Viewing Month: May 1961

Tabell’s Market Letter – May 05, 1961

Tabell’s Market Letter – May 05, 1961

Tabell's Market Letter - May 05, 1961
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W—-a–l-s-Itnocn—&–C–o–. Members New YOI-k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS FILE CHJCAGO TABELL'S MARKET LETTER Mo.y 5, 1961 The Dow Jones Industrials have advanced some 66 in the three and a half year period from the October, 1957 low of 416 to the recent high of 700. The six-month advance from the October, 1960 low of 565 was about 240/0. However, the profits (or losses) of each individual investor undoubtedly showed considerable variance from this average performance. Some stocks have advanced over 1000 and others are sell- ing considerably below their highs of the past five years. The leaders since the October, 1957 low have been the defensive growth groups like the foods, tobaccos, and utilities and the larger companies in recognized growth fields such as electronics, busi- ness machines, bowling., photography, cosmetics, etc. One investment issue, General Foods, has advanced 2700/0 in the last three and a half years or four times as much than the average and, a glamour issue, Brunswick Corp., has advanced some 20000/0 from its adjusted low of 31/8 in 1957. Issues of this type continued to advance during 1960 while the averages declined, and the advance continued in 1961. In the last few months, a large number of unlisted issues, some in older established companies and some in small new companies have had spectacular rises. During this same period, the stocks in some of the groups which include many of the largest companies in our economy have ,done little marketwise as shown in the table below High Low 1956-59 1960 Price Down Up 5/3/61 from High from Low Dow Jones Industrials Air Transport Aluminum 685 37.38 179.0 565 689 21.76 29.45 99.00 121.9 (1) -21 -32 22 35 23 Autos Chemicals Copper Paper Rails 71.99 61.60 43.65 191.9 ,36.03 51.45 22. 146.5 59rui\W8Q 51.1 -10 .—- 15 15 37 18 19 6is Textiles 50 28.62 -19 17 It will be noted ion of the airlines and the coppers, most of these ten group v verage action since last October and all are sell- ing below their 195 9 h- There are, of course, good reasons to account for this subnormal actio se groups have failed to show the growth trends prevail- ing in other industr- and earnings have been lower in line with the cyclical trend of general business. However, most business indices probably reached their lows in the first quarter, and earnings in these cyclical groups probably will show an up- ward trend well into 1962. On a technical basiS, these groups appear to be slowly forming bases or accumulation patterns, and, both from a price and relative strength point of view, appear to indicate an upward trend over the intermediate term. How- ever, the groups are in various stages of the accumulation phase with some individual issues in each group showing much better action than others. The coppers have al- ready broken out on the upside, and the airlines appear to be in a position to do so shortly. The other groups appear to be in a position to break out at various times in the future as earnings improve. Most of these groups are in our recommended list.- -The copper group is represented by, American Metal Climax (30 ) American Smelting ( 70) and Kennecott ( 92 ). In the 10 priced list, Campbell Chibougamau (9 ) has been our selection. In the other metal groups, the list includes Consolidated Mining & Smelting ( 26) and Newmont Mining (70). All of these issues have advanced but still indicate higher levels. The airlines appear to be nearing a new high in relative strength and present an interesting intermediate term speculation. Action has been selective so far. Fortunately, our choice in this group has been United Airlines (48 ) which has moved up from a recommended level of 307/8 in October and a February, 1960 low of 25 1/4. In our lower priced list, Northwest Airlines (27) has advanced almost 100 from its 1960 low of 13 3/4 as agains a 35 advance in the airline average. Both of these still indicate higher levels. Issues i the eigat itn rant ape Heisel ifi 9tiP 14st sf l.ef)pil 21st. IS to be cctnstrued as, tm offer to sell or n soliCitation ro tp lJ!fUrncy or completeness and the furmshlllg thereof IS not, and under wPt9'tcm. I'fl1e JflformutIon t'bVb. DtlOn &…o'l. c A exPreSSIOnB of opWlon are subJect to change without nollce. Walston & C'tnA''.lll)JJOtit.Gf;a, and sell4tlltiln)'QlQre an mterest III the BCCUflbes mentIOned herein ThiS market O,Jteneral, m'forma commentary on ny to daf mM!'e't'Mws and not as a complete analYSIS Additional mformation With respect to any SCCUribell re crrcii to erem Will be upon .. …. . . . . W'. . L –

