Viewing Month: December 1967

Tabell’s Market Letter – December 01, 1967

Tabell’s Market Letter – December 01, 1967

Tabell's Market Letter - December 01, 1967
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r————————————————————————— / Walston &Co. —-Inc. MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges TAIELL'S MARKET LETTER OFFICES COAST TO COAST AND OVERSEAS December 1, 1967 As we enter the last month of what should have been to most investors a highly pros- perous 1967, it would appear that a few further thoughts on the general market are perhaps in order. It has, withal, been an interesting year. History is, after all, an ever changing pano rama, and this is true of stock market history as much as any other kind. Not unexpectedly, therefore, the past twelve months have seen a number of factors brought to bear on the mar- ket which are, essentially, unique in recent financial history. And yet, 1967, in perhaps its most important aspect, has been a year typical of the entire past quarter century – – a year which haS'provided'a-basically favorable climatefor equityinvestment. This is not to say that the entire history of the past twenty-five years has been one exclusively of rising markets. There have certainly been difficult and frustrating downswing e. g. 1946, 1953, 1957, 1960, 1962 and 1966. There have also been periods in which the tren of stock prices has been basically sideways, e. g., 1947-49, 1951-52 and 1956-57. Nonethe- less, to our mind, the one salient characteristic of the past quarter century is this. It has been a period when the American investor could, with the application of intelligence and effort, earn, by investment in the equity market, an unprecendently generous return on his savings and thus better provide for the financial security of himself and his family than at any other time in the history of the United States. Now there is a type of mentality that is unable to resist the belief that the past twenty five years have constituted one great economic debauch. This is probably a heritage from the more unfortunate excesses of the early Puritans who was sinful and would, ultimately, in some way or other, have to be p 's t events in the in- ternational money markets have again brought such are today muttering dire forebodings about America 'f\. ut e woodwork, and the of er reverence for a minor metal whose principle economic use is the of e again we are being assured thatthe economic prosperity of the m'd-m n y i which'we with a whop.r some sort of a bad dream from technlcians,-Q'ur-job is – to analyze facts, not ideology n e that we see nothing in the facts at the beyond, we see man 1 rs for the intelligent investor. The concrete expo- sition of this is p our Recommended List which includes, at the moment,' more issues than it 11 1 so ime. Having unburdene selves of these thoughts we can now face the thorny issue of the stock market at y -end 1967 with some rationality. The trouble with any expression of optimism, such as that above, is that some will feel that the immediate future is one of sweetness, light, and the opportunity rapidly to become rich. The facts, unfortunately, do not support this view either. At the moment, the stock market as measured by the popular averages had reached, or at last week's highs was close to reaching, the upside objective of the base formed in early November. Moreover, it had retraced just about half the decline from the September 26th high to the November lows. This would be precisely normal if the recent drop were to be part of an ongOing process. Thus, it would that a rather crucial point has been reached. At this stage, a new pattern will have to form, and we would like to think that such a pattern will point strongly toward-higher stock prices in 1968. It may well.do.so,.but to say that it definitely will do so, is not forecasting but guessing — an activity we assiduously try to avoid. We are, in effect, reiterating what we have been saying for the past few months — that the long-term outlook for stock prices is favorable, and the intermediate-term picture less clear. Under such circumstances a modest buildup of reserves and! or a ruthless switc ing from weaker to stronger issues can only be described as prudent. We would, in other words, defer taking any definitive portfolio stand until the unfolding pattern of December and January makes the intermediate-term market picture more clear. Dow-Jones Ind. 879. 16 Dow-Jones Rails 235.38 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb This market letter III published for yOUt' convemence and Information I\nd Is not an offer to sell or a solicitation to buy any aeeurltles dIBCUSBed. The in formation euDloyeee mwaa.vs obtained from BOurces we beheve to- be reliable. but have an Interest in or pUFchase Bnd sell the securities rweefedrroedntoot guarantee herein. 'Ita .accuracy. Walston &. Co., Inc. and ita offteers. direetors or

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Tabell’s Market Letter – December 08, 1967

