Viewing Year: 1962

Tabell’s Market Letter – January 05, 1962

Tabell’s Market Letter – January 05, 1962

Tabell's Market Letter - January 05, 1962
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NEW YORK Walston &Co. —–Inc, —….;;- Members New Y01'k Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OfFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 5, 1962 fhe action of the past week may be an indication of what we may expect for most of 1962. The week featured extreme irregularity. Most of the weakness was concentra- ted in the overexploited issues selling at historically high valuations. The more real- istically priced stocks were firm or mOderately higher. The short livEd rally from the December 22nd low of 714. 60 to the December 28th high of 738.79 has apparently ended. 'As note(fi;;-our letter of Dec-emoer22no;'tlie December intra-day low of 714. 60 was an important point to watch. When the December low is broken early in the next year, the trend for the remainder of the year is usually down. Today's intra-day low was 709.74. Most economists expect 1962 to show an improving business pattern over 1961. The 1 Federal Reserve Board industrial production index, now 116, may reach 130 by mid-1963 The Dow-Jones industrials are estimated to earn around 31. 50 in 1961, increasir;g.; 15 to 20 to 36. 38 in 1962. There is only one fly in the ointment., Has the stock market already dis co unted the improving business pattern There is no doubt that, statistically, the market is extremely high as evidenced by the earnings trend and priceI earnings ratios of the Dow-Jones industrials in 1950 and from 1955 to date '-, , -1950 1955 1956 1957 1958 1959 1960 1961 Earnings 30.70 35.78 33. 34 36.08 27. 95 34. 31 32.21 31. 50 Avg. pIE 7.0' 12.2 14.9 13.1 17. 19.5 21. 5 From the 1950 low to the 1961 high the Dow has e earnings moving sidewise. This has been brought about by a ,.oe)fa s. st, the market was ridiculously undervalued in 1947-1950 period. for common stocks brought about, by an the as a tremendous deman increase in,institutional – funds available for investment. r ldence has risen sharply since the 1947-1950 period. /Yw lingness to pay three times as much for earnings in 1961 as in 19 The h' f ce factor is what makes the market vulner- able. A return l a o ,in our opinion, too fantastic to even consider. This would mean t e ould sell at 225. The investment bargains of 1947- 1950 will not be avai a gain in the lifetime of any investor, However, it is possible that a return to 19 aluations might occur. In 1956, the average pI E ratio was 14. 9 times earnings. If we allow for an increase in earnings to 38.00 in 1962 and apply a 1956 valuati'On of earnings the average would be selling at about 566. It can be said, with considerable justification, that straight annual ea rntngs since 1950 do not show the true picture because the quality and stability of earnings are much better today than ten years ago. The table below shows the cash flow earnings of the Dow-Jones industrials in recent years. These are earnings after taxes but before deducting depreciation and depletion 1950 1955 1956 1957 1958 1959 1960 1961 Cash Flow 40.35 53.20 51. 70 56.90 50.25 57.40 56.20 57.00 These cash flow figure s 'probably show a earning!;l,gr'!.. .. ever, even these figures indicate that the market is historically high. In 1956, the price cash flow ratio ranged from 8.9 to 10. O. A,pplying these ratios to an estimate of 65.00 cash flow for 1962 would result in range of between roughly 575 and 650for the industrial average for 1962. Low Jones Ind. Dow Jones Rails 714.84 146. 60 EDMUND W. TABElL WALSTON & CO., INC. This 15 not, and under no circumstances IS to be construed as, an offer to scil or n SolLclwtion to buy secuntIes referred to herein The information conta n erem 18 not gUaranteed as to accuracy or completenes8 and the furnI8hmg ill not. nnd under no circumstances 18 to be construed a8 a representn tlon by Walston & Co. Inc. AU expreSSlons of OOlnIOn are subject to chanp;-e wlthout notice. Walston & Go Inc. and Offlcers SU;ckholders and EmploYCf!1I thereof. purchase. sell and may ha.ve an mterest in the secuntics mentlOned herem ThlS market lettc'r 111 and OJ; a general ',nformhnl..commentnrl' on duy to day market news ang not us a complete nnalysls Ac1lLtlOnnllnformation Wlth respect to any securities referred to herem wlll urnls …. WI\ JOt

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Tabell’s Market Letter – January 12, 1962

