Viewing Month: February 1967

Tabell’s Market Letter – February 03, 1967

Tabell’s Market Letter – February 03, 1967

Tabell's Market Letter - February 03, 1967
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–' TABELL'S MARKET Walston &Co. —-Inc —– MUNICIPAL BONDS UNDERWRITERS MUTUAL fUNDS Members New York Stock ExchanIJe and Other Principal Stock and Commodity ExchanIJel OFFICES COAST TO COAST AND OVERSEAS LETTER February 3, 1967 The popular Averages continued their rally last week with the Dow reaching a high for the year of 864.09. a number of important tests of the vitality of the market-uptrena-are-aboutto take place. The first such test will be the ability of the various Averages to penetrate the overhead supply just above their current levels. In the case of the Dow this supply exists in the 870- 900 area. However, it is likely that we will get an earlier test from some of the other broad- er indices. In the Standard & Poor's 500, for example, the supply area is at 85-88, versus a close on Friday of 87.36. A close above 88 would be favorable for this index, which should be watched closely. months or action.of. cators should also be watched. These indicators are generally designed to give' favorable signals from four to six months after major bottoms. It is unlikely that any of them will turn positive much before April, unless an extremely strong market continues, but their ability to do so would provide final confirmation of a new major uptrend. EAGLE-PICHER INDUSTRIES, INC. Current Price Current Dividend 33 1/4 1. 40 Many companies produce earnings growth from a highly glamorous and exciting product Current Yield Long- Term Debt 1. 40 Conv. Pfd. Stk. Common Stock 4. 2 22,000,000 250,000 shs. 2,067,654 shs. line, but there are numerous cases where such growth is simply produced by astute, cost-con- scious and relatively progressive maernnargeecmenent tyoeparesr,a ting the in icher Industries Sales-1966 170,913,863 has ce in effecting a growth Sales-1967 -E 175,000,000 record etter than that of many of Earn. per Sh. -1966 3. 51 Earn.-per Sh.-l967-E ,…,..3.65,,.3.7 &n g companies. For the five-year .e November 30,1966, EPI's growth -'gs'has outpaced 'such indu'strial giants''-' Mkt. Range 1967-65 37 – V Cash Register, International Nickel, Union Carbide, Texaco and American Home Products by better a 2 s companies as Phillips Petroleum, Allied Chemical,. American Tel & Te cco and Chase Manhattan Bank by better than 3 to 1. ThlS record testifies to ma g m s dedication to the principle of continuous profitability. In further reflection of this 66 earnings rose sharply to 3. 51 a share, from 2 66 in fiscal 1965, and more than d Ie the 1. 70 reported for fiscal 1962. Eagle- Picher's product mixture cannot be considered glamorous. The line runs the gamut from casket gaskets and dynamite caps to such prosaic items as baling wire and slab zinc, and includes copper ore, prefabricated steel buildings for gasoline service stations, mechanical rubber goods for auto and truck producers, plastic, paper and fiber products for a variety of industries, and tire and rubber molds. There is representation in the glamor area, however, through the company's electronics division, where products include germa- nium (of which EPI is the leading producer) and other semi-conductor devices, speCialized batteries, many of which are used in the various space programs, and other electronic com- ponentTs.he low price-earnings multiple that long has characterized these shares reflects the widely held, but somewhat erroneous, belief that since the company is an important supplier to the automotive and appliance industries, -the cyclical swings in'activity in these industries have unfavorable results on earnings. While this may have been true years ago, the acquisi- tion program followed in recent years has so broadened the product line that EPI no longer is dependent on anyone or two leading sectors of our economy. A decline in demand from the automotive or appliance producers is offset by the increaSing sales and profit opportuni- ties in other areas, such as in electronics and aerospace activities. This change in characte in earning power,combined with the profit motive that guides the company,is expected to find reflection in a higher price-earnings ratio as the investment community becomes more a- ware of the attractions inherent in this issue. From a technical point of view, the base thRt has been building since the middle of last year has created ananealof.fir.nllsuppnnt around the 26-28 area. A minor amount of over- head supply exists between the current price and the 34-35 level. Our longer-term objective remains in the 55-60 area. We feel the investment attraction of this issue is favorable enoug to warrant consideration for purchase at current market prices,and we are herewith adding i to the Price Appreciation section of our Recommended List. Dow-Jones Ind. 857.46 HARRY W. LAUBSCHER for ANTHONY W. TABELL (onnlRionwBa obta.nellrom sources we believe to baendreIhnafbolrem. abtuiotnwRenddoisnnoot tgaunaraonffteere tIots se.'lllceourracR),.8oWllcalllsattolnon t & dN ui AWTtlWmLay;haamve .opn Interest In or pUFchase and .sell the securiHes referred to herein atd'1te' otfi'Cera. 1N Mr'eefO,.. or' . WN.I