Tabell’s Market Letter – December 08, 1967

Tabell's Market Letter - December 08, 1967
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—– — Walston &reo. Inc ;;…;;;….;….;… MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST to COASt AND OVERSEAS lABELL'S MARKET LETTER December 8, 1967 MEDUSA PORTLAND CEMENT COMPANY Current Price Current Dividend Current Yield Long- Term Debt 3 Conv. Pfd. Stock Common Stock Sales-1967-E Sales-1966 Earn.Per Sh. 1967-E Earn. Per Sh. 1966 Mkt. Range -1967-66 28 1/2 1. 20 4. 20/0 25,005,000 74,936 shs. 55,000,000 47,650,006 2.60 3.01 203/8 – 30 5/8 be on the less critical list. The patient recorded itS peak year of healthful profitability in 1959. Since then alingering illness set in that has been diagnosed as acute excessive capacity with the result being a withering away in operating ratios, bringing them down to —the-tlangerously'low'niid-700/0 a'rea– This' was accompanied by varying pressures on price structure that made it difficult for the patient to sustain any rallying tendencies. With the illness correctly diagnosed major alterations in operating methods have been undertaken, and a period of intensive examination indicates that the ill- ness is subsiding and the patient soon rna The patient is the cement industry and no one can question the rough time it has undergone for almost a decade. The improvement we favorable projections currently being made for residentia n e is premised on the residential construction over the coming years. Our population has just ffsons and their progeny will require shelter, sugges e2 0 i ark. All these per- m r' ease 'in household for- mations that in turn should translate into a in . sidential construction ex- penditures. In addition, increasing funds wi oca 0 highway building programs, expenditures for which will-be 1 conclusion'ef Vietnam-hostilities. All this indicates a sharp rise in c If these prognostications prove. ac- curate, we feel one of the would be Medusa Portland Cement. Medusa isfje e producer, but one that has had a superior oper- ating record in th y . It was the only major company able to report record earnings last year, . mo mpanies underwent a sharp drop in operating income. Much of Medusa's rec nt cess can be attributed to the geographical area served, which includes WisconSin, ois, Ohio and Pennsylvania. A new plant in Mbhigan is undergOing trial runS and should benefit from the expanding Michigan economy. Other favorable factors that have contributed to Medusa's better-than-average showing include its major position in the more profitable and somewhat less competitive white cement market and an sive cost-conscious management. The company has established good marketing and distribution procedures and diversification into the aggregate business is proving highly profitable. Medusa has avoided the ready-mix business, which has proven quite costly to other companies and yields an unsatisfactory return on invested capital. In the current year, Medusa is expected to report a slight drop in earnings from 1967's 3.01 a share, to around the 2. 60 level. This reflects the generally unfavorable economic climate that has characterized this year. However, 1968 is fully expected to witness a swift return to favorable rates of return and an earnings projection of 3.25 a share, a new record, now seems reasonable. Looking further ahead, industry analysts suggest that Medusa's efficient operation could be realizing earnings in the area of 4. 00 to 4. 50 a share. Now selling for little more than eleven times earnings, these shares appear to have substantial appreciation potential. Recently added to the Price Appreciation section of our Recommended List, Medusa has formed a substantial base in the 25 area suggesting a price objective at 66, and continues to be suitable for purchase at prevailing market levels. Dow-Jones Ind. 887.25 Dow-Jones Rails 234.51 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. A WT' HWI ,'amb Thill market le feomrpmloaytieoens mW&IU1I tter is pubUebed for obtai ba.VI!! naend infrtoemre sts oIunr coyersopuwUr eFceohbnaevsheeenvaIenendtcoe&eballentdhreeIlnilaIfbeoclreum,riatbJteiuoltlnrwefelf.hedrdroeIsdntnooot t an offer hgeUreaimn.ntee to Bell or a solicitation to buy any it's accuracy Walston & Co.Inc aanedt'uIrtistieosmd.cJeJrJac,uued Th J ……… onr WN.lOl a ….

