Viewing Month: November 1961

Tabell’s Market Letter – November 03, 1961

Tabell’s Market Letter – November 03, 1961

Tabell's Market Letter - November 03, 1961
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t FILE COpy Walston &- Co. Inc – – – – – !Ifembel'S New Y O1'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 3, 1961 STEVENS (J. P.) & COMPANY, INC, Current Price Current Dividend 32 1.50 One of the most interesting facets of the recent market scene has been the re- Current Yield 4.7 appraisal of many growth companies who Long-Term Debt 83,200,000 securities were selling at fantastic multiple Common Stock 4,186,760 shs. of earnings. Concurrent with this reapprai a Sales-1961 (E) Sales-1960 475,000,000 512,700,000 has, been the search for new areas of growt and an'-increasing realization'that long-term earnings improvement may be found in cycli Earned Per Share-1961 (E) 2.40 cal stocks whose gains are often obscured b Earned Per Share-1960 3.65 interim fluctuations. Many companies in cy Mkt.Range 1961-60 33 1/8-223/4 (NoteFiscal year ends Oct. 31st) cHcal industries will, of course, report ear ings decreases in poor years, but results d , often, improve from cycle to cycle. No industry is more cyclical than the textile industry. Although recent studies have ,proven that the two-year cycle is somewhat of a myth, it is obvious that a number of factors in the industry cause wide fluctuations in the earning power of basic producers. Such is the case with J.P.STEVENS, INC., whose reported net per-share earnings have varied widely between 2.08 and 4.51 in the past five years, with no particular growth trend noticeable. It can be argued that Stevens' real growth has been obscured by two factors, first, the cyclical fluctuations mentioned above and, secondly, wide fluctuations in income tax payments due to tax losses of subsidiaries sitions. One of the mos common methods of smoothing out cyclical trends is the 0 -.ffug average, taking, for each year, the average results for the past e g table shows five year moving averages of Stevens' sales and pre-tax nin i e recent past. A glance c at the figures will. show, a growth trend which Five Ye &Five..Years Endea fir., i ls,noLpadicularlyapparent Pre-Tax Earn. Per Sh. 1959 1960 1961 W 4.15 3.75 4.63 5.24 5.41 (Note 4.75 milli n sales and 5.35 pre-tax earnings estimated for 1961.) Stevens, with more than half a billion dollars 1960 volume, is one of the largest manufacturers of textiles with output divided between synthetics, cotton and woolens. Since all three of these fabrics tend to have separate cycles, this diversification renders the company more immune to wide fluctuations. Post-tax earnings'are estimated at 2.40 after a full tax burden for the year to end October 31, 1961, down from 3.65 in the prior year, and 4.52, after some tax relief, in 1959. Evidence accumulates that the textile cycle bottomed out in the early part of 1961 and quarter-to-quarter earnings comparisons have been favorable. Net for the final quarter of the year should approach 1.00 per shar vs. 73 in the like 1960 quarter, and cyclical improvement should extend gains throughout 1962 when earnings should approach or better the 4.00 figure. An aggressive management has shown ability to keep costs in line as much as is possible in this highly volatile industry and research and development is intensive. In this connection, two joint ventures are worthy of mention. National Plastic Products Company, owned jointly with Humble Oil & Refining, manufactures a line of plastic filaments, including polypropylene, which will bc aggreSSively promoted for textile use. Kimberly-Stevens, owned jointly with Kimber1y-Clark,is developing and exploiting products in the field of non-woven disposable materials. Both these ventures should make substantial future acquisitions to Stevens' net. The stOCk, added to our recommended list last week, yields 4.7 on the 1.50 dividend, and has a long-term upside objective of 52 with strong support around current levels. It is again suggested for capital appreciation accounts. Dow-Jones Ind. – 709.34 ANTHONY '.V. TABELL ThiS r IS nder no cl!cumstances 16 to be construed as, an referred to herem The informatIon eontalned herem is not guaranteed as to accuracy or completeness Dnd the furmshlllg thereof)'; not, llnd under no c;lrcumstances IS to be construed as, 11 bon by WoJaton & Co Inc AU ('xpreaBlOns of opmion are subJect to chnnR'e Without notice li\'nlston & Co, Inc, and Offlccrs. DIrectors, Stockholders and Employees thereof. and may have an mterest m the SCCUritles mentioned herem market Jetter lB mtended Ilnd presented merely us n gcneral. Informal commentary on dn to rlo.y market news and nnt as a com1lete anahslB Adur\.lnnnl mformatlOn WIth lCSl'ect to nn)' seC\lrJtJes referred to hercm wdl be furni9hed upon r e q u e s t \\TN 301

