Viewing Month: March 1966

Tabell’s Market Letter – March 04, 1966

Tabell’s Market Letter – March 04, 1966

Tabell's Market Letter - March 04, 1966
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TABELI,'S Walston &Co. Inc ….;;,…….;;,,,,;;- INVESlMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS MARKETLEIlER. March 4, 1966 Recent tradirig sessions have provided the most exciting and perhaps the most important stock market action in many months. The traditional year-end rally reached its zenith when the Dow-Jones Industrial Average reached a high of 1000.55 on January 19, 1966. After a short decline this high was equalled with an intra-day peak of 1001.11 on February 9, 1966, just sixteen trading days ago For thirty trading days in January and February the Dow had held, almost without exception, in the broad 980-1000 range with volume extremely heavy. Eight days ago this range was penetrated on the downside. sU1JseqgenLdrop was preciQitous;. Thursday, the decline has been 7. 8 in fifteen trading days. was a 1IIl1.l experienced in the first fifteen days of the May-June drop when the comparable decline was 7.2. A rally on heavy volume in Thursday's last half hour ran out of steam on Friday, and the market declined again to close the week at 932.34. The stock market could well, we think, be approaching a very important juncture. Fir of all, we do not believe that the current drop is going to develop into a full-scale bear mar- ket, ending the upswing which began in October of 1962. It is quite possible that we are now entering a transitional phase, and tha t the next rally couldafford the first signs of deteriora- tion that mark the bull market's end. However, more time appears to exist. It follows, then, that the bottom of the present decline, when it occurs, will become an important buying opportunity for equities, much as the bottom last June offered the best such opportunity in a number of months. It appears appropriate, therefore,to side risk that exists from current levels. the degree of down- W0 The end of this week saw the Dow-Jones Industfial fr.- e a em some support at around the 930-928 level, mentioned in last week's It e possible that a base form in the present area and an advance will se levels. Such an advance could very likely prove abortive. — We are not – if- aTket;-however;-and-we-would-prefer711-. for the time being, to present decline is complete. t the market may move lower before the downside target at the moment appears to be 910-890 in te es necessary at a later date to revise this think- ing, we will do so However, as no yty . ove such decline will probably provide a good buying nity. It is probably nec ss to start thinking at this point about the appropriate stocks to which buying reserves be committed on any further weakness. Listed below are seven- teen issues which we believe would be appropriate purchases on any market weakness, to- gether with present prices and projected buying levels. The letters H, c and s stand for Highgrade, Capital Appreciation, and Speculative Recommended List. The stocks will be added to the appropriate list if the buying levels mentioned are reached. Also listed (at the end of the list) are nine issues already on the list, which would appear especially attractive for new purchases on weakness. IAir Reduction (C) Present Price 71 Buying LeveI 65 !Parke-Davis (H) Present Price 38 Buying Level Allegheny Ludlum (C) 48 Howell (C) 44 45 40 (C) 37 1, Union Bag-Camp (H) 51 34 47 , & (SH)ecla (S) 20 33 (S) 26 Colt Ind. (S) 23 Cyclops Corp. (C) 44 Dayco (S) 28 \Ex-gll;.,O (C) 60 'Great No. Paper (S) 45 No.Am er. Avia. (H) 59 -IOlin Mathieson (C) 58 Dow-Jones Ind. 932. 34 18 27 23 19 38 24 55 38 55 55 West Va. Pulp (C) 53 Alum. Co. Amer. American Bosch Crowell-Collier Disney (Walt) General Dynamics Revlon Reynolds Metals Riegel Paper Sundstrand 86 31 45 54 57 50 53 23 42 ANTHGNY W. TABELL 48 80 28 41 50 50 47 50 21 39 Dow-Jones Rails 259.90 WALSTON & CO. INC. A\VTams This market letter 18 published for your convenience Mld Information and is not Rn offer to sell or fI. solicitation to buy any &eeUTIl\es dl8eURRed The Ln formntlon was obtamed from sOurces we to 11;' rehable. but we do not gURNLntee its accuracy. ''Valstoll & Co. Inc nnd its officers dlre'ton; or employees may have an interest in or purchase and sell the securitle; referred to herem. I

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Tabell’s Market Letter – March 11, 1966