Tabell’s Market Letter – January 12, 1962

Tabell's Market Letter - January 12, 1962
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&-Walston Co. Inc. Mem.bers New Y01-k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CKiCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 12, 1962 From a technical viewpoint, the Dow-Jones Industrial average reached its mini- mum downside objective at Monday's intra-day low of 698.42. The minor top formed in November-December at the 735 level indicated a decline to 700-695. There is, however, a broader top formation around the 730 level that was formed from August to Lecember. This technical pattern has a downside potential of 650-635. This is the maximum downsid indication shown by our technical work at the moment. The action of our breadth index should furnish an important clue to nearer term price action. This index, which has been acting worse than the market since May, also clined with'the averages -during the ,but September-low. A. decline below that level'would indicate the probability of 650-635 in the Industrial average Ability of the breadth index to hold above the September low and move above the l\Tovembe high would be encouraging. Continuing the discussion started in last week's letter relative to a possible re- turn to 1956 price valuations, it is interesting to apply this formula to the thirty individu issues comprising the Industrial average as well as the average itself. Last week we stated that the Industrial average was selling at an historically high price/earnings ratio even if cash flow were used rather than straight earnings. In 1956, the Industrial average sold at a ratio of 8. 9 to 10. 0 times cash earnings as compared to 10. 7 to 13. 0 times cas flow in 1961. Allowing for a rise to 65 cash flow in 1962 compared to 57 in 1961, and applying 1956 ratios, would result in a price range of 650-575 for 1962. However, if this same formula is applied to the thirty individual issues in the In dustrial average, some very diverse results occur. This is largely due to the changes in investment popularity of each issue in the past five trends. For example, American Tobacco was a rather st y the relative growth sR-e issue in 1f.56. At a high of 42 and a low of 34, it yielded 5. 9 to 7. 4 S O. t 4 times cash flow of 4.04 a share. In recent years, the issue has b c e m c re popular investment wise. The tobaccos are one of the groups c ifi s consistent growth issue accOrding to one r enti 0 sell'anrigher piE-ratios. Th question is whether this trend has b e a t ggerated. At the recent high of 111 /, American Tobacco was Applying 1956 ratios ld r a cash flow for 1962 and yielding 2. between 58 and 46 against today's clos of 991/2. We do no a acco stocks are going to return to 1956 valuation when they were r hey appear to be amply valued at the moment. -Techni cally, most of the t a e reached upside objectives. On the other side of the pictu is Aluminum Co. of A ca. This was an extremely popular issue in the early 1950's an advanced from a 19 ow of 13 to a 1956 high of over 130 in 1956. Earnings, which had shown a very nice growth trend, started to decline in 1956 and the stock reached a low of 60 in 1958, rallied back to 115 in 1959 and sold as low as 56 1/4 in 1961. Cash flow has dropped from 6.71 in 1956 to an estimated 5.75 in 1962. Applying the 1956 formula would result in a price range of 119-73 as against today's price of 62. Here again, we do not imply a return to 1956 valuations which were extremely high. However, Alcoa has probably discounted most unfavorable developments and does not appear too vulnerable. Technically, the aluminum issues are close to downside objectives. Other stocks in the Dow-Jones Industrial average that appear high when a 1956 valuation of current cash flow is used include General Foods with a 41-37 figure as against a 1961 high of 1073/4 and t0daY's price of 921/4, Procter & Gamble with a 47- 37 figure as against a 1961 high of 1011'12 and price of 86 1/2, and Sears Roe- buck with a 50-39 figure as against a 1961 high of 94 3/4 and today's price of 80 1/8. The steels still appear a bit high based on a 1956 valuation. Bethlehem Steel (41 7/8) has a 39-32 figure, and U. S. Steel (765/8) a valuation of 62-44. Yet, many of the thirty stocks appear tobemodestly priced when 1956 valuations are used. They include Allied Chemical (54 7/8) with a figure of 71-50, duPont (232) with a figure of 300-220, General Electric (71) valued at 75-65, International Paper (34 3/4) valued at 44-31, Standard Oil of New Jersey (51) with a prOjected range of 59-46, and Union Carbide (119 1/4) with a figure of 164-130. Swift & Co. ,(45 1/8), moreover, is considerably below its 1956 valuation.of 63-56. EDMUND W. TABELL 18 to he construed 88, an offer to sell or a I b ur y RC!!U1J les rtferred to hClem The lnfOrmatlO1l …….c'tfnULinMi as tt'l'ccu'laty or completeness and the thereof 15 not. and under no CIrcumstances UI to be construed as, II, representa- bon by Walo;ton & Co, Inc. All of opmion arc subJect to change Without nObce Walston & Co, Inc. and Offlcers, Dircctors. Stockholders and thereof. TlUrchuse, eel! and may have an interest in the securities mentioned herein ThIS market letter IS intended and prC'lentcd merely as II. general. informal commentary on day to day market news and not as a complete analysis Additional mforrnatlOn With respect to any referred to herem Will be –turmshed upon – r e-q- u e– s- t .-'——— — — – – — \\ N .301

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Tabell’s Market Letter – January 19, 1962