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Tabell’s Market Letter – February 10, 1967

Tabell’s Market Letter – February 10, 1967

Tabell's Market Letter - February 10, 1967
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-.'– W—a-l-sItnocn.&–C–o-. MUNICIPAL BONOS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES TO COAST AND OVERSEAS TABEll'S MARKET lETTER February 10, 1967 The stock market rally continued to further new highs this week before running out of steam toward the week's close. An intra-day high of 871. 71 was scored in the Dow-Jones Industrial Average on Thursday before afternoon profit-taking moved the index to a lower close. On the other hand, the market was unable thereafter to make much headway on the downside as a further drop on Friday was largely erased by an advance in the latter part of the day and more stocks actually scored advances than declines. We are, at the moment, reaching a pOint where it would be natural to expect some irregularity to set in. The market remains relatively overbought on a short-term basis as, indeed, it has been ever since midJanuary. Furthermore, the Dow.has.now area which this letter has, for' some time, suggested' would provide the next crucial test. The importance of the market's reaction to this overhead supply cannot, it seems to us, be stressed too greatly. The broad 860-900 area on the Dow constitutes an area in which a good deal of stock previillsly changed hands on no less than three separate occasions in recent market history – May-June 1966, June-August 1965 and October 1964-March 1965. It is the first major test of any sort of supply which the averages have had to undergo since making their lows in October. As might be expected, a great many individual issues are also now testing similar overhead supply areas, although it must be admitted that in the cas of individual stocks the supply in a number of cases does not exist or has already been successfully breached. The successful penetration of the overhead supply ar not necessarily indicate much higher levels, although this could eventually be an e r.,.s'''\L\ what it would indi- cate' from a technical point of view, is the fact e unq lOnably e'ntered a new phase at the lows of last October and would stro sug s t these lows might not be breached for some time. Meanwhile, as the market with confllcting-storles – … ghs, the confused investor is beset . romthe'frontpages of-Friday's news- papers, William McChesney t the economy may shortly resume a rapi rate of growth. On the 0 er ha, no i s of equally impeccable reputation are pointing to the obvious weakne f c ic indicators and suggesting the likelihood of some rather serious rna r ayeconomic. We confess that at this point we do not have the slightest ide ha 67 corporate profits are going to be, nor, we suspect, does anybody else. The pic u this point is far too complex to allow for rational assessment. We find ourselves, her, relatively undisturbed, at least as yet, by the prospect of lower earnings, since, as a matter of fact, in the past, periods of declining earnings have been pretty good times to hold common stocks. For example, there have been eight cases in the past thirty years where earnings for the Dow-Jones Industrial Average declined for three consecutive quarters, or more. In six of these eight cases, the market was higher or about the same at the end of the period than it had been at the beginning. In each case, the multiple accorded the trough earnings was higher than the multiple given the peak earnings, sometimes by a considerable margin. Thus, from the third quarter of 1937 earnings declined 500/0 to the fourth quarter of 1938. Prices, however, were just about the same at the latter date as they were at the former. To take another example, earnings in 1-957-58 declined 230/0. The response of the market was to go up 340/0 over the same period. This is not at all as paradoxical as it may seem. There was, indeed, a sharp market decline in 1937-38, but it reached its low when earnings had just begun to decline. Likewise, there was a sharp drop in 1957, but the low was reached three months before earnings peaked and began to turn down. Lower earnings may well be in prospect for 1967, and if they arrive, they may well account for many things. They may account, most of all, for the market's having been down sharply in 1966. Dow-Jones Ind. 855.73 Dow-Jones Rails 227.93 ANTHONY W. TABELL WALSTON & CO. INC. AWT'amb ThIB market let.ter IB published for your convemence and informRtion Rnd Is not an offer to sell or R sohcitatlon to buy flny &eeurltles uII5cusaed The in- formation was obtained from sources we believe to be rehable, hut emDloyees may have an Interest in or purchase Rnd sell the secuntles rweeferdroedntoot guarantee herein. Its accuracy Walston & Co., Ine. and its offieers, directors or WN.801