Tabell’s Market Letter – March 11, 1966

Tabell's Market Letter - March 11, 1966
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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 March 11, 1966 Market action continues interesting. Last Monday saw the Dow-Jones Industrials reg ister the sharpest dip yet on the current decline. The Index was off 14.58 points and an intra day low of 914.81 was reached. This drop was followed by a rally which continued until roughly 2 p. m. on Thursday when the announcement by a major New York bank of a hike in the prime rate aborted what had been, to that point, a strong rise. Another rally attempt on Friday was snuffed out by late selling. So far, none of this has been particularly surprising. On February 4th, just three day before the Dow reached a peak at 1001. 11, this letter pOinted out in fairly strong terms, the vulnerability which then existed. Last week, while suggesting that the market might go lower, we stated – that the bottom of the present decline, when it occurs, will become an important buying opportunity for equities, much as the bottom last June offered the best such opportunity in a number of months. We went on to suggest a list of seventeen stocks to be added to our Recommended List on any further weakness. At a time like the present, unfortunately, there exists a tendency among market analysts to playa sort of numbers game with the Dow. One pundit says the downside objective is 910; another says a new low would indicate 875, and various other figures are offered for the confusion of the investor. Technical analysis is, unfortunately, not all that precise. One possible downside objective for the Dow was indeed reached at last Monday's low. There are further possible downside objectives in the 910-875 area, most of them centering roughly around 890. What is most important, we think, is that at present levels investment odds are now more favorable than they have been for some time, at the present juncture should be the seeking out of approp t concern of the investor be purchased with reserve cash. One way of demonstrating the present invest d s xamine stock prices in relation to current earnings. The ustr ver earnings for the year just ended probably amount to something in the a 53.5 or 1966, it appears safe to take 60.00 as a defined trends. In 1954, 1958 the average pIE for the cS' w a . ..over well-, sharply, and between 1954 and 9l\,'1'i'en, with the 1958-1959 bull market rise the average price earnings ratio for e 1961. Present price average. The following ta at five different pIE b to other plateau, and since 1958 the average price e . 2, with a range of 16.2 low in 1962 and 24.2 high in ke at 17.3 times earnings,a ratio well below the 1958-1965 shows the level of the Dow for three different levels of earnings RA T I0 1954-8 Avg 1962-Low Current 1958-65 Avg. 1961-High Earnings 13.9 16.2 17. 3 19.2 24.2 42.80 (1965 less 20')'0) 594 693 740 821 1032 53.50 (1965) 743 867 930 1027 1295 60 00 (1966-Est) 834 972 1032 1152 1452 The table is instructive. With the Dow at 1000, as it was in February, it was in a posi tion to increase substantially only if an earnings advance were coupled with a rise in the pI ratio. Meanwhile, the risk was substantial. A mere leveling-off of earnings, coupled with any drop in the pIE ratio, could have produced severe losses, and an unforeseen earnings decline could have led to a major disaster. At 930, the situation is quite different. Even with stable earnings a rise in the pIE to its average level could produce worthw!1ile capital gains. If earnings, as expected, increase to 60.00, even a decline to the 1962 low pIE w011ld yield a price som ewhat above the present. Major losses could pe sustained only by return of the pric earnings ratio to its former plateau of over eight years ago. At the moment, at least,this ap- pears unlikely. It thus appears far more important at this stage to recognize that the investment situa- tion has been drastically altered, and make plans to take advantage of it rather than playing fruitless guessing games about the eventual low in the Dow-Jones Industrials. Dow-Jones Ind. – 927.95Dow-Jones Rails 254.40 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThiS markl!t letter IS publillhed for your convenaence lInd Infonnation Rnd i'l not an offer to 811'l.1 or 1\ &OIicltation to buy any eeeurities dlseullsed The information was obtained from sources we blheve to L.., rellable, but we do not gUarantee Its accuracy Walston & Co, Inc and its officers, dlrl.'('tor8 or employees may have an Jnterffi in or pur-ehRBE.' and sell the securities referred to her,,

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Tabell’s Market Letter – March 18, 1966

