Viewing Month: November 1966

Tabell’s Market Letter – November 04, 1966

Tabell’s Market Letter – November 04, 1966

Tabell's Market Letter - November 04, 1966
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Walston &Co. ———lnc.——— MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 4, 1966 The stock market air has cleared somewhat. Four weeks have passed since the Octo'ler low in the Dow of 735.74, and the Dow-Jones Industrial Average is hovering comfortably around the intra-day high of 816. 64 made a week ago. The advance, in any terms, has been impressive. From the October 7th bottom to its high of October 28th, the Dow had chalked up a better-than-100/0 rise and had recovered almost a third of the ground lost since February, 1966. Many individual groups have turned in an even more impressive performance. The time appears appropriate to reiterate and codify some of our previously-express ed thoughts as to the present-position 'of the equitymarket'for the-long-;- intermediate, and shorter terms. Let us take the longer-term first. This letter has repeatedly expressed the view, since August, that the market basically was at a bargain level. We have suggested and continue to suggest, that a large number of highgrade issues have reached major downside objectives and are available at more attractive prices in relation to basic earning power than has been the case at any time within the past decade. In short, we continue to feel that the market is approaching the end of a crisis of confidence which goes back to 1961, and that the latter part of the 1960's and early 1970's may well see a bull market cycle of comparable proportions to that of the 1949-1961 period. For the long-term, therefore, we are extremely optimistic. This, however, is not meant to say that the low was reached on October 7th at 735 in the Dow. What it is meant to suggest is that the stock market historian of the be able to look at the 1966-67 period and conclude that, historically, it w an time to buy stocks. So much for the long-term. What about the ove e next few months The Dow has, since August, nge bounded on an intra-day basis bythe September-high ..of 822. taking place in the 770-800 oe 9.4with.most oUhe tradin Wp ar that this area is a possible interme- diate-term base. Potential ups e but most of them seem to center around the figure of 860 i . a gical target, since it is also the level at which the heavy overhead u J1 d he 1965- 66 top first manifests itself. As yet, the Average has been u 0 ea t of this range by penetrating the September high. Were it to fail to follow thro h a eturn to the lower part of the trading range, the base would, of course, be broadene It is tempting to guess what might follow a rise to the 860 level. Were such an immediate rise to take place, the Average would have run out the upside implications of the base that now exists and a new pattern would have to form in order to indicate higher levels. Part of such a pattern could very well be a decline back to around present levels, or even a move to new low territory. Obviously, it is impossible to guess preCisely what will take place until the picture unfolds further. However, we would suspect that even were the market to drop back to new lows after such an advance, a great many stocks would fail to return to their present levels. For the shorter-term, the picture is less clear. Most of our short-term oscillators have reached would indicate, at least, that some consolidation must take place before the advance is extended and the September highs are penetrated. How low such consolidation might take the Dow is uncertain, but strong support exists in the en- tire 790-775 area. In the light of a market outlook such as the One described above, we continue to re- iterate the basic investment philosophy expressed by this letter since last August. It is that the investor should utilize market weakness for the commission of reserves to stocks which are technically attractive and which appear, fundamentally, fairly priced in relation to prospective earning power. ANTHONY W. TABELL Dow-Jones Ind. 805.06 WALSTON & CO. INC. Dow-Jones Rails 199.66 AWTamb Tbll market letter ill published for your convemence and Information and Is not an offer to sell or a aolldt&.tlon to bu), any aeeurltlea formation waa obtained from eourcea we believe to be reliable. but we do not guarantee Ita nccuracy Walston & Co Inc and ltl ftI eupioyee. may have an fnterm in or pupchaae and sell the 8eenritles referred to herein. .,. 0 eers, dl 'eeTtobc . In- r fa or WN.801

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Tabell’s Market Letter – November 11, 1966

