Viewing Month: July 1962

Tabell’s Market Letter – July 06, 1962

Tabell’s Market Letter – July 06, 1962

Tabell's Market Letter - July 06, 1962
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FILE COpy Walston- Inc &- Co. \, Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 6th, 1962 Breadth-of-the-market action has improved. During the past several days, our daily breadth index has shown the sharpest advance since early 1961. This action is not yet reflected in our longer term breadth index, but such a development could take place in the relatively near future. It was the relatively unfavorable action of this index that prompted our cautious attitude toward the market last August. At that time, breadth turned down despite the fact that the averages continued to advance. This worse-than-market action, led us to counsel a policy of selling on strength, Door action the abortive Spring rallY' further strengthened our bearish fee.ing. , InApril, the market turned-a6w-n'with flie breadth index,and-)oth-indiceshave ', I moving together since that time. Before a definite change in trend is indicated, the breadth index should act better than the market averages. Last week's action is the first indication that this may occur shortly. The rally from the June 25th intra-day low of 524.55 on the Dow-Jones Industrials carried back to 586. 30 on Thursday. A one-third retracement of this relatively rapid advance wo,ud bring the average back to the 565 area. Friday's intra-day low was 571. 28. A later extension of the rally could result in an advance to the 610-620 level, which is the objective of the base pattern formed during June. After that some further backing and filling would be needed to enlarge the longer-term potential base. The 560-550 range should now be a solid long-term resistance area. From here on the action of individual. issu-es should be more important than the action of the various averages. Last week this letter mentioned a number of possible candidates on our recommended list as purchases on weakness. We are contin uing this review with four more securities which appear Woolworth (68), a favorite of this letter for i a a price less then the market value of the 52.7 interest in its y. s, in effect, the entire U. S. operation and the highly profitable Wes,\ xican and Canadian subsidiaries are-being – 0-dividendprovides a-fair- – yield,and expansion into diSCOUntinms \), holds promi.se. \0J 0 million expansion program U. S. ,lywood (43) double sales since 1954 but the earn- ings record has been atrprice structure. Thus, the fact that earn- ings recovered . e . e year ended April, 1962, from a depressed 2.55 in the prio si cant, in that U. S. Jlywood was able to show good results despite low ice 1ch prevailed during most of the period. Any future imp- rovement in the buil market andlor strengthening of products prices could increase earnings substantia y,and the company is now being appraised at a conservative mult- iple of its 1961-1962 showing. Burroughs (37) is well along the road to recovery, but the present price appears conservative when viewed against the ultimate potential. Heavy development costs in recent years reduced earnings to 97 per share in 1958, from which level they have trended steadily upward to an estimated 1. 80-2.00 for 1962. That even greater increases are possible, however, is evidenced by the fact that net income from for- eign subsidiaries in 1961 '\liIls 11. 1 million while reported total net income was only 10.5 million. Thus, the domestic operation, which accounts for the major portion of sales, was still showing a los.. of this lo,ss to a prof!!- in years obviously creates highly favorable earnings prospects. Cn the face of it, the earnings of lVIurphy Corporation (16) have held in a narrow range between a 1.17 and 1. 36 per share since 1956. A glance at the cash flow, normally the most important measure of an oil company's growth, however, tells a somewhat different story. Cash earnings have increased in every year since 1955 and in 1961 were approximately 3. 37 per share. The company has one of the better records in the industry insofar as oil and gas exploration is concerned,and there is little reason to expect that the growth in cash flow will not continue. Thus, the current price which marks the stock at only five-times 1961 cash earnings, appears highly con- servative. Dow-Jones Ind. 576.17 Bow JUlIeS Rails – 4e ThiS market Jetter ie not, and under no circumstances IS to be construed as, an offer to OrEDMUI\TD W. TABELL OVALS I or fl sohcil;ntlOn to buy any secl,lTlbes rc err ere'n' e l Jrmntlon contamed herein is not gunranteed as to accuracy or completeness and the furnlshmg thereof lS not, and under no nl'cumstances IS to be construed as, a representa- tIon by Walston & Co , Ine All expreSSIOns of oplmon are subJect to change WIthout notlCC. Walston & Co, Inc.' and Offlcers, Directors, Stockholders and thereof, purchase, sell and may have an Interest m the secUrlUec mentIOned hercm ThiS market letter lS mtended and presellted merely as gencral, Informal commentary on day to day m\rket news anq not as a complete 'lnalYSlS Additional1nformatlOn With respcct to allY securities referred to herem be furmshcd upon rCiucst. JOl