Tabell’s Market Letter – January 19, 1962

Tabell's Market Letter - January 19, 1962
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NEW YORK Walston &Co. —–Inc —- M embej's New Y oTk Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 19, 1962 The irregular downdrift from the November high of 741. 30 in the Dow-Jones In- dustrial average continued during the past week, and a new intra-day low for the move wa reached on Thursday at 690.21. At that level, the Industrials were very close to the Sept ber low of 688.77. From a technical viewpoint, it is interesting to note that our breadthof-the- market index is also close to its September low. In a sense, this is at least nega tively favorable. Since May, the breadth-of-the-market index has acted worse than the market.XThis is a necessary preliminary to better-than-market action by the breadth ind This observation would still be valid if both the Industrial average and the breadth index broke the-Septembe;ro.lows. on our technical work is 650-635, two-thirds to a half of the possible decline has already taken place. From here on the objective should be to watch for signs of a possible chang in trend. During a market decline, relative strength can be of great help in attempting to find the leaders of the next advancing phase of the market. Contrary to general opinion, t e stocks that are usually the leaders of the next advancing phase are the issues that decline the least and not the issues that declined the most. during the preceding downward move. It is possible for a stock to improve its r.elative strength even though it declines in price provided its decline is less than the average The Rail average is an illustration of improving relative strength. While both the Industrial and Utility averages are well below their December lows, the Rail average, at today's close of 148.26, has held above its comparable low of 139.74. In fact, the F ai average is a shade closer to its October high of 153.60 than it is to its December low. Th r is the possibility of a very strong lsmg-term technical question is one of timing. With the exception of a dl dow to The only 'in July, the Rail ave age has held in a comparatively narrow trading ,rou ,139 and 153 for a 1 of 1961. Ability to break out on the upside of this tag are uld be a most construc- tiveiechnicaJ development. The Western a -'s .-patterns for the intermediate uth r ek– ve the more attractive 17'2)7 Canadtan Pacific (253/8), Chicago, Milwauk Northern .acific (42), and b c u ,Chicago & Northwestern (205/8) i /2), are in our recommended list. Woul take advantage IJ1\e\ d to holdings. An exa e relative strength is to be found in the aero-space group. ''ne of the' s 0 recommended list, North American Aviation, reached a new high at 69 1/2 u' the past week, despite the downtrend in the general market. It entered our list 1/2. The oils are also showing good relative strength action and should be bought on minor price declines. Kern County Land (82 1/4), Kerr McGee (43 1/8), Louisiana Land (73 5/8), hillips etroleum (56 5/8) and Royal Dutch (35) are on our recommended list. inother oil issue showing excellent long-term technical action is Gulf Oil (39). 'urchase of this issue is recommended in the 38-35 range. On the speculative side is 'acific Petroleum selling at 15 1/4 on the jl,merican Stock Exchange. It has built up a strong technical pattern and has broken out on the upside of the 13-8 range in which it has held since late 1959. This stock sold at 39 in 1957. The meat packing group has also shown excellent relative strength in the last few weeks. Cur favorite is Swift & Co. (45 1/2). 'I'hishas been a very-disappointing '' issue up until now, but we still believe it is undervalued. Earnings should be higher next year after a disappointing fiscal 1961. Profit margins have been low in the meat packing industry and diversification has been sought. This has taken time. Swift & Co. has been slowly expanding its interest in the insurance business, and it is interesting to note that insurance earnings made up 28 of Swift's 1961 net. As a radical speculation, Internatio Packers (15 1/2) looks interesting. The risk here, of course, is the extremely volatile political situation in South America. Dow-Jones Ind. – 700.72 Dow-Jones Rails – 148.26 EDMUND W. TABELL WALSTON & CO. INC. Thl'l market letter IS not. und under no CIrCumstances is to be construed as, an offer to sell or n solicltatlOn to bu any referred to herdn The mformatlon contained herem IS not gunrnntced as to accuracy or completeness and the furnishIng IS not, and under no cIrcumstances IS to bc construed us, n repre;cnta- t!on by \Valston & Co, Inc All c,,presslons of oplnlon are BubJect to change Without notice 'Valston & Co. Inc. and Officers. Directors. Stockholders and Emilloyee, thereof. purchase. sell and may have an mterest In the I'CCUTltJeI mentioned herem Thll' market letter IS Intended and presented merely as n general 1I1formni commentary on dny to day market news nnJ. not as a complete analYSIS AddItional mformation Ith lcspect to any securities referred to herem WIll furlllshed upon request. .. 301 .

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Tabell’s Market Letter – January 26, 1962