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Tabell’s Market Letter – May 12, 1961

Tabell’s Market Letter – May 12, 1961

Tabell's Market Letter - May 12, 1961
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FILE COpy Walston &- Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS CH,lCAGO TABELL'S MARKET LETTER May 12th, 1961 Individual issues have had wide price movements during the past month but HIe general market has held in a trading range outlined roughly by 670 and 700 on thie Dow Jones industrial average. This appears to be a normal consolidating peridd after a sharp 230/0 rise in six months. There are no signs of a long term deterior- ation in the technical pattern. Breadth-of-the-Market action, both in advances and declines and on upside and downside volume, continues to indicate a further advance in prices. It would appear that business reached its low in March. As usual, the stock market moved ahead before the low in business and bottomEd out in October. As is also usual, stock prices make their major move after a business low'has . ….een reached. This suggests that the stock market uptrend has still further to go. However, the sharp and rapid rise of the first six months might cut down the size of the ultimate potential. Our technical work indicates a broad objective of some- thing between 725 (which seems low) and 825 (which seems high). Probably the hesitancy in the market at the moment is the result of the completion of the first phase of the market advance with leadership switching from the defensive issues and the overvalued high P IE ratio glamour issues to the more basic group. In the last two letters, we outlined this trend and mentioned ten groups that were still selling considerably below their highs of recent years. We noted that most of these groups were currently showing below average relative strength but appeared, from a technical viewpoint, to be slowly forming accumulation patterns. In last weeks letter we mentioned the two groups that were showing the best immediate action, airlines and coppers, and discussed the issues in these two groups that are ;r\\\represented in our recommended list. 0 Of the remaining eight groups, there is no ic of upside break- out. Probably the textiles show the most pa for the near term. American Visi0SE' ( 49) is part of our rec ende It moved ahead fro!!, an low of 35 to a Feb . . hi I . d.has.done little . . since. Recent action has been attraction for not only the ap are! -P d' ( 63 ) has long term teJ;; s half interest in Clupak, the extensible paper. Reeves B. recommendation that has reached new high territory b t ti a ve. In the low price list, our recommenda- tions are Burlin 1 nd Manhattan Shirt ( 21 ). The chemical g a n a bit more work but in dividual issues have been already moving ahea recommended list consists mainly of specialty chem- icals. They are A an Potash (58), Hercules Powder ( 97), Heyden Newport ( 26), International Minerals and Chemicals (46 ), Tennessee Corp (64 ) and U. S. Borax (46). All of these issues have moved ahead sharply since their original– recommendation but they still appear attractive. Commercial Solvents ( 32) Foote Mineral ( 26) and Sun Chemical( IIi ) are part of our low priced list. Our favorite for long term holding is International Minerals & Chemicals. The steels may also be near an upside breakout on relative strength. Our reco- mmended list contains only one steel, Granite City Steel (49). It has moved ahead faster then the group and has recently reached a new all time high. We prefer the specialty steels like Granite City. We are adding another,speciatly steel, Carpenter Steel 47) to our recommended list. ' In the paper group, our only representation is in Great Northern Paper ( 64); the largest American newsprint company. The 1956 high was 108 r 12. Allied Paper (13 ) is on our low priced list. Of the remaining groups, Reynolds Metals ( 48) is recommended. in the alumin- um group and Ford Motors (85) is the outstanding issued in the automobile group. 'live have no immediate recommendation in the rubbers and the rails will be covered'in a forthcoming letter. The recent F .P.C. decision on the rate case of Panhandle Eastern Pipe Line ( 43) was quite unfavorable. The company lost its fight to sell its own low cost gas at the fair field price. The decision will be appealed to theCourts but it will tnke time. The stock has d,clined below our ori inall recommended level to

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Tabell’s Market Letter – May 19, 1961

