Viewing Month: January 1964

Tabell’s Market Letter – January 02, 1964

Tabell’s Market Letter – January 02, 1964

Tabell's Market Letter - January 02, 1964
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Walston &CO. 1 .'!! Inc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS EDMUND W. lABEll'S RECOMMENDED LlSl QUALITY & LONG TERM GROWTH Amerada Close Qual- 12L;nL63 .i1L !;omment 69 5/8 A Buy at 65-60 Gulf Oil Close Qual- 12/31/63 i!L Comment 47 A Buy at 43-40 Amer. Home Prod. 605/8 A Buy at 55 Minn. Mining 64 5/8 A Buy at 60-55 Caterpillar Tract. 48 A Buy at 45-43 Norfolk & W 118 A Buy at 110-100 Corning Glass 210 1/2 A Sell at 225 -250 Penney, JC 47 A Buy at 42-40 1- ..Du Pont 239 3/ General Electric 87 1/8 Dutch 49 1/8 A Buy at 45 A Buy at 80-75 Std. Oil N. J 76 A – Buy at 70-65'- Woolworth 73 3/4 A Buy at 75-70 . PRICE APPRECIATION Close Qual12/31/63 ity Comment Atchison, Top. Beaunit Corp. Borg Warner 28 3/4 29 1/8 46 3/4 A- Buy at 28-27 B Buy at 29-27 A- Buy at 45-43 Burlington Ind. Cenco Instrum. Clark Equipment 43 47 5/8 41 5/8 B Hold for 50 B Buy at 46-44 A- Buy at 40-35 Cluett, Peabody 54 3/4 B Buy at 50-45 Conso!. Coal Copper Range 53 5/8 26 5/8 A- Buy at 50-45 B Buy at 23-20 Copperweld Steel 38 3/4 B Buy at 37-35 – – Denver;-RipG. 21-1/-4–B–Buy-a-t-20 -1-8 Disney, Walt Eaton Mfg. Ex-Cell-O First Charter F 39 1/2 37 1/ 8 37 1/4 38 1/2 B Buy at 36-34 B Buy at 32-30 A Buy at 38-35 – Buy at 35-30 Fruehauf Trailer 29 Illinois Central Intern'l Min. C 52 1/2 59 1/ 2 Kansas City So. Ind. 42 1/2 B Buy at 27-25 B Buy at 50-45 A- Buy at 55-50 A- Buy at 40-38 Kerr McGee Korvette 36 1/2 36 1/4 A- Buy at 34-32 B Buy at 33-30 Close Qual- 12/31/63 ity Comment Libbey-Owens 52 3/8 A Buy at 52-50 Litton Ind. 78 7/8 B Buy at 75-70 McDermott 23 3/8 B Buy at 23-20 Midland-Ross 63 B B'..lyat 60-55 Newmont Min 36 1/4 A- Buy at 32 Pittston Co 58 1/2 B Buy at 57-55 Pure Oil 41 1/2 A Buy at 40-38 Rayonier 29 1/2 B Buy at 27-25 Raytheon 20 3/8 – Buy at 20-19 Reynolds Met. 32 B Buy at 30-28 o'Schlumberger-5'7-1 / 4—A-Buy at 55 –50 Southern Rwy 62 B Buy at 60-55 Stevens, J. P. 38 3/4 B Buy at 35 Storer Broad. 