Tabell’s Market Letter – January 26, 1962

Tabell's Market Letter - January 26, 1962
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Walston &Co. Inc. Membe's N elO YOl'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHJCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 26, 1962 ,At least insofar as the averages are concerned, the market is approaching a critical stage. The last major upmove in the Dow-Jones Industrials started on September 25, 1961 from an intra-day low of 688.87, and culminated in a newall-time high on No- vember 15th at 741.30. ,At the intra-day low of 689.11 on F ri day of this week, that advance had just about been cancelled out. However, the decline was not accompanied by inferior action in the breadth index, and, as of last week, both the longer-term and shorter-term breadth indexes had managed to remain above their September lows along with the avera1;esA's-has this-is'at-least negatively -' .At this stage, either one of two eventualities may take place. A decisive penetration of the September lows by both the averages and the breadth indexes, would, as has previously been mentioned, suggest a possible decline to the 650-635 area. This is, after all, not too far below present levels, and, at the moment, it is difficult to read top patterns which indicate any lower figure for the Dow. The other possibility is that the averages will hold around current levels, breadth will remain level or improve, and a new advance will be started from the present area. The extent of this advance would, of course, depend on how much of a base forms. . This is, of course, all very well, but it does little to suggest a specific invest- ment policy. Since late last year this letter has pointed out the high degree of risk in- herent in the market and has advocated reduction of risk exposure in investment accounts Based on the possibilities above, there is no reason as yet to change this suggestion. However, risk exposure may be reduced in many ways. way is the outright sale of equities in order to reduce debit balances, or to d l'his may be ap- propriate in conservative accounts. However, r' K be accomplished by the elimination from portfolios of fully ations ng at a high price in ' Lelation g.pd their th raJle and technical patterns which are has been pointed up by the past dec! 0b 1h ric 'n relation to earnings. This securities such as Swift &. , North American Aviation higher at their lows of last week than at their highs er-N It beco 0 vident that today's markets are characterized by shifting preferenc ' . rather than by all-encompassing bull and bear markets, and there appears to e' reason to expect that this type of pattern will not continue to obtain. An inter g example of this type of shifting preference is shown in the following table giving prices of eight securities at their September lows and their January 24th lows. It will be recalled that on each of these dates the Dow was approxi- mately at the same level. Low 9/25/61 Low 1/24/62 Low 9/25/61 Low 1/24/62 American Motors Brunswick Fairchild Camera Great \Vest. Financial 18 1/8 57 5/8 1/2' 55 3/4 Adjusted 15 1/4 39 1/2 , 59 1/2 37 .- Armour Daystrom TXL Oil Pacific pete 42 34 1/4 14 7/8 10 1/4 – 51 3/4 40 23 14 3/4 The above figures speak for themselves and emphasize again the importance of considering downside risk as well as upside potential in investment decisions. Even with the sharp drop that has taken place thus far in the market, a large number of issues are still vulnerable to agonizing reappraisal. In other situations, as fundamental and technical analysis can show, risk is relatively small and potential, over a period of time, can be great. It is such issues that should form the backbone of any investment portfolio, regardless of what course the averages may take. Dow-Jones Ind. 692.19 QQ'lT TQ,p j9 Pails 14 6 86 ANTHCNY W. TABELL WALSTON & CO, INC, ThiS mllrket letter IS not, and under no Circumstances IS to be construed as. an offer to sell or II sohcitatlon to buy any secUrIties referred to herem The mformatlOn contnmed herein IS not guaranteed as to accuracy or completeness and the furnlshml'' thereof IS not, and under no Circumstances is to be construed as, a reprcsenta- tlOn by Walston & Co, Inc. All expressions of oPinIOn are subJect to change WIthout notice Walston & Co, Inc, and OffIcers, Directors, Stockholders and Employees thereof, purchase, sell and may have an mterest In the securitaes men boned herem This market letter is mtended and presented merely as n Stel'!ernl. informnl commentary em da to dn market news and not as a complete anah'sls AddItIonal mformallOn WIth rc;pcct to nny SeCurltles referred to herem wlll be furnished upon request .. . .. \\,N 30t

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Tabell’s Market Letter – February 02, 1962

Tabell’s Market Letter – February 02, 1962

Tabell's Market Letter - February 02, 1962
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Walston &reo. Inc, – – – – – NEW YORK Mernbel'S New Y01'k Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 2, 1962 Cn DlZonday, the Dow-Jones Industrials tested the September support level and, after reaching an intra-day low of 686. 89 on diminished volume, rebounded sharply for the of the week. Friday's intra-day high was 709.34. From a technical view- point, the most important development was the ability of our breadth index to hold well above its September low. The breadth index turned down after reaching its high in May, a thereby predicted the irregular diverse price ac tion which has taken place since that ti Since May, despite the fact that the averages are still very close to the 714 level reache in tha t month, many issues are down 300/0 to 600/0 while many' othershave–moved substanti higher. Every market decline since May has been preceded by worse-than-market action by the breadth index. In the last three weeks this divergence has changed and the breadth index has acted mlre like the market. This is a necessary preliminary to better-than- market action. P,s this letter has continually stressed, the action of the averages at this stage of the market pattern is probably of only academic significance. It is difficult to visualiz a swine of much more than fifty points either side of 700 in the foreseeable future. As fa as individual issues are concerned, the pattern is quite different. Many stocks have been in a bear market trend for nine months with no indication of an immediate change. At the same time, many other issues have broken out on the upside of base patterns and indicat higher levels and many others appear to be still forming bases prior to an upside breako t. Since the first of the year, several groups have shown above-average action. Th oils have been outstanding. Several oil issues are in our recommended list. Kern County Land (84), which entered our recommended list at 53, reached the lower limit of our 85- 0 projection, but we are inclined to raise our sights to issues have al 0 shown above average action. Boeing (55 3/8), recWl'l-me d d Lty 3f reached our 55-6 objective at this week's high of 565/8 and is om recommended list. North I merican A,viation C!,,7 5/ 81, ..Qn..Qur list tion'price of 41 172, reached a new high at 8 anWa acted. This is our favorite aero-space issue and we advise its et '0 0 0 rm holding and would buy on min r (24 3/4) and J. J. Stevens (3 / , recommended list, reached new high terr tory. Beaunit Do'ills ( s a'hractive technical pattern and we are adding it to our recomme . t. . e os. (191/4) is suggested as a speculative purchase in this group. The a g o appears to be in a long-term uptrend. Consolidation Coal ( 43 7/8) appear to e most attractive in the group and is also being added to ou recommended list. rts on this stock and Beaunit Mills will be issued shortly. International Minerals & Chemical reached a high of 54 1/4 in October and re- acted to around the 44 level earlier this year. It has now recovered back to 51 1/8. This stock, which entered our recommended list at 32, continues to have a most interesting long-term potential. In view of the worldwide population explosion, the potential need for an increase in the food supply is enormous and will require large quantities of plant food. I'3L is the world's largest and most diversified agricultural chemical company. Having spent lver 110 millions in the past decade, the company is in an excellent position to from the potential growth in demand. Sales for the fiscal year ending June 30th should again establish a new record and earnings of 3.25 a share are anticipated. This i;; a modest improvement over the 13.07 earned last fiscal year. -The vast high-grade Dotash deposit in Canada at .2;sterhazy, Saskatchawan, will be brought into production lat this Spring. ,P,fter problems in shaft sinking, the shaft is now down to 2700 feet and is proceedin,; at the rate of 10 feet per day, with an ultima te depth of 3200 feet. -otential earnings from the .2sterhazy operation are estimated at a possible 2.00 per share in 1963, increasing to J;3. 45-3.65 in 1964-1965. If these projections are realized, consoli- dated (let profit could be in e,;cess of );7. 00 per share in the 1964-1965 period. The long- term technical oattern is favorable and the Dotential is considerably above present levels 'n the the entire 50-40 to be a strong support level. The issue is an excellent vehicle for growth and long-term price appreciation. Dow'-Jones Ind. 706. 55 r'QUTJOpeS Pails il,e. B, .dDI\(fUND W. TA BELL & CO. INC. ThIS market letter 18 not, and under no circumstances IS to be construed as, an offer to sell or a sohcltatlOn to buy tmy securities referred to herem The information contained herem IS not guaranteed a to accurncy or completeness and the furmshmg thereof IS not, and under no Circumstances IS to he construed as, n represent,,- tlOn by Walston & Co, Inc All expressions of opmlOn are subJect to change WIthout notice Walston & Co, Inc., and Officers, Director!', Stockholders Ilod thereof, purchase, sell nnd may have an mterest In the securitIes mentIOned herem ThiS market letter IS mtended nnd presented merely as II. Il'cnerul, mformal commcntm yon dny to day mnrket news and not as (I romplete analySIS AddltlOnnl mformatlon WIth rcsileet to any seClIrltl(!S rcferrerl to herein will be furnished rC'lucst WN J01

