-38 Divco-Wayne 23 B 1. 20 5.2 Buy-Hold Elec. Storage Battery 64 B 2.00 3. 1 Buy-Hold Fansteel 62 B 1.00 1.6 Buy-Hold Fruehauf Trailer 23 B 1. 20 5.2 Hold Georgia Pacific Plywood 56 B 1.00 1.8 Buy-Hold Great Northern Paper 'l4 B 1. 00 2.3 Buy-Hold Great Western Sugar 29 B 1.60 5.5 Buy-Hold Johns Manville Magnavox National Distillers Newport News Ship. Northrop Corp. Royal Dutch Schenley Industries U. S. Foil B 60 A 47 B 28 B 37 . B 37 37 A 22 B 42 A- 2.00 1. 00 1.20 2.60 1.60 1. 40stk. 1.00 .40 3.3 2.1 4.3 6.9 4.3 3.6 4.5 .75 Buy-Hold Hold for 55-62 Buy-Hold Hold for'44-47 Buy-Hold Buy-Hold Hold for 27-29 Buy-Hold Westinghouse Elec. West Virginia Pulp Wilson & Co. Winn-Dixie 58 B 44 A4.0 B50 A 1. 20 1. 20 1.60 1.20 2.1 Hold for 65-70 2.7 Hold 4.0 Hold 2.4 Buy-Hold Dow-Jones Ind. 646.91 Dow-Jones Rails 142.29 EDMUND W. TABELL WALSTON & CO. INC. rdThis market letter 18 nol, find under no Circumstances lS hcontainC(l herem is not guarnntecd as to or co!llP tion by Walston & Co, Inc All eXprcsalOns 0 opmlon be const eOthaB;. eatTeenessusbalenet toe t; ff r nge tc ; 1\ !J. rdtanlnlOd unntdnelrunyo acnirycuRmecs1t.aJ.nnctiees'!riesfetorrebde ctoonhsetrruemed aTsh, ea irncfporrmesnctnlOtan- notlCe Wolston & Co Inc and Officers, Directors, Stockholders and a men;V' ned herem ThiS market is and presented merely lUI a general, Emmfoprlmoynelecs otmhemreeonft,arpyurocnhfldRoe, tsoelldaayndmnr….e newsnnanln.dtneores,at sIna p Addlbonal lnformatlon ….. lth respect to nny SeCUritle., referred to herem \..\… iNll lbOet . .

Download PDF

Tabell’s Market Letter – July 12, 1960

Tabell’s Market Letter – July 12, 1960

Tabell's Market Letter - July 12, 1960
View Text Version (OCR)

July 12. 1960 fiLE COpy ALL WIRES INADVERTENTLY. SINGER MANUFACTURING (64) WAS LEFT OUT OF OUR RECOMMENDED LIST PUBLISHED IN LAST WEEK'S BLUE MARKET LETTER. THE ST0CK IS STILL ON OUR LIST AND IS RECOMMENDED FOR PURCHASE. EDMUND W. TABELL NY

Download PDF

Tabell’s Market Letter – July 15, 1960

Tabell’s Market Letter – July 15, 1960

Tabell's Market Letter - July 15, 1960
View Text Version (OCR)