40 3/4 B Buy at 33-30 Sundstrand 21 3/8 B Buy at 21-20 Swingline A 33 1/4 – Buy at 33-30 Union Bag C 38 5/8 B Buy at 35-33 United Fruit 21 5/8 B Buy at 21-20 U. S. Plywood 67 A- Buy at 60-55 Univ. Oil Prod. 32 1/4 B Buy at 31-29 I – LOW-PRICED – SPECULATIVE Close 123163 Amer. Metal Pr. 18 Amer. Radiator 18 1/8 Audio Devices 11 3/4 Braniff Airways 12 7/8 Campbell Chib. 3 1/4 El Paso Nat! Gas 18 3/4 Foote Mineral 11 1/2 Great West. Fin 17 5/8 Hewlett Packard 19 1/8 Intern'l Packers 15 5/8 Qual- Close Qual- ….liY- Comment B Buy at 17-15 Mesabi 12/31/63 Trust 13 1/8 !!L- B !3uyat 17-15 Microwave 10 7/8 B B Buy at 11-9 Murphy Corp 18 B B Buy at 13-12 National Can 15 B- C Spect.ilatim-Buy . Pacific Pete 10 3/4 B- B Buy at 18-16 Penn R R. 25 5/8 B- B Buy at 11-10 Reeves Bros. 16.3/8 B – Buy at 16-15 Seaboard W. Air. 4 '7/ 8 C B Buy at 20-18 Sperry Rand 21 1/4 B B- Hold Univ. Match 13 1/2 B Varian Assoc. 16 5/8 B Comment Hold / Income Buy at 10-8 Hold for — – Buy at 14-13 Buy at 11-10 Buy at 22-20 Buy at 15-14 Buy at 5-41/2 Buy at 20-18 Buy at 14-12 Buy at 17-15 January 2, 1964 This Bullctm IS not, and un,('f no fllCllmstan('E'; IS to 1,(, n… an frel to se!1 III ,\ ,lntHln to Luy any securities refcried to herein The mformntlOn can tamed her('m 15 not J-unrnnlccd Il'l tn neCtllaCY 0, eomplehtlC'-, aut! the (Ul thelCl/f ' Ilot. ,mrl under no ClrCUm!)tances IS to be construed n'l. n reprcs,entatlon by \ …I1\gton &. Co , Inc All C'lpreswns uf ornnlOn 1'1 e ..ulJJcct to Ch.lngc Wllhuut uutlCC \\ ,11910n &. en. Inc , OffIcers. Drector. Swckholden; and Employees thereof. purchase, sell nnd mny ha.. c an mleresl In the 'Iecurttle'l mentlwH'd hereIn ilul\clln IS mtf'ndcd and presented merely as a general, Informal Commen- tary and not as a complete 1I11ubsis AddItional Infurmllhon respect to any Icrcrred to herem WIll be fUlnlshed upon request WN-5I16