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Tabell’s Market Letter – November 10, 1961

Tabell’s Market Letter – November 10, 1961

Tabell's Market Letter - November 10, 1961
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Walston &Co. Inc —– f \ Members New YOk Stock Exchange NEW YORK, SAN FRANCISCO LOS ANGELES PHILADELPHIA CHJCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 10, 1961 With volume increasing to better than 6 million shares on Wednesday, the market moved ahead sharply in the early part of this week and the Dow-Jones Industrials reached a high of 727.46 on Friday, within six points of the all-time high of 733.53. It was sugges – ed in this letter two weeks ago. that the market was about to establish a trend in one di- rection or another and this trend now appears established as upward, at least for the shorter term. Certainly a test of the 733 high can be expected, and if this is successful, a further move into the broad 725-835 area, envisioned as the long-term objective on the Dow, appears possible. The extent of this move will be difficult to determine until the action of long-term breadth and volume indicators ,over ,the next,few weeks is o.bserved. With advances having exceeded declines on every day for the past two we'eks;' short-term breadth has already improved encouragingly. The possibility of last week's action being the start of a year-end rally has been widely discussed in the financial press. The year-end rally is, actually, far .nore than a financial catch-phrase.It Is a statistically demonstrable fact that a rally of some magnitude has occurred at some time close to the year-end in every year since the Dow- Jones daily averages were first recorded in 1897. This rally has a pronounced tendency to start around the end of November or the beginning of December. It has, on occasion, started as early as the second week in October and, in many cases, especially when the rally was small, as late as the end of December. However, since 1942, the tendency of the rally to begin early has been accentuated and it has begun in the first week of'Decem- ber,or before, in 17 of the 19 years since that date. (This and the following data are base on the Dow-Jones Industrial average. ) How far does the rally generally carry If we find that in many cases the rise is minuscule, being less a back to 1897, we low to year-end close. However, it was greater than 50/0 in 35 6 ,a gr er than 100/0 in 11 years. Since 1942, it has hovered persistently ii 0 o. The average per- centage advance for all 63 since 1897t wa., in -6;-550/0-;–For the-1-9'years'smce 1942 the a mcr !'ias been-,6. ,95. The above figures are, of . from the viewpoint of the market student, but they represent it would be impossible buy 0 a mE8uretherallyfromlowtohigh.Since the question arises as to whether the year-end concept ha a ing tool. Here the answer is less certain, but it would appear possible timing of stock purchases do exist. For example, a study 0 e ix- period from the beginning of November to mid-Decem- ber in each year sho s ollowing data. In 38 out of the 63 years the Dow-Jones In- dustrial average wa gher at its December close than at its mean price for the first week in November. Comparable figures for the other weeks are 38 for the second week in November, 44 for the third week in November, 43 for the fourth week in Novem- ber, 41 for the first week in December, and 38 for the second week in December. Put- ting it another way, the purchase of stocks at the mean price for the last two weeks in November, followed by sale on the last day of the year, would have netted a profit approximately two-thirds of the time. This tendency has been even more persistent since 1942. Since that date, the Dow at year-end had bettered its mean price for the final two weeks in November in 17 out of 19 years. Unfortunately, however, profits which could have been made according to this formula have not been large. The largest,recorded prcIit is 9 and the largest , loss recorded in years when the formula did not work out is 110/0. Figuring both profits and losses over the 63 years, the average profit would have been only 1 1/20/0. Since 1942, the record is considerably better with an annual profit of 4 1/2 having been achieved. This result, attained by strictly mechanical methods, indicates that the year-end rally concept does have some value as a trading tool and that, on a statis- tical basis, purchases in the last two weeks in November have a tendency to work out well. The extent of the year-end rally into January also has a great deal of value in predicting the course of the market in the following year. Regular readers of this letter will no doubt recall discussions of this concept which have appeared in Decem- ber or January issues in the past three or four years. It will be discussed again in a future letter. W. TAlil;lii;l,l, d'n2A1lc83eumstnnces is to construed as, an offer referred to herem The lllformnhon Ql'\1racy or completeness nnd t.he fUrOlshmg'thcretr'ts not, a'tilJ ul'hlcr no i' to be eonstr\led !lS, n rcpresentn- …..t'iOilbyUWal't.'lirt&.a.e,r,-lhl! Art of OP1Dlon arc suhJect to change without notice Walston & Co. Inc. and Officers, Direetors, Stockholders and Employees thereof purcha;(', sell and may have nn interest In the 'leeUrltlcs mentIOned herein ThiS market letter IS Intended and presented merely as a general, mformal on day to dill' market neWB and not. as a complete anaiysiq Addltionui iniormntlOn With ICSpcct to any securities rcferrld to herem will be \\1'.301 – ,-