Tabell’s Market Letter – May 19, 1961

Tabell's Market Letter - May 19, 1961
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Walston & Co. – lnc. – – – – – Members New York Stock Exchange FILE COpy NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHJCAGO OFFICES COAST TO COASl AND OVERSEAS TABELL'S MARKET LETTER May 19th, 1961 The market showed excellent technical action during the past week. Cautionary statements relative to the sharp price advance in new issues and obscure over-the- counter stocks resulted in sharp declines in a number of issues of this type, but had no great effect on the general market. There has been a lot of stupid and uninformed gambling in speculative securities. However, the amount of money used in these fast buck operations is relatively small when compared to the turnover in the secur- ities of sound, seasoned companies. 'life believe the market can weather price adjust- ments in overvalued situations without much difficulty. The action of the past week would lead to that conclusion. Except for some weak- ness on Thursday, the market moved higher and closed the week at 705.96 on the Dow- Jones Industrials as compared to 687.91 a week ago. The weeks new' intra-day high was 708.Go.Our Breadth-of-the-Market index also reached new high territory along with the averages. Recent market action continues to verify our conclusion of more than a month ago that market leadership is shifting from the overvalued glamour issues and defensive groups to the more basic, though cyclical groups. This type of action c'ould continue for a long period of time. There is no change in our recommended list since the last compilation of April 21st other than the addition of Carpenter Steel (46) in last weeks letter at a price of 47. This week we are adding Kerr McGee to the list. The stock was split two for one recently. The old stock reached a high of 120. Friday's close was 99and the when issued stock closed at 50. We are much impressed he long term speculative possibilities of this stock and believe it has had a sufficie of its recent sharp advance to warrant purchase. It is a mediuIff5ize 1 y\Me ed oil company and, through the wholly-owned Kermac Nuclear Fu'eJ,ii4S' t factor in the uranium The basic i aila3lE! for perusal at the desk of your Walston representative. – On November 4th, we c endation of stocks selling below 20.00 a share that,from a interesting upside potentials on a percentage basis. It w s str s be bought as a package in order to provide the neces t' 'n a speculative list of this nature. An addi- tional five issue on March 3rd. As of Thursda se average price advance of the first low-priced 4th, as against 180/0 for the Dow-Jones Industrial aver- age for the same pe The five issues recommended on March 4th have advanced 9 as against 4 for the Dow-Jones Industrials. If the market continues to advance it would be expected that this spread will widen. The list is below. Some . -. issues have moved above 20.00 a share, but retention is still advised. Allied Paper American Radiator Avco Burlington Industries Campbell Chiboug. Chicago, Mil., St. Paul Commercial Solvents Divco- V,fayne Flying Tiger Foote Mineral Fruehauf Trailer Getty Oil International Packers Price 11/4/60 10 5/8 14 1/2 13 7/8 18 3/8 5 7/8 15 1/4 19 17 1/8 14 3/4 19 18 3/4 141/4 15 3/4 Current Price Current Price 11/4/60 Price 18 1/4 Kaiser Ind. 8 3/4 12 3/8 15 1/8 Lear, Inc. 161/2 243/4 185/8 McCrory Corp. 13 231/8 18-5/8 Manhattan Shirt- 19 21 9 3/4 National Can 91/4 13 15 5/8 Northwest Air. 15 3/4 28 30 3/4 Pacific Petroleum 10 1/4 12 1/4 18 5/8 Rayonier 16 1/8 211/8 19 3/8 Rohr Aircraft 15 25 25 5/8 Serve1 12 1/8 18 1/8 25 3/4 Sun Chemical 13 5/8 16 7/8 20 1/8 Victoreen Inst. .16518 161/2 20 3/8 Price as of March 3rd, 1961 Adjusted to include price of Phillips- Es;kbardt alii This market letter IS not, and under no Clreumstances is to be construed as, an otter to sell or a BoheitatlOn to buy any r,efcrred to herem. The mformntlOn contalT\jJd herein as to or completeness and the furmshtnp; thereof 18 not. and under no circumstances 18 to be construed as, 11 represcnta- DGWbtJ Wli1eu1 QItIU. Inc AM c(fi'rQoontR) opimon arc subject to change Without notice Walston liHOd'IJ'THbJdml ltlticmAmtRl-s..TStockholders and Employees sell anil' may'llave an mterest in the securities mentIOned herein. ThiS TPfIf; 5'& an9 not as a complete analySIS Addluonni mformatlOn tn\e'ifdel lndIl\-est1'itaiffiMly as a general. .g–.- —- – .. . ,—-.——.——- .,,– ..- – – / –