Tabell’s Market Letter – November 11, 1966

Tabell's Market Letter - November 11, 1966
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Walston &Co. ———lnc——— MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November 11, 1966 One of the favorite formulas for success in Wall Street is Buy growth stocks. It is a sentiment with which this letter, certainly, would have no quarrel. We do not, however, possess the certainty,so prevalent in many quarters, that we know what a growth stock is. The typical advocate of the growth stock school, when pressed for a definition, will probably answer that a growth stock is one whose earnings are, in fact, in a long-term uptren Very often he will supplement this definition with a statistical passion play which demon- strates how well the i,nvestor would have fared over the previous five years or ten years had he only been clever enough to buy a group of selected growth issues. Presentations of this nature have one minor fault.Theselectiqn.of-the.growth stocks is, invariably, made atthe end of the period rather than at the beginning. It is a relatively easy matter to pick stocks' whose earnings are, tOday, up substantially over their levels of five years ago. Manyana- lysts seem to believe, at least implicitly, that it is an equally easy matter to pick stocks whos earnings are going to be sharply higher five and ten years hence. It is, unfortunately, hard to find anything in Wall Street's record which justifies such confidence. The following table presents a list of growth stocks with prices as of December 31,195 and today, together with percentage changes. All 1954 prices have been adjusted for subse- quent splits, and the current DuPont price has been adjusted for the General Motors distri- butions. Included also are the same figures for the Dow-Jones Industrial Average. This growth stock list has one feature not usually found in such presentations, i. e. , the selection was made at the beginning of the period and appeared in this market letter as part of a statistical study on January 14, 1955. It was selected by an ad- visory firm specializing in growth issues, and the issues -fa 're those which the financial community considered to have the 12/31/54 Recent Change q t n la 1\ 1/54 Recent Change Alcan Alum. 26 27 4 – 13 79 507 Amerada 62 74 19 ons 28 40 43 Dow Chemical DuPont El Paso Natl G Goodrich, B. F. Honeywell Intern'l Bus. M. w437 0 27 31 6 7 352 9 12 5 111 1035 Pfizer, Chas. 13 Radio Corp. 11 Rohm & Haas 70 Scott Paper 21 Shell Oil 26 Union Carbide 44 Dow-Jones Ind. 412 80 69 49 90 26 68 49 818 128 430 345 28 24 161 11 99 The list may be surprising to some readers. Of the 20 stocks, IBM is probably the only one that would have any certainty of being selected in a similar list to be compiled in 1966. It will be difficult for many to believe that Amerada, Dow, El Paso, Goodrich, National Lead or Rohm & Haas were considered to be the premier growth issues of their day, but any in- vestor with a memory of the 1954-56 period will recall that this was, in fact, the case. Of greatest interest, of course, is the performance of the list. Overall, its average appre- ciation is 161, which is, admittedly, some 60 better than the Dow over the same period. It is interesting, however, that this performance is due almost solely to the top few stocks. If on for example, removed IBM and Minnesota Mining; the two best acting issues;the performance would have been somewhat worse than the Dow-Jones Industrials. It is interesting to note that of the 20 stocks, 12 have, in fact, done worse than the Dow over the same period. The lesson to be learned from this, of course, is that there is nothing much wrong with the concept of buying growth stocks per se. It is, in fact, highly probable that any list of growth issues selected today may well contain one or two stocks whose performance will duplicate those of IBM, Minnesota Mining or Pfizer in the list above. The implication, however, that the selection of growth issues is an easy process, or that there is necessarily any correlation between past growth and future growth, can only be a disservice to the investor. Dow-Jones Ind. 819.09 Dow-Jones Rails 200. 53 ANTHONY W. TABELL WALSTON & CO. INC. AWT'a mb Thl. market letter I. pubUlhed tor your convenience and Information nnd 18 not an ofter to edl or a .wleltatlon to buy any &eeurltJea dllCuaaed. The In- formation wu obtained from .ources we believe to be reliable, but we do not guarantee Ita accuracy, Walaton & Co.. Inc. and Its officers director B'nploy. . mu ha'9!1 an int.eYftt in OT 'Pul'ehaae and Bell Ut.e aeclJr\tlt'B referred to hereln. ' or -. – –

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Tabell’s Market Letter – November 18, 1966

