Viewing Month: September 1965

Tabell’s Market Letter – September 07, 1965

Tabell’s Market Letter – September 07, 1965

Tabell's Market Letter - September 07, 1965
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'''alston &- Co. INVESTMENT BANKE'S ,y,UTU;.l fUNDS UNICIPAl 80NDS Members New York Stock Exchange and Other Prtncipal Stock and CommodIty Exchanges COAST TO COAST ANO OVEIl.SEAS TABELl'S MARKET lETTER September 7, 1865 Last week's market action was impressive. In the early part of the \I'eek, despite \\'eak- ness in the Averages, advances outnumbered declll1es indicating underlying market strength, and, on Thursday and Friday, this strength \I'as reflected in decish'e strength in the .-\ver- ages on impressive volume. Despite the fact that at Friday's high of 910.28 the Dow-Jones Industrials were close to our shorter term upsIde obecthe of 910- 915, further strength in the market leaders is possible..b.eor.e.the decline tops out. In our opinion AMERICAN-TELEPHONE & TELEGRAPH COMP.-\NY ( 67) represents an interesting purchase at present price levels . .-\t first glance, this \\'ould appear to be a arather dull selection. There is no doubt in most people's minds that .-\merican Telephone is prime investment issue, but the genera'l -thought is that it is an stock with a minimum opportunity for capital appreciation. Certainly, American Telephone is not to be regarded as a trading vehicle, but as an investment holding for long term capital appre ciation, it has outperformed both the market and the economy. It is being added to our rec- ommended list. Since 1947-1949, revenues of American Telephone & Telegraph have increased 299, while gross national product has increased 148. Revenues have grown in every yea r since 1932. Population growth, technological progress and a rising standard of living are favorable factors in the long term outlook. I As far as market performance is concerned, Telephone reached a high of 31 in 1955 I after adjusting for stock splits in 1959 and 1964. At present price levels around 67, the stock I Ihas shown a price appreciation of 116 over the past ten cirAverage reached a high of 490 in 1955, and at the present 1 e Industrial 8 5,Ohas advanced 83 in the past ten years. C\, II In the past ten years, American Telephone & s have more than from 4.7 billion in 1954 to 10.3 billion in share for the same period ; tdid not show a comparable rise. 1954 earnin er a' ing for the two stock splits, were -comparoe4-tG-3.-24..fur-thef-1im, 1'.6 … 9 ,- or a r-ise-of-onl.y.4320/0, -This-has beel.,.L largely due to the dilution b \ock'1'eringsduringthepastdecade.Rightsto stockholders to buy additional m bonds were issued in 1955.1956, 1958, 1961 and 1964. If t exercised and the stock purchased, the capital ap- preciation would Indications are that pc n e over the ten-year period than that mentioned above. y not have to resort to as much equity financing in the future as in the past be aus the heavy flow of internally generated funds. This would re- duce the amount of dilu' and indicate a more rapid rate of earnings increase. The increase in long distance calls has more than offset the rate reductions that went into effect on February 1st. Estimated earnings for the fiscal year ending November 30th are 3.35 a share. At present levels of 67, the stock is selling at twenty times estimated earnings for 1965. Since 1964, the PiE ratio has ranged between 20 and 24 times earnings, so the stock is now selling in the lower part of the range. The present PiE ratio is considerably higher than that which existed before the late 1950's when the new dividend policy was initiated after 30 years of stability. Dividends have been increased by small amounts several times since 1959 when the first increase occurred from the 1. 50 dividend paid for a thirty -year period. At the present 2.00 annual dividend, the yield is roughly 3 at 67. There is no indication of an increase in the dividend in the im- mediate future, but the anticipated long term growth-inearnings spould result in an eventual higher payout. From a technical viewpoint, the stock appears to be forming an accumulation base.After reaching a high of 75 in July, 1964 on the news of the stock split, Telephone has held in a narrow trading area since September ayear ago. The high of this eleven-month range has been 70 1/2 and the low has been 65 3/8. The stock, at present levels of 67, is below the 1961 high of 68 1/4. Ability to break out of the recent trading area on the upside would indicate a move to a higher pnc't pIateau. Most of the issues in our recommended list are showing above-average action. In addition to the 19 issues listed last week, four more issues in the list reached new high territory for the year. They are American Bosch, Automatic Canteen, First Charter Financial and Great Western Financial. A new compi ete recommended list will be available this week from your Account Executive. EDMUND W. TABELL Dow-Jones Ind. 907. 97 WALSTON & CO. INC. Dow-Jones Rails 217.75 Thill market lettef IS Jlubllshed for Our COnH'nll!llCe nn,' Information find 1'1 not lin ofTl'1 (olmnhon WllS oiJtnln(!d from we I,d,e\(' to be rell!!,le but \I.e do 1I0t eml'lloet!s rna)' hU\'e an Interest In or purchase and sell the rt'felr(-',\ to het'III, to or It ;OhCltRtion to buy Any 8e('Uf.tU'l'! dlS('us'Iffi The )1\. Its HN'UI,lr\ ,\;. Co Jill' flll,l ,1Ln', 01 \\ N301