Tabell’s Market Letter – March 18, 1966

Tabell's Market Letter - March 18, 1966
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W—–a–l-s-tIoncn.–&—Co. INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchan.ge and Other Principal Stock and Commodity Exchange. TABEll'S MARKET lETTER OFFICES COAST TO COAST AND oVErtsbs March 18, 1966 At Wednesday's intra-day low of 905.40, the Dow-Jones Industrial Average had reached the upper part of the 910-890 range projected as a possible downside target area by this letter. The Rails, at their intra-day low of 239. 92, had also reached all downside ob- jectives which can presently be noted. Obviously, in the process of building a base, further thrusts toward these downside objectives may take place. We continue to feel, however, that reserves may be committed to well chosen stocks on any weakness. In a disquieting market like the present one it is often worthwhile to step back and try to take a longer range view of the market picture. Actually, in terms of the Dow-Jones Industrial Average, the market over the past ten months can be described as a wide trading range. In the a peak of from that level declined sharpl over a seven-week period to reach a low of 832. 74 at the end of June. The subsequent rally carried to the intra-day high of 1001. 11 made six and one-half weeks ago on February 9th. The recent decline brought us to an intra-day low (to date) of 905.40 on Wednesday of this week. Thus, we have presently two reference points, both at the top and the bottom, for de fining a trading range which, at present, seems to have a slight upward bias. The February high was, roughly, 60/0 above the May 1965 peak, and this week's intra-day low is some 8 1/20/. above the low reached last June. Viewing the entire area between 832 and 1000 as a potential trading range, we were, at Wednesday's intra-day bottom, somewhat closer to the lower part of that range than to the upper part. The action of individual stocks within the trading t mentioned has been vi- ciously selective. For example, Fairchild Camera (162) at e J was selling for 36 and even this week, after a sharp decline,w.lS 4500/0 )f i e Ii as up only 8 1/20/0. On the other hand, Allied Chemical selling at 51 in i e Dow around 900, reached a low this week of 44 with the Dow at about tyme el. The possibilities of this sort of ago. On.J.une,28, ere quite clear almost a year Jetter used.the. following language. Our opinion ook for the stock market has not change We believe the market in in the advance that started from the 1949 low around 160 in the Do tr' Average to 741. 30 in November, 1961. …… The usual technical patt n er '0 ,like 1961, is a three-wave consolidating move in order for most stoc a r a oad base pattern prior to a major long term advance. So far, the market has fo we s pattern. The first wave of the three-wave pattern was the 1962 decline. The seco ave was the 1963-1965 advance. In this second wave, the averages reached new high terri ory, but the advance was extremely selective. The uptrend channel in which the market has held since the Cuban crisis low has ended and will, in our opinion, be succeeded by a broad trading area which will be featured by wide swings both up and down. The outer limits of this range are not yet clear……. The market could remain in this third-wave movement for a year or longer with the Averages and individual issues showing wide price swings. The lower limits of the range should be viewed as a buying opportunity. The upper limits should be viewed as a selling opportunity in issues with below-average longer term attraction. We see little reason to change this thesis today. Basically, we continue to feel that the major top for the stock market was reached in November of 1961, regardless of the lower level of the Averages at that time. We continue to adhere to the belief that we are in a new stock market phase which will complete the consolidation subse quent to the 1961 top and, ul- timately, lead to much higher prices in the late 1960's and early 1970's. Likewise, we con- inue to feel that this phase will take the form of a broad trading range during which action will be viciously selective and in which there will be wide swings both up and down. As we have pointed out before, such a trading range has been the most common post war experience following a long rise and we continue to feel that the third wave consolidation now taking place will be in the form of just such a range. It is still impossible to define v.hat he precise limits of this range may be, and it may turn out that the limits already reached f 832.74 on the downside and 1001. 11 on the upside are not wide enough. However, in order o have such a trading range. it is obviolmSly necessary to have downswings as well as up- swings. It is helpful to view the recent stock market weakness in this context. Dow-Jones Ind. – 922.88 ow-Jones Rails – 249.62 ANTHONY W. TABELL WALSTON & CO. INC. A trK'irbl.IPadttt letter 18 published for your convemence !Ind Information and Is not an offer to edl or a solicitation to lIOY lI-llY Meurlttell Tile Hl obt!\ined from sources we boAleve to b, reliable. but we do not gURrflntee Its IU'curncy Wft.h!ton &. 0. Inc, llf'd lh officI n .-1,re'to'r, 01' eml110yees may have an jnterest jn 01' purchase and seU the ecuT/tles referred to herein. WN801