Tabell’s Market Letter – November 18, 1966

Tabell's Market Letter - November 18, 1966
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Walston &reo. —-Inc. ;…-..;…;.. MUNICIPAL BONOS UNDERWRITUS MuTu4l. FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. TABELL'S MARKET LETTER OFFICES COAST TO COAST AND OVERSEAS November 18, 1966 For the first time since the rise began on October 7th, the stock market witnessed a moderately severe two-day setback with the Dow dropping off 11. 47 points on Thursday and Friday. At the moment, investment odds still seem to be favorable. Our shorter-term indicators have moved from overbought into neutral territory, and any further extension of the decline would undoubtedly bring them into oversold position. It is, at present, impossible to read anything worse than a downside objective of 790 on the Dow, although the top could broaden. Nevertheless, good support exists at that level Worth mentioning at this point is the traditional year-end pattern which generally calls for the December.lowto.be.made late.in.the.month in market has d o w l l. . This could mean an extension of the decline from a timing point of view into middle or late December, followed by the traditional year-end rally which, according to present indications, might take the Dow to as high as 860. We would expect continued selectivity and are, therefore, making some changes in our Recommended List. We suggest that profits be accepted in Crowell-Collier & MacMillan (38 7/8). We are also adding six stocks, which are reviewed briefly below, and will be dis- cussed in greater detail in subsequent letters. ALLEGHENY LUDLUM (56) is the largest supplier of stainless and alloy steels and is expected to report record sales and earnings for the current year. Compared with last year's 4.81, net in 1966 is estimated at 5. 50 a share. 'Fhecurrent 2.20 dividend affords a return of 3.910 and is considered secure. Considerable downside support exists in the 53-48 area. Upside objective near-term is 65, while the longer-term cumemains above 100. ANCHOR-HOCKING (53) also has record 1966 earnin m e.Gf'he company is the world's largest producer of glass tableware and a a of glass containers. Results of 3. 60 a share this year, vs. 2. 92 last ye tiic mproving margins re- sulting from rapidly rising demand for itab od meso Earnings growth sug- ge.sts of an in curren .ann. iridend, 2 710 Wlth conslderable-support m the 50-4 ated a buy on dlPS-Wlth an obJective in the 68-90 area. W tJo CINCINNATI MILLING ( builder of machine tools, has been and problems stro t s demand not only will continue but expand in the futur Earnings this year a 'n e ated at 4.00 a share, up sharply from 1965's 2.84. The quarterly dividend rat re y was raised to 25 a share, normally supplemented by an ex- tra payment which wil ng 1966 payout to 1. 10 a share. Support for CMZ exists at 25 with an objective of 3 intermediate-term and nearly 60 longer-term. COLUMBIA BROADCASTING (57) operates the world's largest radio and TV network, with more than 245 affiliated radio stations and 209 TV stations. For the current year, net is expected to approximate 3.00 a share, up from 2.40 last year, strongly suggesting an in- crease in the current 1. 20 annual dividend. Company is believed still interested in entering the publishing field through acquisition, which, if accomplished, would add a desired degree of diversification. There is support in the 55-50 area with an objective near 80, and the stoc is being added to the Quality Long-Term Growth section of our list. KELSEY-HAYES (29) is deemed attractive on the basis of the earning potential of its disc brake product. Compared with preliminary earnings of 3. 45 for the fiscal year ended August 31, 1966, earnings this year may approach 4. 00. This is another case where the current dividend of 1. 30 must be considered a candidate for liberalization. Support for KW stands at 25, with the objective in the low 40's. HOME OIL A (21) is suggested for the attractive potential believed to exist, not only in its large Canadian land holdings and the important pipeline network it controls, but also fo the earning power overseas operations are creating. HOme has the only important natural gas discovery located in the British Isles, where the demand for natural gas could be large. Earnings this year will feel the brunt of inereased drilling activity and are expected to dip slightly from the 1. 08 a share of 1965. With an upside objective close to 36, and support evident at 20-17, the stock has excellent strength and is being added to the Specula- tive Price Appreciation section of our list. Dow-Jones Ind. 809.40 HARRY W. LAUBSCHER for ANTHONY W. TABELL Dow-Jones Rails 203.77 '-.. WALSTON & CO. INC. AWTHWLamb 'ftl. markft latter t. Ju.b1IIlltd. tor VDUl' linand lntormlltlon I'.nd t. not An oItl' to or .. IOIloltaon to bUl Aft, urIU.. I1IIOUIId 'I't\e In fol'lQltlon …1Ii IOUl'CItI WI btllt' to be HlIAblo. but Wt do not I\lIUAnW Itl llOQu.nu. Waliton 00., lno. and Ita dot…. dlNoton …..,.. ., WI U atutR ht 01' punhut And 1111 thl 1000\ultlH l'tftrHd. to . WN.101

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Tabell’s Market Letter – November 25, 1966