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Tabell’s Market Letter – July 13, 1962

Tabell’s Market Letter – July 13, 1962

Tabell's Market Letter - July 13, 1962
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Walston &Co. Inc – – – – – FLE COpy Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 13th, 1962 The market rally continued for most of last week with the Dow-Jones Industrials reaching an intra-day high of 599.(J2on Tuesday. Breadth action was unusually good with better than 1, 000 advances chalked up in Tuesday's session. Through Thursday, the average had advanced some 14 in twelve trading days, and at this week's high, had recovered about a third of the loss since the April high when the most precipitous portion of the decline began. As this letter has previously .pointed out;'-aboutzthe -'0 – – ' late last month is 615-630. From a short-term point of view, therefore, it would seem prudent to utilize rallies for the sale of unfavorably-situated issues, later using the proceeds to purchase attractive equities on weakness. en a longer term basis, however, a number of encouraging signs continue to accumulate. The recent reduction in margin requirements was a rather 'obvious response to the sharp drop in the use of stock market credit and the apparent cooling of the speculative fever that raged in 1960 and 1961. It is interesting to note, however, that the Federal Reserve Board, inadvertent- ly or otherwise, has had a rather good record of predicting market turns. ThrEe times since 1949 margins have been reduced to 50, and each of these thrEe' reductions took place within three to six months of a major stock market upturn. It will be interesting 'to see whether this occurs again. (\' 0 Of deeper significance is the number of patterns that are beginning to develop in many industrial groups. and er theorists have ,pointesl out and.third being downward movements with an een. Thus the table below, which shows the action of DO; Average an.. Standard & ryoor's International Oil Index since 5 0\ 1956-1957 High W JiA 524.37 S& -oJ Oil Index 96.78 1957 Low 416.15 72.46 1959 High 68B.2l 88.00 1960 Low 564.23….. 70.20 1961 High 741. 30 88. 54 1962 Low 524.55 79.83 i;ven a casual glance at the above figures will show an obvious divergence. The Dow made successive new highs in 1956-1957, 1959 and 1961. In addition, the 1960 low was above the 1957 low, after which, in 1962, the 1960 low was exceeded. By contrast, the Oil Index failed to reach a new peak in 1959 and barely exceeded its 1959 level in 1960. And, although the 1960 low was, unlike that of the DOW, below its previous bottom, the index did not even approach a new low this year. The conc1usions'are inescapable. The Dow reach-ed its \j-ull-market p-eak but this peak had been achieved four years earlier by the Gils. These issues, moreover, probably completed their bear-market cycle in 1960 while the Industrials, in all probability, have two further phases to complete. I J, I i I' I,''I, Such action strongly indicates that the oils are likely to outperform the general market over the next few years. Other groups, including Aerospace, Coal, Natural 'I ;as ipelines and Textile have similar patterns and, in these industries, many stocks which are attractive candidates for purchase on weakness will be found. ether groups such as Copper, lViachine Tools, and Containers, although the patterns are not strictly similar, also appear interesting. ilAd, and lHlder3&Wircul;ances IS to be construed as. an ffer to sell or a 50hCltation to .,formation nol K6aranteed as or and the furnlehmR' thereof IS not, o.nd under coAstl!uliJ!Ji.1i).RIJopresento.- All cxbQSiilO11J f!f opinIon are euhJcct to change ,,!Ithout notice '\Yaiston & ChrUlCI' sw.qtpq1ders and sell o.n interest m the securitIes mentIOned herem ThiS market general. on day to day market news amJ not as a complete Additional mformatlOn With respect to any eecurltu!s rcferrc to herein furmshed upon request.