———————- I filE COpy Walston &CO. Inc Members Ne1v YOI'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 15, 1960 Unsettling foreign news resulted in a sharply lower market in the first two trading days. Pressure lifted somewhat in the later part of the week, but the Industrial lost 16.67 points from last Friday's close, and the Rails dropped 3.40 pOints. The only favorable technical development was the failure of trading volume to increase on the decline. The week's volume was at the lowest level for quite some time. From a technical point of view, the main trouble with the stock market has be a lack of breadth. This simply means that, despite the action of the averages, there hav been more stocks going down than up. This is not a new development. In March, 1959, with the Dow-Jones Industrial'average at 610, my breadth-'oTthe-'rnarket-ihdex-started t) decline and the decline has continued without a significant rally in the index in fifteen months. This is despite the fact that the average itself has had several wide price move ments between 685 and 600 during this period, and quite a few individual stocks in the electronic and leisure-time field have moved ahead 100/0 or more. Regardless, the mai bulk of the market has failed to move ahead and most issues have declined, some quite sharply. This action has made it extremely difficult for the investor to significantly increase his capital worth unless he had switched out of the bread and butter groups, like the aluminums, autos, chemicals,oils,paper,rubber and steels, into drugs,foods and utilities, or into the super-growthstocks selling at thirty to fifty times earnings. This is most confusing to the average investor because the first named groups had been the investment favorites of the 1949-1956 rise, the Favorite Fifty of the decade. To repeat an illustration used in the May 27th letter – Evidence can be produced to show that this trend began even before June of last year. its recent price, thE Dow-Jones Ind. average was some 18/0 above its April 5 , yet a 10,000 invest- i i 'mentfour years ago in equal amounts of DuPont, e d 0 ,Aluminum Co.of America, and International Paper, would be wortli th 7 .00 today. The price of leading equities has been lly Ito , If our theoretical mvestor Wl th hl.s 10,000.00 I r aCdOBiBn t 1 e-hlB- e'stm-ent-among-such'-stodgy, defensive issues as American Tel er oods, Reynolds Tobacco and Wool- worth, his 10,000.00 today, and had he chosen Poloroid, Texas uns' k I, Zenith (stocks which, it must be admitted, are easier to pi t his 10,000.00 would have grown to the ratherastoundl 5.00. Is there n te cal indication that this confusing price action will change Actually, there is no must be remembered that the major price advance from 1949 is eleven years 01 nd has obviously reached a mature stage of development. The mar- ket advance started at a time when the market was grossly undervalued, probably more undervalued than at any time in our financial history. This undervaluation has been corrected, and the market is no longer on the bargain counter, Many stocks are sell- ing at extremely high price to earnings ratios because of the investor confidence that the rate of growth in earnings over the past several years will continue into the future. This could result in some rather drastic declines in individual issues if the growth fails to live up to expectations. Is the market vulnerable to an extremely sharp decline I do not believe so. I rather believe that the market needs a lengthy consolidating period. By lengthy, I mean a period of several years. In terms of the Industrial average, it is entirely possible that the 700-750 area will be the upper limits and 550-500 will be the lower limits. Over the next three to five years, the market may traverse this whole range several times.It is possible that On July 15th, 1964 the Dow-Jones Industrial average will be selling at exactly the same spot that it is today, but that stock A may be 50 higher and stock B 50/0 lower. This will seem a quite startling prospect for the new investor who has been accustomed to the market reaching new high territory year after year, but it is nothing startling to the older investor in the market place. Dow-Jones Iq.d. 630.24 D, ow-Jones Rails 138..89 EDMUND W. TABELL WALSTON & CO. INC. This market letter Is not. and under no circumstances IS to be construed as, nn offer to sell or a solicitation to buy any SecUTIties referred to herein The mformation contained herem iB not guaranteed as to accuracy or completeness and the furnlshmg thereof IS not. and under no circumstances UI to be construed aB, Ii representa tlon by lA'alston &- Co, Inc All expressIons of opInion are subJect to change Without notice. Walston & Co. Inc.. and Offlcers, Directors, Stockholders and Employees thereof, purchase, sell and may have an mterest In the securities mentiOned herein. ThIS market letter IS mtended and presented merely (IS a general, informal commentary on day to day market neWD and nOl as a complete analysis Additional mformatlOn With respect to IIny securities referred to herem wIll be –furmshe-d-up-o–n re-qu-est.- — — — – – – – — – – – – — – — – — – – – — WN—3-01

Download PDF

Tabell’s Market Letter – July 22, 1960

Tabell’s Market Letter – July 22, 1960

Tabell's Market Letter - July 22, 1960
View Text Version (OCR)