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Tabell’s Market Letter – September 13, 1965

Tabell’s Market Letter – September 13, 1965

Tabell's Market Letter - September 13, 1965
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Walston &Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND QVERSAS TABEll'S MARKET lETTER September 13, 1965 The market strength continues. At last week's intra-day high of 924.00, the Dow- Jones Industrial Average had recovered some 80 of the precipitous drop which began in mid-May and lasted until the end of June. The new highs reported daily confirm the fact that many stocks have, indeed, been outperforming the Averages. All this has, no doubt, confounded those who were proclaiming the immediacy of a bear market when the Averages made their June lows. It is now nec'essary to guard against making the exact opposite error. As strength continues, and the May-June unpleasantness recedes further into the mists of memory, there will undoubtedly be forecasts assuring a rosy future and an immediate substan.tial rise. Such predictions are likely to turn out as disastrously as those of the Cassandras who prophesied gloom and doom around the June low In this connection, it is worthwhile to quote the July 6th issue of this letter. At that time we said The uptrend channel from the October, 1962 low has ended and will be replace by a broad trading arESa.' with wide price swings both up and down. During this period the action of individual sto'&ks will be far more important than swings in the market averages. With the Average now some 10 higher, we see no reason to change this basic opinion. The recent announcement of the proposed merger between the Norfolk & Western and Chesapeake & Ohio Railroads was one of those rare major developments which took the fi- nancial community completely by surprise. Overnight, it became necessary to revise one's thinking almost entirely as to the ultimate future of Eastern railroading since, if the merger is eventually consummated, the East will be dominated by two major railroad systems in- stead of three as had heretofore been supposed. With e p i i 'the proposed merger terms were fairly well in line with the market appraisal 0 h lYing securities. The exception was, of course, the valuation based by C & 0 vs. the N & W. Chesapeake & Ohio common d Directors on the ' sharp runup, but has since settled back and is now selling for e value of Norfolk & Weste despite the fact that the merger calls for of C & O. Thus, if the merger wer,e & &;N W's market value, each C of. 5 N & W shares for each share iately, and there were no ,change in receive over 90 in Norfolk stock. The fact that the course, testimony to the fact that the mer- ger will not take all of the complex's c In ct, years of hearing and discussion remain before e ed. Nonetheless, the merger is interesting, to say the least. It would crea 0 e llroad complex with 26,000 miles of road, gross revenue close to 2 billion, an a n come (based on 1964 figures) of around 130 million. This would work out to appr a tely 8. 50 per share of new stock. According to the railroad,s' own estimate, 50 mi ion of merger savings would be involved (more than 3.00 per share). It is, of course, impossible to say at this point what additional revenues might accrue to the combined roads through changes in the traffic patterns. One of the most significant things about the proposal includes a plan for absorption of the Delaware & Hudson through merger and of four problem roads through a complex holding company setup. This last is contin- gent on a number of conditions, including changes in the tax laws allowing the merged system to utilize the weaker roads' tax loss carry-forwards, and upon solution of commuter prob- le'ms. It is significant that the N & W-C & 0 proposal is the first concrete one for the ulti- mate absorption of the deficit-ridden commuter roads ardently desired by regulatory au- thorities. N & W has, of course,-been-in'our recormnended list for some time and in the light of proposals, it seems worthwhile to re-examine our thinking toward C & O. The 4.00 divi dend on the latter has been paid for eight years and provides a 5.6 yield at current prices, Accordingly, downside risk appears limited. The road stands to benefit from the ultimate merger with its affiliates Baltimore & Ohio and Western Maryland and, as noted above, the work-out value for the proposed N & W merger is considerably higher. N & W is a better quality road by most standards, and those investors concerned primarily with this aspect can retain it. For those more concerned with long range capital gains, however, we are dropping N & W from our recommended list and adding C & O. Dow-Jones Ind. 918. 95 Dow-Jones Rails 216.21 ANTHONY W. TABELL WALSTON & CO. INC. ThlR market letter iR Ilubhshed for )our t'onvenLeJ1ce and mformatlon and 1! nf')t .m offer to sell or a solicitation to buy any discussed The In. formntwn was obtmned from sources we bdlt''.c to l.t- reltnble. but we do not guarantee Its \\'nl'lton & Co. Inc find Its offkets. dlf.'('tors or cmloyee'l may have an mterest In or purchase and sell the o;tcuntlpt; to WN301

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Tabell’s Market Letter – September 20, 1965

Tabell’s Market Letter – September 20, 1965

Tabell's Market Letter - September 20, 1965
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TABEll'S MARKET Walston &Co. —–Inc —-INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS lETTER September 20, 1965 EDMUND W. TABELL, author of this letter for the past twenty-one years, died last Tuesday in Nashville, Tennessee. The grief felt by his family and friends cannot be lightened, but it is made easier to bear by the knowledge – – … – – – …… that many of those who knew him through this letter will share it with them. ANTHONY W. TABELL WALSTON & CO. INC. ThiS market letter IS pubhshed for )'our convenience and mforrnfttion and ill not Rn offer to sell or 1\ soIldtAtion to buy any Ile(!Urltles discussed The 10formation was obtamed (rom sources we believe to be reliable. hut we do not KURrRntee Its accuracy Walston & Co. Inc and Its officers. dlreetors or employees may have an mtereBt In or purchase and sell the securltle'l referred to herem.