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Tabell’s Market Letter – January 03, 1964

Tabell’s Market Letter – January 03, 1964

Tabell's Market Letter - January 03, 1964
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Walston &- Co. – Inc – – – – – JIl'mh('J'..; .\'('11' rod) Stork E.l'riW'IlPl' NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO CO'ST AND QV!;RSEAS TABELL'S MARKET LETTER January 3, 1964 .. Relieffromtl1e-pressure!of tax-loss selling in depressed issues and the failure of the anticipated 1964 profit-taking to appear, resulted in a sharply higher market during the past week. Friday's intra-day high on the Dow-Jones Industrials was 771. 73 as compared to the mid-December high of 773.07. As we noted in our letter of December 13th, the wide fluctuations in November built up a new technical pattern that enlarged both the potential up- side and downside obJectives. The upside potential, from a technical viewpoint, is indicated as'a possible 775-795 on the Industrials, and 185-190 on the Rail average Both of these potentials are not much above present levels . . .on poi,nt to wa tch is the .Dec.ember low. The actual low was 746.-78 made On the first day of the month. As noted in our December 20th letter, the stock market in every year since 1897 has had some sort of a year -end rally. In some cases the rise has been substantial and has lasted for as long as six months. On other occasions, the year-end rally has been of only a few day's duration. The clue has, in the past, been the ability of the market to hold above the December low for the first three months of the new year. If the December low holds for the flrst 2 1/2 months of the year, the trend has, in the majority of cases, been upward for the rest of the year. If the December low is broken early in the year, the trend has usually been downward for the rest of the year. The reasoning be- hind this theory is that the market is subject to maximum downside pressure at the peak of tax-loss selling. If the pressure becomes greater after tax-loss selling has ended,new down ward tendencies are in force and the December low will be broken. Due to the unfortunate happenings of November, it is possible that some has occurred. It is problematical whether the actual low of 746.78 reached 0 t Y of December is the point to watch. The peak of tax-loss selling was ch n December 23rd when the Industrials reached a low of 752.82. Actua is is ably not important. If the December 23rd low is broken, the e g of the 746.78 low also. The case be 720 . possible decline to !he .695 -685 The breadth index over the past week,but it is still quite a distance below the u highs as contrasted to new highs in the In- dustrial average. Thu t ve nce in effect since late October still persists. Con trary to general 0 le breadth signal does not indicate an immediate de- cline in the market. s nal oss of momentum ,but the averages can