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Tabell’s Market Letter – July 20, 1962

Tabell’s Market Letter – July 20, 1962

Tabell's Market Letter - July 20, 1962
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Walston &- Co. flLtcOPy Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 20, 1962 At the week's intra-day low of 568.02, the Dow-Jones Industrials had lost a little over 400/0 of the advance from the June low of 524. 55 to the recent high of 599.02. 'ur breadth index has shown better action during the past several weeks than any time since early 1961. During the past week it has backed down moderately from its high. Ability of the breadth index to reach a new high above last week would indicate a further rally in the Dow-Jones Industrials to the 620-650 level. By every tenet of what has, over the past few years, passed as security analysis there is no reason to purchase .textile stocks. Industrygrowth has, since \!\forld 'lIar II, been negligible;. with production during the 1950is rising at an annual rate of around 20/0 vs. a rise of 30/0 for GNP. Earnings growth for major companies in the fielc has been nonexistent, and, in most cases, 1961 earnings figures were at a mid-point between 1949-51 highs and 1954-55 lows. rofit margins for the textile group have been among the lowest for any major industry over the past decade. All of this has been re- flected in the performance of the stocks. At the moment, Standard & Door's index of seven textile weavers is selling considerably under its 1951 high. Yet despite the myriad of surface reasons that can be advanced for ignoring the .textile industry completely, the group has, since the latter part of 1960, acted consider- ably better than the general market. The group is one of the few mentioned last week that has managed to hold above its 1960 lows on the recent break, and many stocks in the industry, such as American Viscose, Beaunit \/fills, Burlington Industries, Collins & Aikman, Reeves Brothers and J. J. Stevens are on our recommended list. In almost every case throughout the industry, technical patterns appear to indicate substantially higher levels over the long term. Since this is the case, at the industry, in- volving something more than a mere measurementtear i g is indicated. The overall lack of sales growth in the ar so can be explained very the .most of his in- . creased diSposable-iticomeon hardiOdS a a iance ther than on clothing and other textile-using items. It is extremel .rend will continue at the same pace, and it is logical to more closely to approximate growth in disposable income thJ;l-n ha II the past. The other n n industry's record is the wide swings in proft margins and ear.;\. en place. These are normally thought to be the' product of a enomenon called the textile cycle. Actually, a close look at the figures prbv at sales fluctuations in textiles are extremely moderate and that textile producti ends to decrease less in recessions than does industrial product- ion. 1f.'hat has varied widely over the past few years is textile prices, and, in an industr already operating on a low profit margin, price cutting can be close to disastrous. The reasons for price cutting must, in turn, be examined. Textiles, more than any other industry, have been plagued with over-capacity — much of this over-capacity obsolete and high-cost, but there is some evidence that this situation has mitigated of late. Industry estimates place excess facilities at 150/0 in mid-1961, down from 300/0 as late as 1956. It is also an undeniable fact that concentration of output in the hands of major producers has increased markedly in recent years, especially in the stronger and more profitable items, thus giving the industry a greater measure of price control than it has had heretofore. – But, despite the progress that has been made, current prices mark most stocks at around or less than ten times expected 1962 earnings, just as if they were still sub- ject to the cyclical vagaries which were their lot in the decade of the 1950's. Yields, in most cases, are generous and book values in many companies exceed the market prices of the common eqdty. That textiles have become a rapid-growth industry, or that they are now recession-proof, is not to be claimed. It can, however, be argued that present prices hardly reflect recognition of the improvements that have taken place and that re- presentative textile stocks deserve a place in the long-term investor's portfolio. Dow -Jones Ind. 577. 18 Dow-Jones Rails 123.05 ANTEONY W. TABELL WALSTON & CO. INC. market letter is not, and under no circumstances IS to be as, nn ficr to sell or a solICitation to buy any secUritIes referred to herem The mCormatton contamoo herem is not as to accuracy or completeness and the (urmshml thereof not, and under no circumstances IS to be construed as, a representn.- twn by Walston & Co , Inc All expressions of oplOwn are subcct to change Without notIce. Wnlston & Co., Inc., and Officers, Directors, Stockholders and thereof, purchase, sell and may have an mterest 10 the secUritieS ment.lOned herein ThiS letter IS Intended and pr,csented merely as a gencrnl, Informal commentary on dny to day market news Ind not ns a complete analYllIR AdditIOnal InformntlOn With respect to any securities rderred to herem Will be furnished upon r e q u C I I L ' WI\' 30) –