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Tabell’s Market Letter – November 17, 1961

Tabell’s Market Letter – November 17, 1961

Tabell's Market Letter - November 17, 1961
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Walston &- Co. Inc – – – – – Member8 New Yo'k Stock Exqhange ,,- NEW YORK SAN FRANCISCO l6s !.NGEt!S' PHilADElPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 17,1961 The market continued its upward trend during the earlier part of the week, and the Dow-Jones Industrial average reached an all-time high of 741. 80 on Wednesday. A decline in the two final sessions of the week erased a good portion of the advance, but th Industrial average closed 4.70 points higher on the week at 729.53. Late in October, this letter stated that from a timing viewpoint, several of the short-term indicators pointed to a probable end of the market impasse. Since that time, the Industrial average has moved up over forty points, or over 6. The pace of the advance has been quite rapid and probably some consolidation is needed as far as the gener market pattern is concerned. The 725-715 area should furnish a good support zone., Indi vidual issues will undoubtedly pursue their own separate trends regardless of the action of the averages. As far as our breadth-of-the-market indices are concerned, the short-term indi cators turned bullish two or three weeks ago and as yet there is no change in the pattern. On the longer-term breadth indicators, the picture is still negative. Our index has been moving up, but it is still well below the high reached in May, despite the fact that the Industrial average has reached 741. 30 compared to a high of 714. 69 in May. This, of cour e means that while the majority of better-grade issues that comprise the various averages are moving ahead, the bulk of the market is failing to keep pace. As noted in previous letter, this type of action can continue for quite some time. Poor breadth action usually gives a warning signal six months to a year before a general market decline. There has been no change in our long-term a long time. Quoted below is an excerpt from our letter of 96 e Industrial avera was 688. 66. The opinion outlined at that time . f today. The technical pattern of the market seve probabilities that this letter has been stressing for quite some ze — – (1) The-market is in ave-year b;ll market that started in 1949 and has in the Industrial average and much wider advances in (2) The Ind e ' r'fot reach its ultimate high for the bull market at the May high 7 . 6 e cal indications are that a high will be reached some where between 7 ce ow) and 835 (which seems high). An advance from present levels to th hig bjective would be an advance of about 200/0. Individual issues obviously cou 0 much better. (3) Afte the high is reached, a long consolidating period of several years' duration may take place with the Industrial average in a trading area between 800 and 550. The Industrial average probably will not decline below 500 in the lifei.Lme of any present investor. The October 1960 low was 564.23. The 1956 high was 525, Of course, any general prediction, even if correct, is meaningless unless the right securities are bought and sold. Many issues have probably made their high for the advance. Many others still have a long way to go. This letter continues to believe that as far as the general market is concerned, the broad 725-835 area is a selling range. The Industrial average could remain within the confines of this area for quite some time. Would use market strength to liquidate lower quality issues and to gradually upgrade accounts by the purchase of better quality issues selling at reasonable price levels. We have pursued the policy of removing individual issues from our recommended list as each individual issue reaches its upside objective indicated by its technical pattern. Two issues on our recommended list are being removed. FMC OORPO RA TION (93 1/2) recommended at 60 3/4, has reached the 90 obj ective outlined in the list of October 30th, and JEWEL TEA (763/4) recommended at 50 1/4, reached the objective of 80 at the recent high of 83. Dow-Jones Ind. – 729.53 Dow-Jones Rails – 151. 02 EDMUND W. TABELL WALSTON & CO. INC. ThiR market letter is not. and under no Clrcumstnnces 19 to be construed us, un offer to sell or a sohcitatiOn to buy nny securities T.cferred to herem The information contnlned herCm IS not guaranteed as to accursey or completeness and the furmshlDg thereof IS not, and under no circumstances IS to be construed as, n representa- tion by Wnlston & Co, Inc All expressIOns of oPinIOn arc subjcct to change Without nO!lce ,,'alston & Co, I,ne,' and Directors, Stockholde-NI nnd mployC(''1 the-reof, .sell and may bave an mterest III the seeurltlel TIe a .herem ThIS mnrkct.lottor IS mt.enOed I\n(!, merely 1.'0 \l. to herem

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Tabell’s Market Letter – November 24, 1961