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Tabell’s Market Letter – February 09, 1962

Tabell’s Market Letter – February 09, 1962

Tabell's Market Letter - February 09, 1962
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Walston &CO. Inc. FilE COpy Members New York Stock Exclw,nge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER F'ebruary 9, 1962 At Thursday's intra-day high of 719.86, the Dow-Jones Industrial average the lower part of the overhead resistance area at 720-740. This is the area in which the average held during November and December before the downside breakout and the declin to the January low of 686. 89. This heavy supply area will probably hold back the average at least temporllrily. The breadth index continued its improvement during the past week, but is still quite 'some distance below the high reached in May, and also below the high reached in November. It is, however, approaching the downtrend line connecting these t rc highs. The extreme selectivity continues. The Rail average has retraced more than 1000/0 of its decline from the January low. The Industrials have retraced a n1)rmal 660/0 of the decline while the utiiitfes only '300/0of the'declilfe';-We are still'ORhe'opihH n – ' that extremes of the Industrial average for the foreseeable future are roughly 750 and 650 and that the action of individual issues is much more important than the averages. The Meat Packing stocks are one of the groups that have shown above average action in recent markets. Wilson & Co. (55 1/4), reached new high territory at 55 3/4 anc Swift & Co. (46 1/2) at the week's peak of 47 1/2, was approaching the 1961 high of 49 1/ . The outlook for the industry is favorable. A sizeable increase in livestock supplies is ,predicted for 1962 and meat packing operations should show good earnings gains. tlentift supply enables the spreading of the overhead costs over a larger volume. Also, wholesal prices tend to lag behind the changes in the livestock prices. The meat packing business is a high-volume, low-profit operation and even a slight change in profit margins can re- sult in a sharp reversal in earnings. Because of these wide earnings fluctuations, meat packing companies have taken steps to lessen profit swings. Some excess capacity has be eliminated and new plants have been built near livestock centers rather than in Chicago, thus eliminating the long ,rail or truck haul. Product portant role. A steadily rising percentage of total inc e ,also played an 1lIupplied by opera- tions other than meat packing. i'dlson & Co., for example, is the ufacturer of sporting gooj! , .- -Rl'ofit ,.suiHti, . 5velygoodeac!n!ngs for the company. Wilson & Co. b eat operation in the industry. Ex- cess plant capacity has This favorable performance s n e'tained capacity has been modernized. in the price action in the stock over the past five From a technic i di 1 7 the stock has risen over 3500/0 at this week's hi h ,,,'s upside breakout indicates higher levels over the longer term. By compari on rwlft & Co. had done poorly. From a 1957 low of 26 3/4, the stock has risen les n 1000/0 and is still below the 1954 high of 51 1/2 and the 1955 high of 52 1/2. Its potentials are most interesting, however. In the fiscal year ended October 31st, earnings of Swift & Co. declined to 2.01 from the 3.09 earned in fiscal 1960. This reflected the narrower profit margins which effected the entire industry in 1961. As note above, current improvements in the supply of both cattle and hogs in the year ahead shou d reverse the unsatisfactory profit performance of 1961 and earnings estimates for fiscal 1962 range from 3.50 to 4. 50. Swift & Co. has been engaged in a vigorous campaign of modernization and diversification to improve profit margins which are low compared to V\,ilson & Co. Swift's profit margin in fiscal 1961 was one-half of 10/0 compared to 1. for Ihilson. Swift has 400 in sales behind each share outstanding, so an increase in profit margins could Obviously result in sharply higher earnings. Included in the compan, ' expanding activities are agricultural'chemicals, dairy products, fire-casualty-and life ins- urance companies, vegetable oil shortenings and insecticides. A meat tenderizer, Proten also has an interesting profit potential. Swift-'s non-meat packing activities alone gene- rate sales estimated at 800 million annually. They account for over one-third of total sales and a much larger share of profits during adverse m eat processing periods. The expanding insurance business has been particularly profitable and made up 280/0 of Swift's fiscal 1961 net. Swift & Co. is on our recommended list. The technical pattern is ex- cellent and it is recommended for long-term holding. Dow-Jones Ind. 714.27 Dow-Jones Rails 148. 64 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter is not. and under no Clrcumstnnces lS to be construed as, an offer to sell or a sohcitatlOn to buy any secuntles referred to herem The information contained herem is not guaranteed as to accuracy or completeness and the furnishing thereof IS not, and under no circumstances IS to be construed as a representa tlOn by Wnlston & Co, Inc. All expressions of opmion are subJect to change WIthout notice Walston & Co Inc and Officers Directors SU;ckholders and Employees thereof, purchase, Bell and may have an mterest in the seeurities mentioned herem. ThlB market is nnd p'relentcd m'erelY as a gC!lleral, mfOImal commentary on day to day market news nn4 not as a complete analYSIS. Addlbonal mformatlOn WIth respect to any SeCUrltIes referred to herem WIll be upo.n. . . \\'N Jl

