Viewing Month: March 1968

Tabell’s Market Letter – March 01, 1968

Tabell’s Market Letter – March 01, 1968

Tabell's Market Letter - March 01, 1968
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Walston &reo. !nc F( Membe.. New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFlCES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 1, 1968 The question of What is the stock market going to do is never an ea sy one to answer. It is made even more difficult at the present time by the fact that, before answering, one has to ask,What stock market are you talking about 1967 High Recent Low 1967 High Recent Low Eagle – Piche rInd. Gulf Oil Goodyear Tire 41 3/8 80 54 3/8 45 71 48 5/8 Litton Ind. 120 3/8 Bausch & Lomb 72 1/2 Molybdenum Corp 77 5/8 63 118 42 3/4 32 5/8 The dual of market can best.be exemplified by the above table which shows the 1967 high and this week's low for six selected stocks. The Dow-Jones Indus- trial Average over the same period is down some 13, yet in the left-hand column we have Eagle- Picher (a special situation which happens to be on our Recommended List) which was actually higher this week than at its 1967 high, and two blue chips which have suffered only modest declines. In the right-hand column, on the other hand, we have Litton Industries and Bausch & Lomb, two former market favorites which have dropped almost 50 due to tempo- rary earnings difficulties, and Molybdenum Corporation – – typical of the sort of thing that has been happening all too widely on the American Stock Exchange. Both lists, we think, are fair and representative, and either one could be extended indefinitely. We have had, in other words, two markets which, by and large, have existed simul- taneously. The first market consists of stocks which rightly or wrongly, were being placed in a growth category. In a great many instances, the justified and, in other cases, it was not. In any case, once the magic label a d, the rise which took place in this market during 1967 was far out of a ctual earnings growth which took place. This was the sort of thing that finan i write ere talking about all last year when they repeatedly complained about s ati is absolutely no doubt that a speculative orgy was rampant in 1967 about this-is is 0 ar. ntly, coming to its inevitable end. . Id-be-surprised'at'a'lh .. – And yet, what of the er one where there was little speculation and whose components genera ly ba 1 e\ or moved ahead modestly last year By and large, these stocks did t .e e Saturnalia, and their declines in the first two months of 1968 y modest. It would be rather illogical to expect the technical pattern of G 1, to be similar to till t of Litton and, indeed, it is not. It is perhaps tim a return to basics. Stock prices, we have always said, are the product of three fa s — (1) Earnings/Dividends, 2 Money Rates, and (3) Investor Confidence. This last factor, probably the most important over the short-intermediate term, is a nebulous thing and difficult to measure. It often expresses itself in high-flown concepts, (compound annual growth and synergistic management for example) which are eventuall relegated to well-deserved oblivion. It is our belief that investor confidence can best be pro jected by turning to the technical action of the market. What, then, of the future For the first segment of the market mentioned above we are not optimistic. It is obvious that confidence — as expressed by historically high multi- ples for a great many growth favorites, has been shattered and we suspect that this dis- illusion may turn out to be more or less permanent. Despite the fact that the largest portion of the decline may have already been seen, we are still able to visualize lower price object- ives for a great many of last year's — . The big question at the moment is whether the carnage that has characterized the growth stocks in the last few months will spread to the remainder of the list. It may well do so. The terminal phase of a decline has often been characterized by the salty phrase, When the paddy wagon backs up to the door, it takes the good girls along with the bad. Yet, the relatively unexploited nature of a great many issues leads us to believe that any such decline, if it takes place, will be a temporary thing and prOVide an important buying opportunity It is, after all, the optimistic point of view that price declines prOVide the courageous with an op- portunity to buy cheap stocks. We think 1968 will see a number of such opportunities. Dow-Jones Ind. 840.44 Dow-Jones Rails 217.46 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thin market letter Is published for your convenience and miOTmntlOn Rnd IS not an offer to sell or R soli('ltation to buy Rny se'uTlties discussed. The In. formation was obtained from Bources we beliNe to be rehRble. but we do not guarantee Its enlployee8 may have an Interest In or purchase Rnd sell the aeeuntH.'S rererred to helem Walston & Co. Inc and Its officers, directors or WN801

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Tabell’s Market Letter – March 08, 1968