Walston &CO. Inc – FILE Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CI-IICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 22, 1960 In ten trading days, the Dow-Jones Industrials dropped from an intra-day high of 650.10 to an intra-day low of 605.45 on Friday, a decline of almost 45 points. At no tim during the decline did the daily volume exceed the three-million share level. Breadth-of- the-market action continues poor. The weekly data is not available at this writing, but the daily breadth-of-the-market index reached a new low on Friday. What is the technical pattern of the market at the moment As far as the averages are concerned, the picture has changed very little in the past several months. The Industrial average bui!t up a distributional pattern between August 1959 and Jarmlry of this year at arou.ndthe 685 level, with three possible downside objectives of 604, 578 and 550. The first of these downside objectives was reached at the 596.20 low of March and tested in May at 596.96. A base was formed in the 596-637 area during March and May with an upside potential of 660-680. This range was penetrated on the up- side and a high of 66l. 64 reached in June. However, the breadth-of-the-market index did not improve and could not better the March high, indicating a weak rally. The average has now declined to near the March-May low and the weekly breadth-of-the-market index has either reached a new low or is very close to doing so. Breaking of these two levels would from a technical viewpoint, indicate a decline to the 578-550 level. Ability to hold above the March-May lows would broaden the potential base and indicate an advance to above the June high. This would be signalled by the ability of breadth-of-the-market indices to move above the Marc;h .high. In the atmosphere of general market weakness, a number of stocks on our recom- mended list have reacted conSiderably from their highs. The four stocks noted in the tabl ;go/.below have declined from 230/. to from their peak Prim' three of the four are still selling above their originally-recommende;fJev s hWfu mental outlook has remained unchanged, despite the decline in m chnical point of they .. at or to strong support .. – -. L Cluett, Peabody Daystrom, Inc. Electric Storage Bat e Singer Manufact 0)J S)!l 1/2 493/8 73 71 51 40 58 57 .. Iff 23 OOJ./ ail-o CLUETT, PE Y till expected to report sharply-improved results for 1960,. possibly rf'aching clos 5.00, as against the 3.61 earned in 1959 and 2.59 in 1958. The pIE ratio of 10 d the almost-50/. yield seemingly fail to take into account the tre- mendous growth possibilities inherent in the company's 500/0-owned Clupak stretchable paper process. DAYSTROM,INC. reached a new sales peak of 90 million for the year ended March 31,1960 and, on improved margins, earnings expanded to 2.48 per common share. 900/0 of the company's sales are now derived from electrical and electronics products, and it appears to have a bright future in the field of advanced control and measuring devices. Management has forecast a sales gain to c-;er 1,00 million for fiscal 1960, and an even greater percentage gain in net income. ELECTRIC STORAGE BATTERY continues to show considerable improvement in basic earning power and is maintaining its position as a leader in battery and fuel cell research,with per-share earnings this year expected to better the 3.60 of 1960. ESB has arranged with 17 of the nation's leading manufacturers of materials-handling equip- ment to develop the first commercial applications of zinc-oxygen fuel cells. SINGER MANUFACTURING continues to show good earnings gains with 4.12 earned per share reported for 1959 vs. 2.70 in 1958. The company still has an ex- ceptionally strong working capital position with excess cash that can be used to acquire other earning assets. That this policy is being followed is evidenced by its recent ac- quisition of two small companies in the textile machinery lines. Further improvement seemil in store for 1960, and for the full year, earnings could reach 4.65 per common share without taking into account any profits which might accrue from acquisi- tions later in the year. EpDITTTND JU TA BEl .1 , 1J00 IS to be construed as, an offer to sell or aAY to herein The Informubon herem 16 q.qt torir.furacy or and the furnishIng thereof 11'Il6t;rlIYU'hch!f1rib b'hutn'sbl1tMl b1l1e construed as, a of oPlnJon nre subJect to change Without notice. Walston & Co. Inc. nnd Offlccrs, Dlreeturs, Stockholders and Employees thereof, purchR'le, sell and mny have an mterest III the SecUrltlCS mentIOned hercln ThiS market letter IS intended Ilnd presented merely as II. gcncral. on day to day market news and not IlB a complete nnalYsls AddItional information With respect to any securities referrcd to herem Will be