continue higher for quite some time as the 1961. It suggests,however, that holdings should be lightened on strength. While breadth action continues unfavorable, there is no indication of a major decline like 1962. The background conditions are q.ite different. We have continually stressed the point that the market, in our opinion, is in a major reaccumulation period that probably need more time to complete. From a technical viewpoint, the most constructive action at this point would be a decline that would enlarge the potential base patterns already formed. Breadth action turned unfavorable in both 1959 and 1961 and indicated the 1960 and 1962 declines. The present pattern is much more similar to 1959 than 1961. If you recall the 1960 market,you will remember it was a two-way market. The Industrial average declined from an early high of 688 to an October low of 565. By the end of the year, the market was again moving sharply higher and closed around the 615 level. Many stocks declined during the year, but many bucked the trend and moved higher. Beckman, Brunswick, International Business Machines,Litton and Texas Instruments,and a sizable number of additional issues moved against the trend. Leadership would, of course, be quite different in 1964, but similar price action could occur in individual issues. A new edition of our recommended list has been published and is now in the hands of your Account Executive.All of the issues mentioned have been recommended in the past and continued holding is advised. Buying levels,which are mostly below the present market, are noted. These are not trading recommendations, but are suggested for holding over the next six months or longer for si2able percentage appreciation. It is our thought that accounts con- cerned.mainly with. capital appreciation over the longer term should be 25 liq.id at the mo- ment in order'to-await-buying opportunities. D -J BIniis7 67 d 68 B B1 EDMUND W. TABELL WALSTON & C.o.INC. Thh !1l.1rket Jettel not, tnt! untlel no CII cum..,lnnce-. to Ite \Icli ,\… nn lfel til …ell Ul Il ..htll.lt 111 tl hlt) nn)' ,CCIII !tH… I ('f('ll 'II tll hCll'ln 1 he mC1 1\1,11 In (I)nl,nne.1 here,n 1b l1t \.uarl1nt(,l'd ,I 10 IH.CI11IHY u, 'ulllllelcnc…. ,11l1 the th'l'F I nut, ',nl Ittl,It nn llllllmlul1('' ,' ,,, I.e .un-.tllletl U, ,I ('I'('-.cnlll- \ hy '\'nl'ton & Co In(' All llF IHllI1J1l n1 e h I('t tll dl'I1\.(, 1IIIIw1It 11,,111 e, \\',tltun k en In(' und Oftl('CI, nl1 c. to Slot h.hIt!t,! … ,\1101 o,ml,uvee.. thereor, 1111 ('hn'-c, bell nnd may hn\c nn mtelc..t In the eemitle mel1l1ncol he!em II .. 111,11\,('1 lette I… mten,le,\ Hu,l ,,!Clllted melcly , II InFormu1 cummentmy .. n (Y to d)y m,lrket n'Wb ,lIld not lib n e01111lete ,\.1,\Jdn,tl Illf,mlltl' \lllh !eI'l'l III .Ill) -.e(,lllltH.' leCtlle.\ lu helCIII II ill h., rUI upon I Cfu'bl \\ ,UI

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Tabell’s Market Letter – January 10, 1964

