Tabell’s Market Letter – April 21, 1967

Tabell’s Market Letter – April 21, 1967

Tabell's Market Letter - April 21, 1967
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W—a-lIsntocn.-&-r-e-o-. MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. FILE /I TABELL'S MARKET LETTER OFFICES COAST TO COAST AND OVERSEAS April 21, 1967 The market strength continues. The Dow-Jones Industrial Average chalked up its seventh consecutive advance on Friday and in the process reached a new recovery high of 888.20. Even more impressive was the action of the Standard & Poor's 500-Stock Index which achieved an intra-day high of 92.90, just 2 below its all-time high of 94.72. Throughout all this, breadth action continued favorable. Although objectives for the bases formed in the August 1966-January 1967 period are being reached on most indices, alternative interpretations of the bases indicate that an extension of the move is possible. Moreover none of the signs of deterioration which normally accompany a major top are evident. In these circumstances we can do littleotheythanto continuetosuggestan aggressive investment approach. GREAT NORTHERN PAPER COMPANY Current Price 44 3/8 After wandering in the wilderness of despair Current Dividend 1. 20 caused by overexpansion and falling profit margins Current Yield 2 7 for several years, the paper industry appears to be Long-Term Debt 72,355,471 0.40 Cum.Pfd.Stk. 1, 959, 691 shs. Common Stock 2,677,483 shs. making a rapid comeback in profitability and would seem to offer the investor attractive opportunities for capital appreciation. One of the most profitable of all domestic paper Sales 1967-E Sales 1966 135,000,000 123,890,000 Earn. Per Sh.1967-E Earn. Per Sh. 1966 4 4 . . 50-4 36 . 60 companies, Great -gin of almost 24, e to benefit frtthe ti i several yea rg 0 producers, a ntin with a profit mar rtibularly well situated e ands of the next U. S. '-based newsprint approximately 5 of total Mkt. Range 1966-67 49-30 1/8 , n, Great Northern recently has – . -.- -. – if' its.production into such areas as specialty printing papers and lineria per for the packaging ind1!-stry. These activities now account for respectively. The rapid growth of magazine and book publi t; demand for printing papers will exceed project- ions now being ma f e rs. This is likely to prove especially true in the field of textbook puo . important factor in printing papers, Great Northern should be a direct ben this trend. The higher intere arges and unexpected costs incident to the 50 million expansion program now nearing mpletion at the Georgia containerboard plant held first half earnings to only an 8 increase over the 1. 87 reported in 1966's first six months, despite a sharp gain in operating profits. Already announced price increases for newsprint, to take effect July 1st, should provide a boost in final-half results. For the fiscal year ending September 30, minor improvement over fiscal 1966 results is antiCipated with estimates approximating 4.55 a share However, the new production facilities should be in full swing during most of fiscal 1968, and industry specialists feel that net income in the area of 5.00 to 5.50 a shar would not seem an unreasonable estimate. If the 7/0 investment credit is restored and made retroactive, GPP could substantially reduce its 1967 tax bill, perhaps by as much as 2.5 million. This alone could add between 20 and 25 a share to 1967 earnings estimates. This anticipated earnings improvement is predicated on an economy that will permit th industry to operate at a high level of production. If the economic downswing now in progress continues through the June quarter, GPP's earnings this year may show only slight improvement over 1966 figures. The primary attraction here, however, is the improved earning pow that has been built into the company and the potentially impressive gains seen for several years ahead. Directors, in reflection of their optimism, recently increased the quarterly dividend to 30 a share. From a technical point of view, the base that has been building since the middle of last year has created an area of firm support starting around the 38 level. There is a minor amount of overhead resistance between 45 and the all-time high of 49. While our initial price objective is in the 68-70 area, we are carrying a longer-term goal near 90. Added to our Recommended List's Price Appreciation section on March 17 at 37 3/4, we again recom mend the stock for purchase. Dow-Jones Ind. 883.18 Dow-Jones Rails 230.52 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. This mark efomr.mDlaot1ioenn et le mw&a1s tter la publlBbed tor your and Informat hoabvtaei naend InfrtoemrestsoIunrcoers pWUeFebheubeevaendtosebllet hreelisaebcleu,r b iti ion and 0 no ut we do not es referred to t an offel' hgeuraeirna.ntee to Bell or a solicitation to buy any Ita accuracy. Walston II Co., Inc. l!eCurltJes dI8CWUJed. The and Ita officers dlreeton In. or WN.801 f' – …

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