Download PDF

Tabell’s Market Letter – July 29, 1960

Tabell’s Market Letter – July 29, 1960

Tabell's Market Letter - July 29, 1960
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 July 29, 1960 Last week was a hectic one for the stock market. The Vow-Jones Industrial average declined some eight pOints on Monday, reaching a low of 597.30. This was the third leg of a triple bottom in the 596-597 area which had also been reached in late March and in early May. A rally took place on Tuesday, but was largely erased by a decline on the following day. Then the Federal Reserve re- duced margin requirements and Thursday and Friday saw an advance on improving volume with the average gaining 6.86 points for the week and up 19.40 pOints from l – — – — \ / l o n.d.. – a y' ! s lo t-i s w. tli e -basi-c the-sis of the market techn… iC-..i.an that th…. -e. . .m- . a r k e t tell-s its–o–'- wn – ;; Therefore, the Federal Reserve's action in regard to margin rates should, theoretically, have nothing more than a temporary effect. If the market has developed enough inner vitality to hold above the 596 triple bottom, it would have done so in any case. If such vitality has not developed, this area will be breached ard the lowering of margin rates has only postponed the inevitable. We are,therefore, faced with two possibilities. The first is that the triple bottom will hold. This, as every market analyst is aware, would be a very strong signal. It would broaden considerably the base around the 600 area which, at the March-May lows, indicated 660-680, an objective that was reached at the June high of 663.64. en t,he other hand, if the March-May-July lows were broken, it would then be possible to foresee a decline to 578 or 550, the second and third objectives of the August 1959-January 1960 top. Based on the continued poor breadth-of-the-market action up to now, this possibility cannot be disregarded. This prediction, however, must be taken in the range outlook which, as this letter has ,repeatedly stated, t 's remaining in the 700-550 area for the next several years with ps rallies 50 pOints above and below this range. If this is going to be t&Jz\tse, cline to around 580-550 — -would pl'esent —–rathe-r equities in general. fMr\\\, \\ ifn-h;ioc nt-buyin-g -opportunity fo1'- — — V. Cne indication that t'Wht proaching lies in a study of recent advance-decline figures. Th e e recent important bottoms in the one this week year. Ten and bottoms have ten rl , , and March of this year and September of last 0' t s of advances and declines taken at each of these th eadily increasing number of advances and a steadily decreasing number d e s . In other words, j'clst as the market, in early 1959 showed up momentum as it continued to advance, this market is showing declining downside momentum as it continues to fall. This factor should not be taken to indicate that the decline is over. It merely suggests that we are close to the ultimate bottom. If a further decline does take place, the obvious question is what stocks or groups of stocks will present the best purchase opportunities. A number of important changes in relative strength have taken place in the past few weeks. One, the improvement in relative action of the aircraft group, has been referred to in previous letters. Other groups, however, are showing fairly important upturns in relative strength. This in- cludes the coppers, cements, finance, fertilizer, and possibly the steels and oils,although none of these have as yet become strong enough to give positive buying indications. \IIeanwhile, groups such as building materials, variety chains, drugs, foods, tobaccos and utilities, continue to act better than the market. Purchases on any weakness should be concentrated on the groups mentioned above, plus any other groups which show improving market action in the next few weeks. Other relative strength patterns, of course, are unfavorable. The electrical equipment issues, for example, have recently turned quite negative. Other groups which have weakened relative strength and could turn unfavorable very easily include electronics,department stores, and office equipment issues. The blue chip groups such as the aluminums, autos, chemicals, machineries, papers and rubbers, continue to act worse than the market and no real improvement has been seen. e T. -' ,,,,, '7Q EDMUND W. TABELL n In mformal 0111)41 der cuweiances IS to be construed as. an offer to sell or a to herem The mformatIon S I All . or completeness and the f' 6 b cct to furnishIng thereof IS not. and under change Without notice Walston & no circumstances IS to be constrl1ed Co, Inc. and OffIcers, DIrectors, ss.teo.e 0 en; an Bell securities mentioned herem. ThiS market letter IS Intended and presenLf has a genfi!; WNon to day market news ancj not as a complete analYSIS AdditIOnal mformatlon With respect to any BeCUrItIes re err to erem 301 .. .. … . ……. ' .. … . …… . ….

Download PDF