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Tabell’s Market Letter – December 15, 1967

Tabell’s Market Letter – December 15, 1967

Tabell's Market Letter - December 15, 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. COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER December 15, 1967 .. actien has failed to. impese any great degree ef clarity en the steck market sltuatlOn. Smce the Dew reached a high at 901. 76 a week age, at which time eur shert- ra.nge escillater teuched ever-beught territery, we have seen a 3-day decline fellewed by a mild advance, and the escillater has meved back into a neutral area. So far the cerrectien mild with breadth reasenably geed and a number ef issues meving to. new highs. Ability to. cemplete the cerrective phase while helding at er areund the 860 suppert level en the Dew weuld have to. be censtrued as a bullish signal. Meanwhile, the invester can best himself market uncertainties by helding these stecks with a high degree ef q.ualty and defenslve value tegether with an abeve average appreciatien petential. One sucn issue is reviewed b-elew. – – — .. – — Current .Price Current Dividend FEDERATED DEPARTMENT STORES 75 -1/ 4 i If the sheppers crewding into. the natien' s 1. 70 department steres this Christmas seasen are any Current Yield 2.3 indicatien, retail sales this year sheuld rise to. a newall-time peak. Despite the much-talked-ef Leng-Term Debt 70,672,292 scarcity ef meney, there seems to. be mere than Cemmen Steck 20,810,735 shs. eneugh changing hands ever the ceunters. True, much ef this Christmastime's gift buying is Sales-1968-E Sales-1967 1. 5 billien 1. 4 billien being cenducted via the charge acceunt but, by and large, Jehn Q. Public appears willing to. spend his higher inceme, and much ef that Earn. Per Sh. 1968-E Earn. Per Sh. 1967 spending is departmeJlt, ste trend to. it wa EtSlft geeds and ether B efiting from this em big-ticket items, Mkt. Range -1967-66 75-7/8 – 54-1/8 the leading stere chains are antici- Federated Department Sto.res is ana tra . e inal quarter. We feel that ed yticipating in this eriented industry. Federated is the stere chain, including within its ergani- zatien such City, Bulleck's in 0. a m & Straus and Bleemingdale's in New Yerk i e in Besten, and Feley's in Ho.usten. All ef the abeve-nal!led units i egraphical areas that have demenstrated an abeve- average rate ef pers I nc grewth in recent years. Mest ef them also. have benefited frem the trend ever the decade to. branch eut into. the suburbs where the rate ef return en invested capital ha een mere faverable than that ef mest dewntewn lecatiens. The mest eutstanding exceptien to. this is Abraham & Straus's main Breeklyn stere, censidered to. be the mest prefitable large department stere in the natien. Federated has grewn largely threugh acquisitiens. With existing fleer space up to. a faverable level, the number ef new-stere epenings is expected to. decline next year, but the new year is likely to. bring with it an initial feray into. disceunting. This meve co uld impreve prefits substantially in the years immediately ahead. So. far this year, Federated has been able to. buck the dewntrend in earnings experi- enced by the majerity ef department stere chains with its ewn earnil1gs threugh the first nine menths ahead ef a year age. Fer the full fiscal year ending January 31, 1968, earnings are expected to. shew a geed imprevement ever the 3.54 a share ef fiscal-1967, perhaps rising to. 3. 65 a share. With new stere epenings decreasing in number, there is a pesSi- bility that the increased earnings co.uld bring abeut a rise in the current 1. 70 annual dividend payeut rate. Technically, Federated shares have built a base ef censiderable suppert in the mid- sixties area, suggesting an initial price ebjective ef 90, fellewed by a higher ebjective at 124. With these high quality shares effering this substantial appreciatien petential, they were added to. the Quality & Leng Term Grewth .ectien ef eur Recemmended List at 69-7/8 en Nevember 17, 1967. They again are recemmended fer purchase at current market levels. Dew-Jenes Ind. Dew-Jenes Rails 880.61 234.35 HARRY W. LAUBSCHER fer ANTHONY W. TABELL WALSTON & CO., INC. AWTHWLsb Thill market letter Is publlBhed for YOUr convenience and information Rnd is not an offer to eell efomrpmloaytieoens mWaMy hoabvteainaend InfrtoemresteoIunrcoeer. pwureehbaeJsielVaendtosebllethrfe,hsaebcJeu,ritbieust rweeferdroedntoot hgeuraerina.ntee Jts ln8Ol.i 'tat' &t- oCbOU,Y y nco an . o…….era. recTtohres ion-r