Tabell’s Market Letter – November 25, 1966

Tabell's Market Letter - November 25, 1966
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-. Walston &Co. Inc – – – – – MUNICIPAL BONOS UNDERWRITERS MUTUAL FUNDS Membe New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER The market continued its short slide on Monday and Tuesday of this week a 1C' at l.' I Tuesday's low had reached(;tlief.790Cdownsid,h;obJective mentioned in last week's market letter. A rally late Tuesday afternoon and Wednesday (which continued In the Friday post- holiday market) brought the Average to a high of 803.33 on Friday. Based on the action of most short-term indicators, and the onset of tax-loss pressures in many issues, we are inclined to expect continued irregularity into December, and con- tinue to advise the purchase of selected issues on weakness. One sl'ch issue is reviewed below. COLUMBlA BROADCASTING SYSTEM, I.C. Current Price Current Dividend Current Yield Long-Term Debt Common Stock 57 1. 40 2 5 94,600,000 20,312,778 shs Sales-1966-E 785,000,000 CBS means Channel 2 to millions of New Yorkers addicted to the fine art of TV analysis. To the almost 42,000 shareholders, CBS represents the hope of capital appreciation over the long-terrr.. Recently added to the Quality Long-Term Growth sect. on of our Recommended List, based on the favorabJe technical indications that combine to suggest an objective near Sales-1965 699,000,000 80 a share, Columbia Broadcasting System also has Earn. Per Sh 1966-E 3.00 an impressive array of fundamental factors to support Earn. Per Sh. 1965 Mkt. Range 1966-65 2. 40 335/8-62 our conclusions. CBS operates vision networIsrwith r lorgest radio and tele2 affiliated radio stations and s .n He these broadcasting activities are responsible for the lion's share of and nings, the outstanding man- agement team co-captained by William S nton continues its aggressive of diversification. Pwer through a desIred , — This diversification the following results in recent yearsthe ownership of the New Yo iin ba effitrl team, the purchase of 11, or almost 400,000 shares, of t e u s ' 0 n stock of Holt, Rinehart & Winston, a leading pub- lisher of textbooks, i eadily expanding musical instruments market, vast ex- pansion of overseas 0 ra io sound recordings and music publishing, and what could be an initial position in the estate field. The recent acquisition of Creative Playthings, Inc. , suppliers of materials r nursery schools and kindergartens, is another important step into the educational market. The most promising of these ventures, based on prevailing long-term projections, would appear to be those dealing with education. When the Holt, Rinehart stock was purchased, the prevailing market price of the publisher's stock suggested a total purchase value of approxi- rna tely 19 million. In view of the impressive demands expected to be made on the nation IS' educational facilities in the coming decade, and the resultant requirements for textbooks and other materials, this investment could provide considerably more than the initial investment just in dividend returns over the next 10 to 15 years. It is anticipated that CBS will increase its investment in Holt as time passes. Expressing their of earnings and -theprospects believe in store for the future, CBS directors recently increased the quarterly dividend from 30 to 35 a share, effecting an annual payout of 1. 40. For the current year, earnings are expected to make one of the largest gains of recent years, rising from 2.40 a share in 1965, to an esti mated 3.00 this year, on projected sales of approximately 785 million. Although no firm estimate currently is available.fornext year; 1967 results should show a continuation of the uptrend. The coming year will continue to benefit from royalties being received on the film My Fair Lady, rights for which have been sold to Warner Bros. Pictures. Under terms of this agreement, CBS is to receive royalties of 47 1/2 of the gross exceeding 20 million from worldwide rentals, and the 20 million mark was passed late in 1965. Exhibiting excellent relative strength and with considerable downside support in the 50- 55 range, Columbia Broadcasting System shares are recommended for purChase at prevailing market levels. Dow-Jones Ind. – 803.34 HARRY W. LAUBSCHER for ANTHONY W. TABELL Dow-Jones Rails – 203.44 A lTIDItW. letf..eLjlt…Publiahed for your convenience and information Rnd Is not an offer to Bell )r a VVtohiufiloYtV llta3 from sources we believe to be reliable, but we do not guarantee Its accnrnry emplOYeeB may have an mtereet in or pupchase and sell the securIties referred to herein. WALSTON & CO. INC. to buy any dlllCU&J.,..(i. T.4e -;'\'l1laton & Co., .Inc. t nd tU officers, dlreetors 0 WN801 –

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