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Tabell’s Market Letter – March 25, 1966

Tabell’s Market Letter – March 25, 1966

Tabell's Market Letter - March 25, 1966
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'Vdlston &Co. —–Inc —-INVESTMENT BANKERS 4 MUTUAL fUNDS MUNICIPAL 80NDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges F L …- OFflCES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 25, 1966 Thus in the beginning said Cicero, the world was so made that certain signs come before certain events. Today's stock market analyst could add, but not always. Over the past two weeks, with stocks wEll down from their highs and the Dow-Jones Industrial Average having suffered its steepest decline in seven months, many investors, mindful of the dramatic ending of the downswing last June, were looking for a classical selling climax. The Averages have now recovered some twenty-five points, and they are still looking..cg. . .,.!. Indeed, .a more unexciting decline than the recent onecouldhardly be imagined. Its final phase took the Dow-Jones from a high of 941. 42 on March lOth, before the prime rate rise was announced, to a low of 905.40 on March 15th which, as we noted last week, was in the upper part of the 910-S90 range previously suggested by this letter as a downside target. In the final three days of the decline volume was 7 million, 7.4 million and 9.4 million shares, respectively, a level well below previous past peaks. The erosion of prices was both steady and orderly on all three days. The subsequent rally was equally unimpressive in its ongms. On the first day of re- covery, volume was 7.3 million shares and in the following two days it slipped to 5.4 and 6.4 million shares – the lowest trading volume produced in three months. Finally, on Tuesday of this week an intra-day high of 942.92 was reached and the whole process was back where it started. In the course of th, eise, at the week, most of our short term indicators, which had touched oversold territory, r 0 eWufficiently to give buy signals. All this does not rule out the possibility that omentum may develop, and a classic high-volume selling climax Yet, it becomes relatively less likely passi.ng days. of what could be a potential base for tw – eks d ce h1S base 1S not yet broad enough to indicate an imminent move . —960-965 is about the best up- side target that can be read – – b filling around Ie eJ\0 t very easily with more backing and ventual objective might be considerably higher. Indeed, even wer ust to bring the Averages to new lows, the work al-' ready done in the 9 9 ra could probably be considered part of the base on the way back up. The Rails pres nt a somewhat different pattern. At their recent high of 272, the carriers had reached all their long term upside objectives, but the top formed was small and the only downside objective that could be noted was 246-244. A low of 242 was reached, followed by a rapid recovery. It is difficult at this point to predict the course of the Rail Average until such time as a new pattern forms. Action within the group should be mixed. Some three weeks ago, prior to the current weakness, this letter set out a list of seventeen stocks with support levels stating that these would be added to our Re;ommended List if the buying levels indicated were reached. This took place in five cases. To the Quality & Long Term Growth list we are adding Union Bag-Camp Paper (47 3/S), purchased at 47, to our Capital Appreciation list-we are adding Robertshaw Controls (36),purchased at 34, and Bell & Howell 45 7/S, purchased at 40. To our Speculative Capital Appreciation list we are adding Chris-Craft 23 3/4, purchased at 23, and Budd Company (IS 1/4), purchased at IS. All these stocks will be reviewed in detail in subsequent copies of this letter. We would also continue to suggest purchase of the other twelve issues recommended in our March 4th letter if the buying levels are reached. As time goes on, and, if the market pattern improves, it may become necessary to suggest purchase of some of them at higher prices. Dow-Jones Ind. – 929.95 Dow-Jones Rails – . . ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThIll market letter Iii pubhshed (or your I'on\'cmcnl'e .nd mformAtlOn Rnll not lin offer to sell or 1\ sohcltation to buy RflY lM!oI'!urities dlscu.'I,!I('(L Th(' )1\. (ormntlon WIlS obtained f!lm !lOUfl! we to 1., relial,le. but we do not lnIarlmtee Its L\cur,lcy \\-nll'otnn & Go., IIII' nnl Its officers. dlred,ors or emI'loC(''1 mll.) have an interest In or purchru;e and sell the SecUI Ltles lefel'red to hercin. WN301

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