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Tabell’s Market Letter – December 22, 1967

Tabell’s Market Letter – December 22, 1967

Tabell's Market Letter - December 22, 1967
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Walston &Co. —–Inc —– F I L dOl TABEll'S MARKET Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS leTTER December 22, 1967 It has been remarked previously in this space that the market letter writer is, as much as anyone else, a prisoner of tradition and that each December he is called upon to forecast, with precision, the shape of the equity market for exactly the next 12 months. It matters not that he might wish to issue a forecast for a shorter or longer period, or that, indeed, he might wish to plead uncertainty and issue no forecast at all. The annual demand for the coming year's prediction must, in any case, be met. For reasons which have been made clear in this letter before, and which will be fur- ther discussed below, we would much prefer not to be tied down to a specific forecast at this ofparticular time. 'nonethelesshonor tradftfonanct-deiiver ourvelves a few thoughts. It is interesting to contrast the outlook as we approach 1968 with that which obtained at the beginning of each of the past 2 years. As we entered 1966, the economic outlook, we were being assured on all sides, was uniformly rosy, and this, indeed, turned out to be the case with profits rising into newall-time high territory for the year. The stock market, how ever, spent most of the year going through the second-sharpest decline in the past quarter century. As 1967 began, the portents of a possible recession were quite clear and, in fact, the first three-quarters of the year did see falling profits. The stock market, however, spent most of the year going up. The moral is, of course, that at the beginning of the past 2 years, a great deal of the economic forecast was already built-in to then-existing stock prices. As we enter 1968, then, the economic outlook is —and here is the rub—just what is the economic outlook for 1968 By contrast with 1967 and there is, at the moment, S)svery little unanimity among economic forecasters. There vf(J'y obvious leading signs of a business improvement on the horizon; the are 1 e 1 ber of areas of po- tential disquietude, notably inflation and af s. It seems to us that thre is, at the moment, very little of a 1968 in e present level of stock prices. -.- … this letter over the past three month that a great deal of technical \J 5 h t 1J al considerations center around the fact the 11 drop in stock prices in October 1967, from which we ha en partially recovered. This damage, as we have stated, must be re i b 19 a continued advance is to be predicted. The long range outlook quite y s higher stock prices. What happens between January 196 and the ultimate reah h n at forecast, is the issue which is still somewhat in doubt. Yet, in this atmo re of doubt,/Sye cannot help feeling that, if there are any surprise in the 1968 market, th will come on the upside rather than the downside —in the realizatio of the long range forecast sooner rather than later. The reasons for this are two-fold. They are I that 1968 could be a better business year then many now anticipate and, (2) that there is still a good deal of room for improvement in the confidence factor in a great many, if not all, stocks.J The current stock market can be exemplified by comparing the current prices of IBM a favorite of many investors, and Republic Steel, a favorite of practically none. At current levels, IBM is selling for about 50 times antiCipated 1968 earnings of 13. Assuming the company's earnings grow at the anticipated 20 rate, the company will be earning. in 1977, 67, and will have earned 337 over the ten years. Thus. current prices mark the stock at something over nine times the 1977 projection and around twice the total' earnings for the next decade. Republic Steel, on the other hand, could probably earn about 5. 50 in 1968 and is now selling at 8 times those earnings. Assuming growth, it is still cheaper than IBM on earnings a decade hence, and is selling for much less than the total earnings throwoff of the next ten years. The above is not meant to suggest any conclusion as to the relative merit of the two issues — it is only meant to suggest the possible dramatic results if any sort of relative re-evaluation of Republic Steel, and other securities of its type, takes place during the year. We would prefer to enter 1968 by having a portfolio so constituted as to take ad- vantage of any such re-evaluation. A 2 P. M. Dow-Jones Ind. 885. 11 VERY MERRY CHRISTMAS TO ALL ANTHONY W. TABELL Dow-Jones Rails 230.38 WAL'STON & CO. INC. AVK.'i';aUmetter IS pubhshed tor your l'onvenienci! and i'lformatlOn And IS not nn offer to sell or R soliCitation to buy an) securities dlll(!usBed. The inefomrDmloa)t,ieoens mWaa.y8 hoabvtaeinaend infrtearmetrtsoIunrcoers pwUFechbtLeSlieevaendtosebllethreehsaebCleU,rities rweeferdroedntoot hgeurRermlL.ntee Its aceUrRC) Walston & Co. Inc. and Its officers. directors or WNBOl 1A\