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Tabell’s Market Letter – July 27, 1962

Tabell’s Market Letter – July 27, 1962

Tabell's Market Letter - July 27, 1962
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r — –;;iiO..—–…..—.- … Walston &Co . lnc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CKiCAGO OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 27, 1962 Since May 27th, the Dow-Jones Industrial average has fluctuated in a hundred- point area between 625 and 525. Actually, most of the time has been spent in a much nar rower range. For the past forty-three trading days, including May 27th, the average has sold below 550 during only five trading days and above 600 during only ten trading days. For the remaining twenty-eight trading days, or almost two-thirds of the time, the intra- day range has been between 550 and 600. During this two-month period, the averages and a sizable number of individual issues have, from a technical viewpoint, formed fairly substantial potential base patterns. The Dow-Jones Industrials, 'for example, have built a possible base centering around the 570-575 area with'a possible'upside potential-of- 620 to 650.1'Technically, such an objective would be signalled by the 'ability of the aver- age to reach 600. The early July intra-day high was 599.02. Such an objective would also be signalled by the ability of the breadth index to better its early July high. Our various breadth have shown definitely improving June. While no positive signals of a action of an In';!''' LUIUll to the averages. For example, if the average declined 10/0 and an individual stock de- clined only 50/0, that stock is showing above-average action or good relative strength des- pite the fact that it has declined. Conversely, if the average advanced 100/0, and an indi- vidual stock advanced only 50/0, the relative strength of the individual stock is poorlAno- ther, and simpler, approach is to select the stocks or that have held above a previous low despite the fact that the territory., For the Dow-Jones Industrial average ,1960, and then advanced to 741. 30 in November of 19 1. broken below the 1960 low to reach 524. 55. The hlyeJleI,d,aboye their i9601ows have, therefore, action and their relative strength is good despite the fact in price. There is that these issues aretrmenedetoinrg b ages. Some of the m(ll'jiVfinportarlt category are listed MjlhclbeLle'HJ.Y Aerospace Automobile Auto Trucks Banks-Outside N. Y. Beverage -Distillers Beverage- Soft Drinks Coal Containers-Metal & Glass Fertilizers Finance Companies Fire Insurance Food Gold Mining Machine Tools Machinery-Construction Machinery-Oil Well Machinery-Steam Generating Mining and Smelting Natural Gas Office Equipment Oil Railroad Equipment Rayon Retail Stores Shipbuilding Shipping Soaps Textiles Tobaccos -Utilities The oils have shown particularly good technical action.This group average reach- ed its high in June, 1957 and compl eted a three-wave downtrend three years later in 1960. Since that time the group average has been in a slow uptrend. It has not only held above the 1960 low but also above its October, 1961 low. Among the oils and associated companies in our recommended ,list are Gulf Oil (35), Kern County Land (70), Louisiana Land (65), J. Ray McDermott (23), Murphy Corp. (16), Phillips Petroleum '(46) and Royal Dutch (38). EDMUND W. TABELL Dow-Jones Ind. 585.00 WALSTON & CO. INC. Dow-Jones Rails 121. 83 Thie market letter is not. and under no CIrcumstances is to be COtlBtrued as, an ofter to sell or a solicitation to buy any securttie!l referred to herein. The Information contained herein is not guaranteed as to accuracy or completeness and the furnishmg thereof 18 not, and under no cireumstances is to be construed as, a representa- tion by Walston & Co, Inc. AU of opimon are subject to ehange without notiee. Walston & Co., Ine, and Offieel'8, Dlreetol'8, Stoekbolders and Employees thereof, purebnse, sell and may have an mterest In the securities mentioned herein This market letter is mtended and presented merely as a general, informal eommentary on day to day market news an4 not as a eomplete analysts Additional Information with regpeet to any securities referred to berein will be furnished uJ))n request. WN 301 tl

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