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Tabell’s Market Letter – February 16, 1962

Tabell’s Market Letter – February 16, 1962

Tabell's Market Letter - February 16, 1962
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Walston &Co. Inc !Ifembers New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CI-YCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 16, 1962 The market is feeling the effects of the overhead resistance centered between 72 and 740 in terms of the Dow-Jones Industrial Average. It is interesting to note that the intra-day high for the past seven days has been between 721 and 717. However, selectivity continues. Although there have been many more new highs than lows, two major steel companies, U. S. Steel and Armco, reached new bottoms dud the past week. At the same time, many stocks on our recommended list reached new hig s including Beaunit Mills, Cluett Peabody, Ex- Cell-O, International Minerals & Chemical, 'Jewmont Mining, Schlumberger (formerly Daystrom) and J. P. Stevens. Consolidation CoaL.. wbicQ also high is reviewed belo.!. In addition, we are adding J. Ra,y. McDermott to our list. It wili 'bereviE;wed-Shortly. . – -v' CONSOLIDATION COAL COMPANY Current Price Current Dividend Current Yield 46 1. 40 3. 00/0 Long-Term Debt Common Stock 18,300,747 9,081,839 shs. Sales, 1961 Est. 230,000,000 Earned Per Sh., 1961 Est. 2.00 Market Range 1962-57 461/2 – 27 On November 20, 1961, Consolidation Coal Company shareholders approved amend ments to the company's articles of incorpor tion widely broadening its powers to make long-term investments outside the coal area. The reasons for this amendment were succinctly explained in the proxy statement whi stated that, basically, a coal mining company…. is a self-liquidating enterprise…. To continue in (the coal) business, cash gene rated by depleting coal reserves must normally be used maintain existing properties, and to develop new ones. e additional reserves, t c pany pointed out, ho ever, Consolidation's reserves are n,ow quite 0 t k c e . nticipated produc ion during the foreseeable future. It lS, therefore, 1 e c s mterest to use the ConsolldatlOn lS ln an and, to nake new investments . ties, WhlCh lnclude some 0 t 0 11 .uer. . bo broaden its operations in the co 1 American business. Its coal proper best maintained in the country, have past four years e te d ' stry-wide production, plus an additional cash flow from depreciatio d et' mounting to 1. 77 a share in Uj60. A large part of this cash flow is not re ire maintenance of coal properties, and under the broadened e used for expansion both in and out of the coal field. Financial position is unusua strong with current assets exceeding all liabilities by some 82 million. In addition, the company has investments of some 40 million at book value, probably worth a good 10 million more at market. The following projects, all fairly recently announced, give some indication of the direction in which the company might mo (1) A merger with Truax-Traer Coal Company on a share-for-share basis has been proposed. This will increase pro-forma earnings sliGhtly and give Consolidation access to attractive mid- V. estern markets. Upon completion of the merger, Consoli- dation's dividend will be raised to 1. 60. (2) The company is cooperating with Texas Easto;rn Trans mission to build a pipe line from the Vi-est coa!. fields, transporting liquified coal to ti1e 'Jew York and Philadelphia areas. Appro-val by the State of Marylancris now 'tile 'only-obstacle In'-the- path of the construction of such a line. (3) It was recently announced that Consolidation has acquired a little over 10/0 of the stock of Chrysler Corp. Since George H. Love is Chairman of both companies, the Chrysler investment becomes rather interesting. (4) Mr. Love, late last year, said that Consolidation was studying about six companies as possible investments. In summary, excellent management, a strong balance sheet and large cash flow seem to indicate that Consolidation will be able to develop extensive new areas of profitability as time goes on. The stock, recently added to our recommended list at 43 7/8, is again suggested for purchase in investment accounts. Dow-Jones Ind. 716.46 Dow-,Tones Bails 149.04 ANTHONY W. TABELL WALSTON & CO. INC. ThIS market letter IS not. and under no IS to be contrucd nn offer to I'ell or R BobcitatlOn to buy Ilny BecuritIes referred to herem The informatIOn contnincil herem IS not guaranteed as to accuracy or completenese and the furnishmg thereof IS not, and under no clrcumemnces 18 to be com'trucd a', a representa tIon by Walston & Co., Inc All e,,presslons of opinIon arc suhJeet to without notice Walston & Co, Inc, and Officers. Dlrectors, Stockholders and Employees thereof, purchasc, sell and may ha\e an interest In the seeurit.eq mentioned herem Thi market Jettel' 1; intenrlcd and presented mel'ely as a general, mformnl commentary on day to day market news and not as a complete IlnaiYlls. Addlbonal information ith respect to any seCUtltlCs referred to herem ill be . . .. . ., \yN 301 .– r