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Tabell’s Market Letter – December 29, 1967

Tabell’s Market Letter – December 29, 1967

Tabell's Market Letter - December 29, 1967
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Walston &Co. …;..;..;;;.,,;,;.;; Inc Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LIETTER December 29, 1967 For some years now, we have studied the familiar seasonal tendency of the stock market to stage a year-end rally, and it has been the custom of this letter each December to point out some of the conclusions that can be derived from a study of this phenomenon. We have suggested that an exhaustive study of chart patterns since the Dow-Jones Industrial Average first was computed in 1897 indicated that such a rally, however minuscule, invariably had taken place. A number of interesting facts about the market action of the year end may be noted. (1) – As stated above; art identifiable year-end'rally'.haStaken place inevery year since 1897. This rally often has been of great magnitude with advances as great as 280/0 having been recorded. It also, on occasion, has continued with only minor interruptions for as long as six months into the new year. However, on other occasions, it has been of only a few days duration, reaching a top extremely early. Thus, in 1960 and 1962, the rally reached a peak in the first week in January. In 1961, 1963, 1964 and 1967, it continued into February or March. In 1965 and 1966, the rally peak was reached in early February. (2) – There has been a persistent tendency for the rally to begin early in years when the market has been up, and late in years when the market has been down. In recent upward years, 1959, 1963 and 1967 are examples, the rally commenced from early in December. In 1962 it began late in the year and 1966, a downward year, is no exception to this rule. (3) – The important thing to watch in conneqtion ajion in the early months of the new year is the low for the previous Decem e . ow as been broken in forty-one years out of the past sixty-nine, ent ee of these forty-one cases, it was broken in January and February. it ver been broken later than mid-March, with the single exception e market is able to hold above its December ow for the 2 1/2 will not be broken. For example, in t .ea e t ecember low was broken early In January 1960 and January 3 and 1967 it never was broken. 1965, as noted above, was unusua with e e low of 850. 19 being broken in June when the Dow reached an in (4) – In yea 0 4. l W-D ber low has been broken, the subsequent trend has been downward two-t . d 0 1960, 1962 and 1966, of course, are typical cases. Again, 1965 was an exc,…,….u (5) – The magnitude of the rally is an important clue as to the year's market trend. For example, an advance of 100/0 or more from the December low has been followed by an upward or neutral market in twenty-nine of the thirty-four years that such an advance has occurred. An advance of less than 100/0 from the December low before an identifiable co,rr'ectH ion takes place has been followed by a downward market in twenty-three of the thirty-five years. In 1961, 1963 and 1964, the year-end rally approximated 100/0. In 1960, 1962 and 1 for example, it was less than this figure. ,(6) – The length of time in which the rally continues into the new year also is import- wasant. For example, in eighteen years the !,ally continued into March or later. In sixteen of these eighteen years the eventual trend upward. In 1964, the year-end rally continued into March and in 1961, 1963 and 1967, into February. In the coming year, therefore, the December low of 868.76 is an important point to watch. If the present rally tops out in early January and breaks this low, it would be strong indication of probable market weakness. A like indication would be a failure of the Dow to advance 100/0, or to approxima tely 955. On the other hand, if a rally continues into Fhrlla'rvl or March, or reaches above 955, an extension of the upswing might be indicated. A VERY HAPPY AND PROSPEROUS NEW YEAR TO ALL 905.11 233.24 ANTHONY W. TABELL WALSTON & CO. INC. A VtffJiitJlfJ11etter is published for yOur convenience and information find 16 not nn offer to sell or a soIlcltation to buy Rny securities dISCUSsed. The infemorpmlOaYtieoe!n! mw.ao.y!! hoabvtaeinaend infrtoemrestsoiunrcoers J,wluel'chb8eJlIieevaendtosebllethreehsaebcleu.r.itbiuest rweeferdroedntoot hgeuraerma.ntee its accuracy Walston & Co., Inc. and Ita officers dlrectors or

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