Tabell’s Market Letter – January 10, 1964

Tabell's Market Letter - January 10, 1964
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Walston &Co. Inc – – – – – Member.. XCII rk Stock Euhan(fe NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 10, 1964 At the weekJ,s.intlla-daY-high'of-7S0. 59, the Dow-Jones Industrial average reached the lower range of the 775 -795 upside potential. The breadth index moved ahead also, but still remains below the June and September highs despite new highs in the averages. Continue to advise taking profits On strength in order to build up cash reserves for later purchases. Vul nerable stocks should be switched into better quality defensive issues such as the issues mentioned below. Despite the strength in the averages, there are ma ny groups that are selling much nearer their lows of the past several years than their highs. One such group is the tobaccos. This letter is written before the issuance of the report of the United States Public Health Advisory Commlttee on is ';m not present- any thing particularly new. It will be the Committee's evaluation of the many medical reports on smoking that have been published in past years. It is presumed that the report will be de- cidedly unfavorable as far as cigarette smoking is concerned and it is understood that a sec- ond report will follow at a later date giving what precautions should be taken to protect the public health. These might possibly include restrictions On advertising and stricter labeling requirements. There is also the threat of liability suits from cancer victims Health scares are not new in the cigarette industry. The first such scare was in 1954 Per capita consumption of clgarettes dropped sharply as a result, but the recovery was rapid largely due to the growth in popularity of the filter-type cigarette and the great increase in women smokers. In the period between 1955 and 1962, the five leading companies increased volume by 47. Whether a possible drop in consumption steep a recovery is, of course, problematical. The price sWlngs in the group have been Prices are adjusted for stock splits during the periocf\ vA 1954 61 ';J Low . '0Y v.Bll be followed by as inc 4, as noted below. 2 Low Close 1/10/64 1-/ 2- –1-… Lorillard 0 8 723/S 393/S 74 1/4 451/4 Philip Morris Reynolds Tobacco CY 4 125 S 3/S S91/4 611/S 341/2 75 42 1/2 As can be see rom table above, th; price decline from the 1961 high has been quite drastic. However spite the decline in price, earnings have been steady and yields are above average. American Tobacco Liggett & Myers Lorillard Philip Morris Reynolds Tobacco S&P Rating B B AA A Close 1/10/64 2S 1/2 74 1/4 45 1/4 75 42 1/2 1961 -E2a.-r4n0 6.47 4 22 5. 61 2 91 Last 12 mos. Earnings 2.39 6.07 4. 20 6.00 3 10 PiE Ratio 12 12 11 13 14 Dividend 1 50 5. 00 2.50 3. 60 1. SO Yield 5. 3 6. 7 5. 6 4S 4.2 At present price levels, the tobacco issues have, in our opinion, probably discounted most of the adverse publicity of the U. S. Health report. If they should sell off sharply, they would present an interesting long term speculation. The quality issue in the group is Reynold Tobacco. Smokers are expected toturn increasingly from regular brands to filter and mentholated brands, and Reynolds has the top ranking filter (Winston), the top ranking mentholated filter (Salem), in addition to Camel, the top ranking regular cigarette. 1963 should be a record year in sales and earnings. Further diversification into other lines of consumer goods is probable. In 1963, Hawaiian Products, a producer of fruit drinks, was acquired The technical pattern of the stock appears favorable. The downside objective of the 1961 top of 36 has been reached and the stock has built up a sizable potential base in the 35-47 area. Reynolds is being added to our recommended list if available in the 43-40 area. American Tobacco also appears to offer above-average attraction. Dow-Jones Ind, 77433 Dow-Jones Rails lS0.15 EDMUND W. TABELL WALSTON & CO. INC. , hll\ lYIurk!!t letter IS not. and under no cirCllmstnnc(; IS to be ('on..tl tied nil, nn Uff('l t UI n sohcltatln tn flny I efcil cd lo hel em The )nfm mntmn ()ntnmcd herein h. not )!uarantcerJ as tl) nCC1111\CY or coml,letene,s and the CUI nlshlll). the! ('uf nut. nni! unlit'! 111 ('11 \ to be CUlltlllOO n.. , n 1cprc,,('ntn. tIm) Wnlston & Co Inc All c,preSSlOns uf oPIniOn are lubJect to chnnJ,!e \\'Ithmtl notIce, Wnl.,\on & Cu lilt', n)Hl Stoc1..huldels nn,\ Emlllovees thereof. !lUI sell nnd mny hlnc an mtetest in the menlwn('d het ('111 Thl!. market Jettel 1-. intended lind III e,ented mer…ly Ih n I('n(') nl. mformal commentm' on ria to ,lay mark('t ncW nnd nol as a complete AddLtlnaJ 1I1fOl mahon \\ lth le11ed to Imy CCII\ Ill('\, I efl'r! to helem ' 111 he rUI t1J)on reQuest \\ ,\ lOl