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Tabell’s Market Letter – February 17, 1967

Tabell’s Market Letter – February 17, 1967

Tabell's Market Letter - February 17, 1967
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,——– ————————- —- – —— ————- t1 eL Walston &- Co. MUNICIPAL BONOS UNDERWRITRS MUTUAL FUNDS Mamba.. New York Stock Exchange and Other Principa' Stock and Commodity Exchanges OFFICES co' to COAST AND OVERSEAS I TABELL'S MARKET LOTER February 17, 1967 It has often been pointed out in this letter that stock prices are largely determined by , three factors, earnings and dividends, money rates, and investor confidence. The first two of these can easily be quantified, but the third, while nebulous, is a highly important factor. It explains why in a period of low confidence, such as 1949, blue chips of the caliber of Stan- dard Oil of New Jersey and General Electric could sell for seven to eight times earnings to yield 6-7. It likewise explains .why the stocks of marginal companies with uncertain pros- pects sold at astronomical levels in a period of high investor confidence such as 1961. As we have pointed out in the past, investor confidence has, since 1961, been in a downtrend. In that year the-Dow-Jones In.dustrial Average sold.for 24.2 times.earningsys. 13 1/2 times earnings at the end of 1966. The present level of 14 1/2 times earnings for the year just ended, appears rather modest when judged by the standards of recent years. We pointed out this fact in a letter written last August which suggested that, at that timE prices by historical standards were exceedingly low. We noted that 23 of the 30 Dow stocks v.erE ; cheaper then than at the 1962 lows, and half were cheaper than at the 1957 lows. The object 0 1 , this exercise was to show that stocks appeared rather equitably priced and presented a mini- mum of downside risk over the long term. The following table presents the optimistic alternative. It takes the 30 stocks in the Do and shows, in addition to 1967 earnings, the current price, the current pIE, and the high pIE ratio that prevailed in the 1956-66 period. In the final column is shown the price at whic the stocks would sell tOday if this high ratio were applied. Applying this procedure uniformly to all stocks would result in a Dow level of 1500. This is, purely theoretical since quite obviously, all stocks are not going to reach their hig ever, serve to demonstrate that, regardless of the 0 a nlrl , potential in a great many issues if, in the future, fo time. It does, how ere is a good deal of are applied. Stock Earn.1967-E Price pIE Hi Earn. x High pIE r Allied 30 . 40 1 , 92 I -. 4 American Tobacco Anaconda Bethlehem Steel Chrysler DuPont Eastman Kodak General Electric General Foods , General Motors Goodyear T & R Intern'IHarvester Intern'l Nickel Intern'l Paper Johns Manville Owens-Illinois Procter & Gamble iJ Sears Roebuck Stand. Oil of Calif. 1 Stand. Oil of N. J. ' Swift & Co. Texaco Union Carbide ., ! Uu.nSit.eSdteAeilrcraft Westinghouse Elec. .,.I. Woolworth Total – 2.245 3 OW .0 3. .0 4.50 4.30 4. 10 5.25 3. 50 3.25 4. 80 2. flO 4.25 3.50– 4.00 2.25 5.50 5.25 4.00 5.40 3.85 5.30 4.20 3.50 2.20 131. 00 58.35 Dow-Jones Ind. 850. 84 11 8 36 10 39 11 157 21 138 31 85 20 74 18 75 14 44 12 38 12 88 18 28 11 56 13 60 17 82 20 52 23 62 11 63 12 52 13 78 14 53 14 79 15 45 11 53 15 22 10 438 851 14.6 A,lWTamb have an In1uat In or pmehMe and sell the aeev.rltles referred to herein. 95 23 73 18 198 22 77 14 49 31 232 42 189 30 129 38 155 19 99 22 77 17 55 32 153 24 60 27 114 24 84 – 40 '110 38 85 16 88 19 99 22 88 22 l18 30 115 22 116 20 84 26 91 20 44 3374 ANTHONY W. TABELL503 Wtna ALSTON & CO. INC. ';; WH.l

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Tabell’s Market Letter – February 24, 1967