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Tabell’s Market Letter – May 26, 1961

Tabell’s Market Letter – May 26, 1961

Tabell's Market Letter - May 26, 1961
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r- Walston &Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CH.JCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 26, 1961 Despite a recovery late Friday, the Industrial average closed some 9 pOints lower on the week after reaching a newall-time intra-day high of 714.69 on Monday. The decline in the averages was accentuated by the dip in American Telephone, duPont and General Motors. Probably at this stage of the market, tho averages have even less mean- ing than usual. Market leadership is changing as the business pattern improves and, after some further churning back and forth over the next month, we expect the market to move higher with the more basic companies in the front line. Shortly before the first of the year this letter was fortunate enough to suggest the purchase of INTERNATIONAL MINERALS & ..apital -gains. At – thtt time the stock was selling for around 32. It has since moved up to a 1961 high of 50 1/4 and has been consolidating in the 45-50 range. Despite the advance in price, the stock still appears extremely attractive. At the time of the original recommendation, a number of factors were noted. It was suggested that rising costs, which had prevented any substantial increase in per- share earnings over the past ten years, were about to level off, and that further growth in sales could, in all probability, be brought down to net income. The growth in world 'demand for fertilizer was pointed out, and it was suggested that the company's consumer products division, which markets monosodium glutamate under the trade name of Ac'cen could well make a substantially increased contribution to both sales and net. The poten- tialities inherent in the company's new potash development at Esterhazy, Saskatchewan, were also noted. Recent developments make our original projection in regard to this mine appear quite conservative. Mr. Claude O. Stephens, President of the Company,re- cently estimated that that company's potash projectar ab \Wh, ould produce 5 million annual net income. This estimate he 0 ser ve one. Since Texas Gulf has only a 750/0 net profit interest in the pro' , an extension of Mr. Sit ph ep.s, WQuid indicate ,that it is ' million 'after taxes. Assuming a 45 tax rate to io owance, the mine would then be earning some 11.8 million bei dc6e etion, or slightly more than 10 per ton based Oil anticipated ti 1 tons. , IGL expects t h i r y mine in production by mid-1962 with an initial 450, OOO-t c i , rt ereafter to be increased to a million tons. Fur- ther increases are b1 However, assuming the mine's profitability is the same as the Texas G 0 tion, it could be producing 1.60 per share based on 450,000 tons product' and 3.50 per share based on a million tons before taxes and depletion. This would be in addition to the normal growth in earning power which should take place over the next three to four years from the company's present operations. Regarding the Esterhazy mine, the following factors should be noted (1) The ore body is believed to be somewhat richer than the Texas Gulf mine and profitability could, therefore, be even greater, (2) Canadian tax laws make it probable that earn- ings will be largely or completely sheltered from income tax in the initial years of operation, (3) IGL, currently a major producer of fertilizers, has already-established outlets for potash. (4) The Saskatchewan mine has a number of obyious advantages il regard to shipping to mid-western fertilizer markets. There appears, moreover, to be little doubt abo,ut, the company's ability to market their-product. Vvorld demand for potash is growing at a rate of 600,000 tons annually, and long-term projections indicate demand should outrun current foresee- able supply in every year to 1970, with the exception of the 1962-65 period. Even in this period over-capacity will be slight. Based on the above factors, it does not appear at all optimistic to suggest that IGL could double its current earning power(3. 15 per share is estimated for the year ending this June) by 1964-65. Indeed, it is quite possible that the increase in earning power may be substantially greater. Diyidend payout has historically been relatively liberal and there is every expectation that,as earnings increase, the current 1.60 annual dividend rate could also be moved upward. From a technical point of view, the stock continues to have a minimum upside ob'ective of 75 with a ossible readin of even hi her levels Purchase is aain su,,- to be construed as, an offer to sell or 0. sohCltatlOn to buy any securittes referred to herem The information contnmed herein is not gUoranteed as to accuracy or completeness lmd the furmshIng 'P to be construed as, a rerresenta- D I'tJtD 4,.('.A, n…C of opInion are subject to change Wlth6fttt 'iHIM &V fio have an mterest 18 the secUrtUeI letLfH a !l' AJObiWJNt w…. Directors, Stockho ders and and presented merely as general, 101referred to herem

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