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Tabell’s Market Letter – February 23, 1962

Tabell’s Market Letter – February 23, 1962

Tabell's Market Letter - February 23, 1962
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Walston &Co. Inc. ;,…-…..;– Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND oveRSEAS \, TABEll'S MARKET lETTER February 23, 1962 Reaching a lo',v of 705.09 on Friday, the Dow-Jones Industrial Average broke out of the 11-day 721-710 trading range. Cn all of these 11 days the intra-day high had been between 721 and 717, The small top formed suggests a possible dip to 700-690 as part of an attempt to enlarge a longer-term formation and eventually push through the overhead supply between 720 and 740. A decisive penetration of the January low of 686.89 would d s troy this potential base and suggest a possible 650-635. For almost a year, the Dow-Jones Industrial Average has held in a 100/0 trading ran between 741. 30 and 673.49. In terms of an individual stock, this is comparable to a trad n area between 74 1/-8 and 67 3/8. On -the-face of it, this is hardly an exciting performance but the nar-row trading range is actually the result of averaging out some very wide price swings, both up and down, in individual issues. We could fill several pages with lists of stocks that, since April, have either (1) declined 250/0 to 500/0, (2) advanced 250/0 to 500/0 or (3) have done nothing. For the past year, this has been a market in which it would have been possible to have been long of some stocks and, at the same time, short of others and to have made sizeable profits in both positions. Our technical work tells us that this selective type action will continue. We en- vision neither a roaring bull market nor a catastrophic decline. For a long time, our up- side potential for the Industrial Average has been 725-775. The lower part of this area was reached at the November high of 741. 30. \Ve would continue to lighten commitments in this area. On the downside, the most pessimistic projection at the moment is 650-635. We would be a buyer on balance if this area is approached. In the meantime, we would co – centrate our attention on individual issues rather than on the swings of the general marke Our recommended list consists of 70 issues. Individual each situation warrants regardless of the action of the a e a be added or dropped a 0 A bit of historical background might be Dow-Jones Industrial Average was selling at 8 tim h's in. e 1949 low, the rnings leld 6.70/0. At that leve the market was ridiculously undervalued. trial -i The bulk of the rise occurred in th e' b we 9 0 the 1961 high, the Indusulib-';oroken ao'Wrdiitedwopha e 949 and 1956-1957. During this firs phase, the average e to a high of 525. Earnings advanced from a 1946-1949 low chip investment i s 8 1957. The leaders of the rise were the blue rv ion of 1949 was corrected during this first phase. The second 0e nce has had a different background. The 1957-1962 market has had nei r th sistance of a drastic undervaluation nor a rising earnings trend. Earnings on th w-Jones Industrials have so far failed to better the 1957 peak 0 36.08, although th probably will do so in 1962. Despite the lack of earnings increase, the Industrial Average has advanced 410/0 from the 1956-1957 high of 525 to the 1961 high 741. In a sense, the advance has been an escape from reality. With earnings of many of the largest cyclical-type companies showing no increase, the purchase of other issues wa justified on the basis of projections of long-term growth in earning power rather than on immediate earnings. Most of this buying was concentrated on consume r goods issues. Some of the buying was in better quality investment issues which advanced to newall-tim highs in i E ratios and lows in yields. Also, unfortunately, a great deal of irrational bu ing came into a rather motley group of marginal stocks and industries, particularly in the new issues field. Some of these stocks have already had drastic price declines, but the correction of the excesses probably has osomewhat further to go. On the favorable side of the picture, there are many issues that are showing excel- lent technical action. In the main, they consist of groups that appear relatively under- valued. Many of them are in the blue chip investment group that led the 1949-1957 advance and have done little marketwise for the past 5 years. Others will be found in groups like coal, meat packing and textiles that have been in investment disfavor for a long period of time. The cross currents of adjustment necessary to build up a more normal market structure probably will result in a wide trading area for a considerable period of time. This consolidation period should be used to upgrade the quality of holdings both from a viewpoint of safety and ultimate price appreciation. Dow-Jones Ind. 709.54 EDMUND W. TABELL 18 un er no Clfe mstnnces IS to be construed as, an offer to 'ell or a solicitatIOn to buy any Bccur;tJes refered to herein The Jnformnhon contamed herem is not guuranteed (1'1 to nccurncy or completeness and the furmshIng thereof IS not, and under no Circumstances IS to be construed ns, a representn. 110n by Walston & Co, Inc. All expreS'llOns of opmion are subJect to change Without notice Walston & Co, Inc, find Officers, Directors, Stockholders and Employees thereof, purchase, sell and may hQ.ve an mterest III the secUrities mentioned herem This market letter IS mtended and presented merely as a genernl. mformal commentary on day to day market news and not as a complete anllbBI!!. Addlbonnl mformatlOn With respect to any securities referred to herem wdl bt . . .. . .. .-. . .. . WX 3Dl