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Tabell’s Market Letter – January 17, 1964

Tabell’s Market Letter – January 17, 1964

Tabell's Market Letter - January 17, 1964
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Walston &- Co. Inc IIII NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS 11 TABEll'S MARKET lETTER January 17, 1964 There was practically no change in the leading market averages over the past week, although wide moves in both directions were prevalent. With the Dow-Jones Industrials al- ready in the lower part of the 775-795 objective area suggested by this letter, it is expected that selectivity will increase. Investors should concentrate their attention on securities with a minimum downside risk and good, long term upside potentials such as the one described below. –Current Price . Current Dividend Current Y,eld .'- COPPERWELD STEEL COMPANY d – -42 The combination of -gooa inc6me;plus' .a.-.DOVE – 2 00 a verage capital gains potential, is rarely found 4.80/0 in today's stock market Yet just such a combi- Long Term Debt Common Stock 17,592,000 1,182,754 shs Sales – 1963-E 95,000,000 Earn Per Sh. 1963-E 3 25 nation appears to be available in the common stock of Copperweld Steel The company's current 50 quarterly divi- dend rate proVldes a y,eld of 4.8 at present prices At first glance, the coverage of the 2 0 Price Range, 1964-59 55-263/4 diVldend would appear to be questionable, considering the cyclical nature of the steel indus try What is not apparent on looking at the company's long term earnings record, however, is . that the the Superior Steel DlVision, sold ln 1961, sults for the years 1957-1961 heavily If losses of this div 0 which penalized re- ! the 2 00 ' dividend has been covered 111 every year but one seems to assure at least lts continuance n pre V; heavy cash flow The company's excellent capital from an anticipated increase in basic earning power. As a steel company, 0 rwe earnings wlll no doubt continue -toUuetua-te – a,(\b.y- – – ably higher Before Copperweld's basic business. h increases, let us outline briefly three major divisions. The first, the Aris- toloy Division, to sales, manufactures specialty steels Thirteen per cent of output 0 y er Copperweld diVisions 111 1962 Some 25 of sales are made by the ision WhlCh makes copper clad and aluminum clad rod, Wire and strand perweld and Alumoweld trade names Most of the company's remaining sales are a nted for by the Ohio Seamless Tube Division producing alloy and carbon seamless tubing Two developments in the Wlre and cable divislOn appear to offer promise for in- creasing earnings in the years ahead Strenuous cost-cutting efforts are being made in Copperweld wire production In addition, capacity for Alumoweld should be increased by 50 at the end of 1964 Due to changed economics in the public utility industry, the construc ion of power transmission lines is expanding at a significant rate. Alumoweld is expected to capture an ever increasing segment of this growing market. Moreover, increased production 111 the wire area will not only benefit that division, but also the Aristoloy division Slnce it will be supplying more products internally, thus d8mping cyclical fluctuations. Still more improvement lS scheduled for Aristoloy, however . .The start continuous casting in early 1965 with 300,000 tons of annual capacity. Since this lS less than half the company's total capacity, the equipment can probably be used on a full time basis, and thus maximum savings will be generated. It i difficult to estimate the precise earnings increase that can be expected from all of these improvements. However, a conservative estimate would indicate the possibility of 2.00 per share additional post-tax earnings at present operating rates Were the nationa steel operating rate to increase, earnings improvement could be substantially greater. At the moment the stock is selling at 13 times estimated 1963 earnings of 3. 25. From a technical point of view, the stock has formed a three-year base in the 28-42 area with a present upside obJective of 80,and there is support Just under current levels. I Dow-Jones Ind 7'15.69 Dow-Jones Rails 181. 87 ANTHONY W. TABELL WALSTON & CO. INC. '1111'1 !H!lll(cL lett..n I t. nnn undcl no CllClllllbt,UlC(,; 11 tn he cnllh 111'1111 .\11 Ifel In ell I 11 \11 intw!l tn hll ,Ill 'ccut !lIe I efell cd tn hClcm 1 he m(llIlntlllll OInLnlnc,\ hClcln nul ,.lIIlInntced ,I t UI ,rlIp\ctcfle ,Ind the 1II('I000or I' 1l0l1 nnd IIn,\el n IlLIIIII …lnIHL…. I t Ill' I Oll.,tl lIL'! II, ,I Il'I …..,I.'IIn- lIOIl I,v WnbtOIl & Cu, Inl' All C'ClHclnn., f 111111011 all' ,,hJc,t to Ih.lI1,.1' \\IOWllt nulwc \VlIl.,t,,1l & Co, 1111 ,lIIII OtfH('I….. HII'Lt,,, ,1111 lhcrrof. )Hllchn.,c, …ell ,Inri m.IY hnve 1111 IntClc… t In the CCllllhC'… Illcllt1'dle,1 hC11'11l 'lhl 1IIIuJ.,r 1'I\cl I Intelldc,\ !llIti plccnle,\ mer('iy n., II I ! l ' n l ' l . d / InflJrm,ll Lommcn1.lry Oil dllY to rlny market new., nnd nut LlJmplctc .\fl.1!,.1., Ad'\ltlII.t1 IIIfollllntl,I1 \\Ith I('–pe,t to .Iny C('Ulltll;''' ICrL led lu hCIClI1 hI' fllllll.,het! upun I eI\UCSt. — r \\ … \1'1 Ii'