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Tabell’s Market Letter – September 27, 1965

Tabell’s Market Letter – September 27, 1965

Tabell's Market Letter - September 27, 1965
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Walston &- Co. Inc INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER September 27,1965 Last week's market was characterized bya maximum amount of activity and a minimu amount of progress. Volume increased steadily for the first four days of the week, reaching the staggering total of just under 10 million shares on Thursday. For all of this, however, changes were very small, and despite strength late Friday, the Dow-Jones Industrial Average closed almos unchanged on the week. The closing high of 931. 62 posted on Wednesday was just about at the 930 level mentioned by this letter as an upside objective for the Dow. The Dow has now, over a period of fifteen weeks, twice traversed a range of over 100 points. Such action is entirely consistent with the view of the market pattern expressed by since the part of repeating at this tim the salient features of this view are as follows (1) The market in May of this year end ed the uptrend phase which had begun in October 1963, and entered into a new stage of the cycle. (2) This stage will be characterized by wide swings both up and down over a fairly broad range. Two such swings have just been observed during the past four months. (3) During this period the action of individual stocks will be viciously selective, with some stocks consistently moving higher throughout the period and other stocks doing very little or even moving downward. (4) Investment policy, therefore, should center on utilizing periods of strength to eliminate those issues unlikely to outperform the market, and utilizing down- swings to purchase those issues which are showing above-average market strength. (5) This entire phase will be a prelude to a major advance to new high levels to take place in the latte half of the 1960 'so As noted above, what has happened so far has been with this view. This opinion enabled us, in late June, to suggest that the 850-8 Ie tlie Dow WDuld be a buy ing range and, likewise, caused us to suggest two was h tan ess of optimism as the market reached new highs would not be warrante l1t(is our inued feeling that periods of strength should be used to develop a cash ve is 'ng of those issues which tech- nical and fundamental analYSis indicate mi h ow- rage market performers. Al.L.this-is–I1ot nt- thnt-another-a-ttempt to move to or through the old . hs 1 i'itl.de. With the averages and a good many stocks having reached their owW, some consolidation will be needed before the short term directi n f i ! be predicted. It is often in e . g w on history as an indication of the sort of market that may be expected. Til e e compares the relative action of the Dow and tW! stocks, Merck and Chrysler, b tw ate 1955 and 1958. DJIA Close Merck Chrysler Nov. 1955 – High 487.38 25 378 101 172 Jan. 1956 – Low 462.35 25 74 5/8 Apr. 1956 – High 521. 05 29 1/4 77 1/8 Jun. 1956 – Low 475.29 30 1/8 60 Aug. 1956 – High 520. 95 34 5/8 71 Nov. 1956 – Low 466.10 28 3/4 65 7/8 Jul. 1957 – High 520.77 42 1/4 82 114 Oct. 1957 – Low 419.79 36 1/8 64 1958 Range 573.17 – 436.89 83318 – 363/4 59 118 – 44 As can seen, during tl!e several wide swings back and forth before starting a new major upmove in 1958. Both Merck and Chrysler described sim- ilar swings but Merck, outperforming the market, tended to show consistently higher peaks and bottoms and Chrysler never, during the period, attained the high that it made in Novem- ber of 1955. Obviously, the buyer of Merck on almost any period of market weakness did very well and probably still had a profit even at the depths of the October 1957 bottom. The same was hardly true of the purchaser of Chrysler. The most interesting fact, however, is that when the 1958 upswing began, Merck reached a high of 83 3/8 and Chrysler continued to move down to new lows. If, therefore, we are correct in assuming that coming action may be roughly similar to that outlined. ,above, the best protection against market vicissitudes will lie not in timing short those stocks which are likely to outperfor the market. ANTHONY W. TABELL Dow-Jones Ind. – 929.54 WALSTON & CO. INC. Dow-Jones Rails – 222.38 'J'h18 market letter 18 published for your convemence I\nd information and IS not I\n offer to sell or soIleltation to buy Rny seeuritle!l dlacussro. The inormRtlon was obtained from sources we hdieve to l,, reliable. but we do not guarantee its accuracy. Walston & Co., Inc and Its officers, dlredorll or enlClloyees may have an Interest In or purchase and the secuntle'l referred to herein. WNSOl

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