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Tabell’s Market Letter – March 02, 1962

Tabell’s Market Letter – March 02, 1962

Tabell's Market Letter - March 02, 1962
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NEW YORK Walston &- Co. ———Inc.——— Members New York Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA CH.JCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 2, 1962 After reaching a low of 702.91 on Monday, the Dow-Jones Industrials recovered later in the week and reached a high of 715.89 on Thursday'. It appears probable that w are witnessing the initial stages of a base, formation from which another penetration of th heavy overhead supply between 720 and 740 may be attempted. For the moment, at least, as pointed out last week, the downside risk appears to be minimal with the small top for- mation of a few weeks ago suggesting nothing more than a decline to the 700-690 area. I portant points to watch are the recent high of 721. 39 and the January low of 686. 89. ,The ma,in reason recent ratherspotty to be a lack of buyi'ng- interest rather than any particular increase in 'selling pressure. UrulerSuCh cond' – tions the process of base formation could take a good deal of time and extreme selectivit will, no doubt, continue. In line with this probability we are making further changes in our recommended lis . We are removing from the list seven securities which have either reached upside objecti e or have had sharp drops in relative strength, and we are adding five new recommendatio s The seven securities being deleted are American Metal Climax (36), American Optical (65), Carpenter Stee1(45), Granite City Steel (41), Mississippi River Fuel (39), Pitney Bowes (60) and Sterling Drug (86). These seven, plus Boeing, removed a month ag , make eight deletions since the first of the year. Six of these eight stocks have performed better than the Dow-Jones Industrial Average from the time of their recommendation to . the time of removal with three of them having advanced more than three times as much as the Dow. One stock advanced slightly less than the Dow, and one (Carpenter Steel)sho a small loss. The five stocks being added are Bendix Corp. Zellerbach (56), Murphy Corp. (28) and Union Ba -Cam e, For some weeks now, a number of cyclical p , a ay marketwise since 1956, have tended to show impro ct group which,although the. , of having reached a long-term sented in our list by Gulf eil (44) a r int ional oils are already repre- l t c . Murphy Corporation is an entire- ly different operation. A f'oducer with one of the better growth . records in the industr ,the c s able to increase both net income and cash I flow in every yea c, t' year's results should extend the improvement. 1961 earnings we a . 43 per share with cash flow of some 3.40 per share. Another majo lic rea which appears attractive for new buying is the paper l industry and we are sting Crown Zellerbach and Union Bag-Camp Paper as partici-' pations in this grou bright future. 2aper and paperboard production should continue to reach new highs and slower expansion of capacity after a number of years of sub- stantial additions to plant should improve the supply-demand relationship. This has al- ready been reflected in scattered price increases, and as sales continue to grow it would appear logical to expect improvement in operating margins rather than the pres- sure on profits which has characterized the industry of late. Bendix appears to represent a diversified investment in a number of attractive fields including the automotive, aviation and aerospace areas. Earnings for the year to end September 30, 1962 should show substantial improvement over the depressed 4.45 for 1960-196l. The well-covered 2.40 dividend offers a 3.40/0 yield. -Burroughs Corp. appears-to be-one of the more attractive participations in the growing office equipment field. The nadir of the company's fortunes was reached in 1958 when heavy research and development expenditures reduced earnings to 97, and the stock declined from a 1957 high of 52 3/8 to a low of 27 5/8. Since that time profits have shown steady improvement and there is considerable evidence that the company has gained a strong foothold in the electronic data processing market which could well turn out to be highly profitable. Earnings improved to 1. 58 in 1961 and the improve- ment for 1962 could well be the most substantial so far. Estimated fourth quarter 1961 results of 75 were the highest for any quarter in the past five years. Dow-Jones Ind. 71l. 00 Dow-Jones Rails 146. 25 ANTHONY W. TABELL WALSTON & CO. INC. This market Ictt!r IS not, and under no Circumstances IS to be construed as, an offer to o;ell or a SoliCitatIon to buy any secUrities referred to herem The mformatIon conmlned herC1n IS not gunranteed as to accuracy or completeness and the furlllshml!' thereof is not, and under no circumstances IS to be construed as, a representation by Wal'lton & Co, Inc AU I;lxpreSBlons of OPlnlOn are subject to change without notice Walston & Co., Inc, and Officers, Directors, Stockholders and thereof, purchase, sell and may have an mterest m the secUrIties mentlOned herem. ThiS market letter IS mtended and presented merely as a general, mformal commentary on day to da)' market news and not as a complete analYSIS AddltfonaJ mformatlOn With respeet to o.ny seeurltzes referred to herem Will be .. . .. . \\,N 301 ..- …………………………..

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