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Tabell’s Market Letter – January 24, 1964

Tabell’s Market Letter – January 24, 1964

Tabell's Market Letter - January 24, 1964
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Wdlston &- CO. —';';;';'-tnc –…;.– ;l1elllleI'R Xell' rod, Stock E.rclwlIoe NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS CHICAGO TABELL'S MARKET LETTER January 24, 1964 With wide moves in both directions, the major market averages continued to inch into new high territory last The Dow-Jones Industrials reached an all-time intra day high of 787 65 on Friday, and pushed further into the 775-795 area suggested for some time by this letter as a possible upside target Most breadth indices also rose on the week, albeit quite mOderately. These indices, however, remain well below their previous 1963-64 highs The obvious fact that the averages somewhat distort the market picture has been pointed out by many analysts. All investors are aware that, despite the fact that the average are in newall-time high territory, 'the great majority of individual issues are still below their aUtime highs, which mayhave been made in 1956,1957, -1959-or 1961, depending-on the stock Only a relatively small minority of all stocks have moved into newall-time high territory this year. We have recently had occasion to examine and analyze the technical pattern of eac of the 1,800 stocks listed on the two major exchanges The pattern which seems to appear with the greatest frequency is one where a stock, at current levels, is just under the over- head supply from the original top which may have been made in anyone of the men- tioned above, The constant repetition of this pattern in stock after stock leads to the belief that the heavy supply in these issues will dampen any protracted rise from present levels at this time, Of course, the averages would not be 10 all-time high territory tOday if there were not quite a few issues that had outperformed the general market and were now selling at new peaks, In the majority of cases, there has been a real technical reason for these advances, and in some cases there is fundamental d te tification for be- lieving that they could move still higher over a wo pIes may be drawn from our recommended list, Beaunit Corp, was firs omme in February 1962 and has been mentioned by this letter on numerous casi si Its high of 32 3/8 on Friday represented a move above its 1955 peak Mi oss lch had been in new high territor for time, also posted a new 1 on ,'Clay, .. . Despite Beaunit's it of 17 7/8, the price does not seem to have disco un ted the important place in the company Synthetic fibers now account for about 5 , 's ing the company from the fluctuations in the vola- tile fabric field, F i 1, ver, lS aided by heavy representation in the growing. kni t and stretch rna T e pany is increasing lts capaclty, Polyester capacity will be upped from 12 million 030 million by mid-1964, and new modified rayon staple faci- lities are also being co ucted, Earnings for the fiscal year to end March, 1964 are ex- pected to increase to approxima tely 2 50 from 2,02 last year, and further increases appea probable for 1964-1965, There is support just under current levels in the 28-25 area, Formerly a manufacturer of auto frames (these represented 850/0 of total business in 1956), Midland-Ross has become a widely diversified industrial enterprise with represen- tation in the machinery, automotive, heating-air conditioning, aircraft, missile, tire cord, textile and building supply fields, Probably the company's most important step forward was acquisition of Industrial Rayon in April 1961, which broadened the equity base considerably and brought in cash items of some 22 million a'ld net working capital of over 40 million, This cash has been utilized in an aggressive acquisition program and, in 1962, the company purchased some of its own stock for use in future acquisitilns, Earnings development has been impressive, Per share results have increased from 2.32 in 1961 to an estimated 5.25 – 5,50 in 1963. The company announced Friday that it will consider calling its 5 1/20/0 preferred shares, It stated that had there been no preferred dividend requirements, nine months earnings would have been 4.22 vs, the 3,75 actually shown, so that future results should be benefited by the absence of these require- ments. Capitalization of current earnings, considering the prospect for future growth, is conservative, and the 3,00 dividend provides a 4, 30/0 yield There is good support in the 65 -60 area. Dow-Jones Ind. 783.04 Dow-Jones Rails 182.53 ANTHONY W. TABELL WALSTON & CO. INC. ThiS market letter jg not, and under nQ circumstances IS to be conqtrued n. an (.IiTel' tn 01 n luitcltntU1I1 to huy any CClII 1efCl1 ed tu hel,1n The InrO mntlnn contained herem is not j'unra nteed to nccuracy or completeness and the flll n !',hlllj.( thc. euf not. and undc. n(l Cll cum.,tun, c-. to LJe ued a', n rei ecnta. tlOn by Walston & Co, Inc All of oPInIOn ale to chnnl.(c wlthuut nntlrc. Wnh.t()n & Co. Inl., IIl1d Off'('CI … , Duectlb, Stockholder… an,1 Employees thereof, pUlchn'lc, scll nnd mny have an intert''1t 111 the securitIes men tinned he.cm fhl mnrh.el let tel IS Intende. find merely 11'1 fI ,,cnernl, Informal commcntary 011 day to dRY markct news and not liS a l'om)lete Atidltwnnl IIlrU'llIlltlim \\Ith le.pecl tu Ilny lerellC,1 to hClcm will LJe furmshed u,pon request ,,-. 3D1

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Tabell’s Market Letter – January 31, 1964

