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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