Tabell’s Market Letter – November 24, 1961

Tabell's Market Letter - November 24, 1961
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FILE COpy Walston &CO. —-Inc —- Membej's N e1V York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 24, 1961 Nlixed markets predominated in the past week's sessions with declining stocks outnumbering advances. ;.fter the sharp rise of the past three weeks, the current ir- regularity is a normal technical development. Of longer term significance is the fact that the breadth index is still below the high reached six months ago in May. It is possible of course, that the breadth index will reach new high territory in the near future. This, however, will require a change in leadership. The rise in the early months of the year featured the glamour issues. This,in a an escape fr.om reality. 3upport a ' prices, so companies with-a strong trend of earnings growth were bid up tii rather ildi- — culous levels on the theory that future earnings would be sharply higher. This overspecul tion resulted in rapid declines of 30 to 60. Many of these stocks now have reached a level of at least temporary stabilization, but very few have formed sufficient reaccumu- lation areas to suggest a rise of any importance. More recently, a much higher-quality category of stocks has taken over the leadership. In the past few months, among the groups showing the best market 'action have been electric utilities, foods, finance, tobacco, drugs, and retail stores. These groups had been noted for their defensive qualities and usually sold at rather low P /E ratios and high yields. The recent rise has brought most of these issues to levels of 30 or more times earnings o.nd yields under 3. At these prices, they have lost a great many of their defensive characteristics. Moreover, from a technical viewpoint, most of them have reached the upside potentials outlined by their 1959-1960 base patterns. At least a lengthy period of consolidation appears indicated. Thus, if both the market and the breadth index high territory, new groups must take over. Most remaining f ture and a sharp rise in 1962 earnings will be necessary to bring 0. S1 e y. Most economists predict 0. higher level of business in 1962, bu whe this e will be sufficient to cause-,-. significantly eo.rnings 'in –s — s-is-stitl uncertain. Technio..- cally, there are a number of sufficient bases to indicate higher levels, including pipelines, rails, rubbers and textile. Oils also are showing 'mpro ca\pn1terns. From a i 0 plower-priced, speCUlative issues have been the features of the 1 market. 1;i hether this will again hold true is problem atical. Over a yea g, t' etter recommended twenty stocks selling below 20 a shar and early this l\r,arch d an additional five issues. 1,-ie strongly stressed the point that these i es should be bought as a package rather than concentrating on one or two issues. The reason for this stipulation is brought out by the diverse price action of this group in the past year, as shown in the complete list below. On an overall basis, the list has shown a rise of 28 as compo.red with a rise of 20ih-the Dow-Jones Indus- trial average from the time of purchase of each issue. Retention of the list is advised. marked are suggested as a package purchase for a possible sharp final up- swine in speculative issues with the proviso that they will be abandoned quickly if br8adt1 action does not improve. Price Price Price Price 11/4/60 11/24/61 Allied Faper 10 5/8 18 3/4 (3) Lmerican Standard 14 1/2 (1) 16 7/8 L'n vco 13 7/8 24 Eurlineton ffidustries 18 3/8 (1) 23 1/2 Camp'lell Chiboug. 5 7/8 6 5/8 Jt.lo.ul & P 15 1/- 15 7/8 cial Solvents 19 36 1/4 11/4/60 11/24/61 Kaiser Industries 8 -3/4 . 7/ Lear,Inc. 16 1/2 21 3/ McCrory Corp. Manhattan Shirt 13 19 (1) 22 1/ 29 3/ National Can 83/4 (2) 14 3/ Northwest lUrlines 15 3/4 Pacific Petroleum 10 1/4 29 3/ 12 1/ Ooayonier 16 3/8(2) 20 3/ ayne Plying Tiger Foote Eineral '-railer Gettv Cil 17 1/8 143/4 (1) 19 13 3/1 14 1/- 16 1/4 13 1/2 19 23 3/4. 15 1/2 Rohr Aircraft Servel Sun Chemical Victoreen Instrum. 15 12 1/8 13 5/8 165/8(1) 22 1/ 13 1/ 17 1/ 10 1/ k 'dhibd..t11;r,'no clrcums' es s tt4)C construJ-;t, nn offer to sell or 11 mn., contmned herem is not guaranteed na to Ilccuracy or completeness and the furnlshmg thereof IS Eo1, a d er 15 to as, tlon by. Walston &,C0-j InG-, AIJ.. eXWASSlOns of OPInion IITC subJcct to Without notilf'la'l.h toll.; QJl;.IlQnltSOIUHil.elJ1;eflls,as)cI..hbM, 8n nettna- Ed hllc an mterest III the securities mentIOned herem ThiS market letter IS mtended and presented merely as n general, . commentary Ol)t S t!'I.IiJ. new.s an1 not us 11 com plete analysls Addrtiannrl. ,infDW'(Iatlion W;lth J;urtllCS referred to herein will he ie J.-.D.L!JJ…I . ' \\'N.301 . .

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