Tabell’s Market Letter – January 31, 1964

Tabell's Market Letter - January 31, 1964
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Walston &- Co. Inc Member.. ,Yell' Y01'k Siock Exchanaf NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO CO,ST NO OVERSEAS TABELL'S MARKET LETTER January 31, 1964 After edging to an all-time intra-day high of 791. 63 on Tuesday, the Dow-Jones In- dustrial average dropped off sharply at mid-week and mild rallies on Thursday and Friday failed to recover lost ground. More instructive, perhaps, were advance-decline figures which showed a plurality of declines on every day but Friday. One of the basic tenets of technical analysis is that stocks tend to follow the rep- eti tive price patterns or cycles. These cycles may not be equal as far as timing is con- cerned — indeed, they seldom are — but they do have certain distinguishing characteristics. Roughly, a typical stock cycle may be divided into eight phases as follows (ll A stock reach es the downside objective of a previous top. (2) A base begins to form (3) A base broadens out and ('1)1\n upSiae'oreakolJnakes pla.ce and atlaBvance objective of the base is reached. (6) A top begins to form. (7) The top broadens and com- pletes. (8) A downside breakout takes place, a decline begins and the cycle repeats itself. The job of the technician is to watch this cyclical process unfold in individual issues and to decide, with the tools at his disposal, what phase of the pattern each individual stock is in and what implications this has for the market as a whole The rise from the June, 1962 . low of 525 is now 19 months old During those 19 months various stocks have progressed through different stages of the cycle. Nineteen months ago most issues were around the start of the first phase At that time the stocks favored by this letter were those which had not made new lows in 1962 since, in effect, any work done after June 1962 simply enlarged existing bases. These stocks generally did out-perform the market in the early phases of the rise in late 1962 and early 1963. By the Spnng of 1963, a stpcks had already reached the fourth phase of the cycle. Their bases were co 1 ey began to move up sharply carrying most averages along with them. AtsJi ew' ny stocks had reached their upside objectives and it was possible to foresee f( sing market. Laggard stocks had, at least, reached their downside base forma tion process. e at various stages of the – – tel'. stocks,. a minority to be sure, were potentials Most, it was true, ap- peared to have higher potential n of the laggards had moved up out of their base forma tions and1 ng behind to take up the slack. Thus, at the end of ,August, our r has proved, so far, to be its high. Most r are familiar with the breadth index which has, lately, had good deal of popularitlt. are aware that the index is based on advances and declines land that a declining br'(/' index indicates that fewer and fewer 'stocks are advancing. Few- er investors are aware of why this is important. A declining breadth index simply reflects the fact that more and more stocks have completed the first half of the cycle mentioned above and are entering into the second half. This is precisely what has been takirrg place since last August. As we have watched the market for the past six months, the drama has contirrued to unfold. Irrdividual stocks have successively reached upside objectives. A. small minority of stocks completed their tops quite early arrd are rrow fairly close to dowrrside objectives and a new cycle. A greater number are in stages 5, 6 and 7 of the cycle although a substantial group, it must be noted, still appear to be further back along the road, either not having completed their upswing, or still forming bases for a later advance. All this means that the individual investor must scrutinize his' own portfolio ever more closely. As stocks reach upside objectives they should be replaced. New selections, moreover, should be chosen with arr eye to defensive value – – solid fundamentals, closeness to support, etc. Such an approach is not only the wisest for capital gains purposes, but also is the best one for protectirrg a portfolio agairrst arry market weakness which may ensue as the present cycle rna tures. Dow-Jones Ind. 785.43 Dow-Jones Rails 181. 39 ANTHONY W. TABELL WALSTON & CO. INC. Th mnrket letter is not, and under 110 clrcumstanC(fl 19 to be com.trued on olTer to hell or a suhcllntlnn til buy I\n)' ;eClintles I efel rell1.u hel em The infrmatlnn contained herem IS not Iruaranteed as to accuracy or completene;s anr! the fill n1hmJt thereof not, lind IInihl no CII to he \led a. 1\ rem Clentn- han by Wnlston & Co Inc All e'lpreSSlons of opinIOn are subject to chnnl.!;e \\Ithuut nutlce Wnllton &. Co.. Inc nn.\ Offlcel';, Dllcctms, Stoekhnldel'\ nnll Employees thereof, sell and may have an Interest m the securltle'\ mentu.ned heleln Thl mnrl..et letter IS intende. nnd Ilre..ented merely nl n I.!;enerlll, mformal commentary on dny to day market newl alld not fiB a complete nnnlYlll Athhtlflnal mfol mahan \\ Ith I('.)lect to any refelled to helt'ln III be furnished \.Won request, \\, JOI '-

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