Tabell’s Market Letter – February 24, 1967

Tabell's Market Letter - February 24, 1967
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Walston &- Co. Inc. ;….-….;……;..; MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and. Commodity Exchange. TABELL'S MARKET LETTER OFFICES COAST TO COAST AND OVERSEAS February 24, 1967 OLIN MATHIESON CHEMICAL CORPORATION Current Price Current Dividend Current Yield 59 1/2 1. 80 3. 0 Under the impetus of a favorable economic climate and a highly capable new management tea Olin Mathieson Chemical Corporation has been Long Term Debt Common Stock Sales-1966 Sales-1967-E 297,000,000 13, 278, 000 shs. 1,117,000,000 1,200,000,000 realizing s me of its potential in recent years. While sales were rising by more than 50 for the 1961 through 1966 period, moving from 700 million to more than 1..1 billion, earnings underwent a dynamic improvement of more than 100, rising Earn.Per Sh. -1966 Earn. Per Sh.-1967-E Mkt. Range 1966-67 5.03 5. 50 46 – 64 1/ 4 to 5.03 a share, from 2.47 in 1961. Despite certain misgivings about the general trend of the nation's economy during the current year, 1967 re sults presently are expected to show sales in the vicinity of 1. 2 billion and earnings of approxima- tely 5. 50 a share, for the sixth year of consecutive improvement. Olin has call e d 100 million in 5 1/2 debenture bonds convertible into common stock at 50 a share to 1972 and at 55 a share thereafter. If conversion of all outstanding bonds had been effected in 1966, earnings for last year would have been 4. 56 a share, instead of the 5.03 reported. Adjusted earnings for 1967 are estimated at 5.00. Selling at a relatively low price-earning multiple for the chemical industry, these shares are aalVe-average attractin accounts seeking longer-term c owth in dividend in- While normally referred to as a chemical c n, 1 . more of an industrial co plex than generally is realized. Sales for 1966 vea fo ing breakdown chemicals, 25; pharmaceuticals, 22; metals, 22; fo odu, ightweight papers and cellophane films, 16; and firearms and . continuing to-emphasize its bread an butter chemical an neglectful of expansion into areas tha appear to offer favorable gro . . a move was the establishment of Ormet, the nation's fourth larges Jj s 1 ducer. Owned jo 1 th e ,1per, Ormet at last is enjoying profitable, capacity op- erations in its alum a c . g and processing facilities. Recent price hikes are expect ed to have a stimulati e fe n the contribution that Ormet makes to Olin's overall earn- ings. In addition to alum ,Olin now is believed to have the highest all-round competence and the lowest costs i e brass industry as a result of the large scale modernization pro- gram carried out in recent years. The Company's Squibb division is one of the nation's most venerable drug houses. Squibb ranks among the drug industry leaders in terms of sales, with approximately 90 of its own volume derived from ethical products. Foreign sales have more than doubled since 1960 and the construction of new production facilities in Ireland, Australia, South America and Continental Europe is expected to accelerate this impressive trend. Squibb's R&D is directed at such important areas as cancer, heart disease, antibiotics and nervous and mental disordersC. onstruction of new container and plywood production facilities in 1965 and 1966 has accounted for a good share of the earnings gains enjoyed by Olin last year. Any pickup in home building activity would also be a distinct jJlus for this sales..Olin's cigar- ette and lightweight printing papers continue to enJoy record demand, wlth the clgarette paper growing at better than 4 1/2 annually. The division ad a sha.rp sales spurt in 1966 as a result of the increased demands of the Vletnam war. Whlle mll1tary normally accounts for 25 of this division's sales, 40 of 1966 volume was denved from government buying. This division produces the famed Winchester rifles and shotguns. From a technical view, the base that has been building since late 1965 has created a firm area of support around the mid-50's, substantially limiting the near-term downside risk There is a moderate amount of overhead supply existing between 60 and 65, but the accumula tion pattern that has been developing suggests an attack on our initial price objective at 80. Our longer-term price goal remains near 130. We feel that the investment attraction of this issue is favorable enough to warrant consideration for purchase at current market levels. OLM was added to the Price Appreciation section of our Recommended List last April at 63. Dow-Jones Ind. 847.33 Dow-Jones Rails 229.15 HARRY W. LAUBSCHER for ANTHONY W. TAB ELL WALSTON & CO. INC. AWT' HH'L mbTbl. market -le3tter III published for your convenience llnd inlormatlon And Is not an offer to sell or a IIOlicltation to buy any 8e(!UflUea dlacuued. The Information was obtained from 8ouree!! we believe to be rellahle. but we do not gutl.rRntee Its accuracy. Walston & Co.. Inc. and its officers, dlrecton or employees may have an interest in or pU1'cbaee and sell the 8eCUrities referred to herein.

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