Tabell’s Market Letter – March 08, 1968

Tabell's Market Letter - March 08, 1968
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– Walston &Co, —–Inc —– M.mb…. N.w York Stock Exchang. and Other Principal Stock and Commodity Exchang OVER 100 OFfICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 8, 1968 In like a bear and out like a bull could be the action for March 1968. Many of our downside price objectives were reached during the recent selling waves and technical indi- cators have signaled a deeply oversold condition. With the odds now favoring an intermediate recovery, there is a short-term bottom that could support a rally into the overhanging suppl zone around 850-880 Dow-Jones Industrials. ELECTRONIC SPECIALTY COMPANY Current Price Current Dfvidend Current Yield 27 -nil nil – .. Long-Term Debt Conv. Pfd. Stock Common Stock 20,900,000 15,860 shs. 1,780,524 shs. Sales-1968-E Sales-1967-E 125,000,000 115,000,000 Earn. Per Sh. 1968-E 1. 80 Earn. Per Sh.1967-E 1. 50 Mkt.Range 1968-67 333/4 -191/8 Combme imagination and aggressive man- a g e m e r t .. pfl.rticipationin the fastest growing areas of technology and you come up with Electronic Specialty Company. A far cry from the old Iron Fireman Company that formed much of the basis of the current corporation, ELS today represents an mtri- guing vehicle for investor representation m electronics, environmental control or space conditioning, structural and mechanical sys- tems and components, and power generation and conversion. One of the earlier conglomerates, in act- ion if not in grown almost entirely through acquisition. Since 1955, the five companies added to the ELS family. As a in 1955 to an estimated 115 million in 1967. During Specialty has h 0 less than.twenty- ose m around 2 million t' period, earnings rose from a deficit to a peak level of 1. 91 a now a thing of the past, earnings 96 it costly reorganization program .m e future are bright and results a-snare froln the-1. 50 esti- The company's encou . are enhanced by a number of developments. These include the d ; i0v er ew products and processes applicable to the aero- space and aircraft . e ese is a super-strength aluminum alloy for use in casting aluminum. . n m a lays an important role in ELS' s future. Company has an- nounced plans to build fa' y capable of producing 1,000, 000 pounds of titanium castings annually. Titanium is ected to prove a vital part of the U. S. supersonic transport progra Although defense sales continue to increase, commercial and industrial revenues are expanding at a more rapid rate and already constitute almost 600/0 of total sales. Sales break down along the following lines' electronic components, 400/0; space conditioning, 270/0; structural and mechanical components, 250/0; power facilities, 80/0. In view of the impressive prospects inherent in the construction industry, ELS's Space Conditioning division is expected to be a big contributor to income in the foreseeable future. This division produces central heating and air conditioning units and related items. Residential and commercial sales are about equal and new construction accounts for a major portion of business. As a result of its breakthroughs in the field of solid state controls, ELS has been able to design heating and cooling equipment controls to replace bulky mechanical controls, yielding striking advantages in safety, dependability, maintenance, -installation and costs. Other areas of research and development activity include plastics technology, air pollution and smog control, miniature heating systems, forging processes to eliminate stress concentration and stress corrosion problems, labor-saving devices and materials technology. included in the long-term debt are debentures convertible into common stock at 32.50 a share. Conversion of all debentures and preferred stock would result in a dilution factor approximating 270/0. Management holds 110/0 of outstanding common. From the technical view, there is a base in the area providing considerable support and enabling the projection of a price goal in the 37-39 range, followed by a higher one at 72. Recently added to the Speculative Price AppreCiation section of our Recommended List, these shares again are recommended for purchase at prevailing market levels. Dow-Jones Ind. 835.24 Dow-Jones Rails 215 14 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. Thla market letter 18 published for your convemence and Informat1On nnd IS not an olTel to sell or a soliCitation to buy any securities diSCUSsed Th In;formation was. obtained from sources we believe to be reliable. but we do not g\ll\rantee its accuracy, Walston & Co-. Inc. and Ill! officers dlrecto have an Interest In or pUFchase and sell the seeurttu's referred to heLem. 80 AWTtiwLamb WNSOI

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Tabell’s Market Letter – March 15, 1968

Tabell’s Market Letter – March 15, 1968

Tabell's Market Letter - March 15, 1968
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Walston &Co. lnc, Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 15, 1968 For the first hour and a half of its operation on Friday morning, the Dow-Jones News Ticker concerned itself, almost exclusively, with one subject — the foreign exchange crisis, which was treated in nineteen separate stories. The only story on the tape that interrupted this constant outpour was a four-line item which announced that the U. S. personal income rose in February to 658.4 billion; which just happened to be the largest mo n thly increase in over two years. We think this neatly illustrates the present dilemma cl the stock market. The two basic central facts concerning stocks and the economy in March 1968, are (1) that the U. S. economy is prosperous' and improving, and (2) that stocks, by and large;-are not,by any measure, exploited. Yet, ever since the first of the year the equity market has been moving lower — dramatically so in the case of some stocks, grudgingly in the case of others, but in any case, lower still. Now no investor needs this letter to tell him the twin reasons for the decline. They are, of course, the war in Vietnam, and the foreign exchange crisis. Under the stimulus of the latter, the Dow-Jones Industrial Average took its sharpest dive so far this year on Thursday, dropping some eleven pOints to a new intra-day low for the move of 824. 26, and a partial recovery on Friday was stemmed by late profit taking, although the Index still closed with a plus sign. All this is not meant to say that either Vietnam or the gold crisis is ephemeral. The are, unfortunately, all too real. The number of Americans killed in Southeast Asia has now passed the 20,000 mark and the deep-seated malaise and evidenced by Senator McCarthy's showing in New Ha;m'shi fott by the nation is re, the foreign ex- change situation, however imperfectly it may be quieting to those who hope for freer international co he iC, is obviously disce stable foreign trade en- vironment. However, we think it well to neve!' discounting the same thing twic t' ctu e old adage about the market's e -r market response is ultimately necessary to the twin it is highly likely to be completed quickly and to have term' ated e e of the problems is solved. Crises have created down markets t — the tight money crisis of 1966, and the Cuban missile crisis of . It should be noted that both of these were major buy- ing opportunities. Presently, a 10 k tock market history affords a few interesting facts. In the post war period, major be arkets have had a time span of between four and nine months from high to low. It is, in this connection, worth noting that the present downswing will be just six months old this week. It is also worthy of note that in past Presidential election years, when a change in Administration ultimately took place in November, that the market has tended to decline in the beginning of the year, and rally rather strongly in the Spring and Summer, with the bottom usually taking place some time between March and May. This ob- viously conforms with the 1968 pattern thus far. All these factors seem to point to the oc- currence of a rather important market bottom which, if it has not occurred already, could 'occur within a fairly short period of time. The level at which such a bottom might occur, however, is another story and one where the indications are somewhat less clear. If the 1968 decline is to develop into a full- fledged bear market, the conclusion will obviously be a typical high-volume selling climax. Such a climax, based on current volume levels, would undoubtedly produce a new record in stock exchange turnover — perhaps in excess of 20,000,000 shares. It would certainly, tem- porarily at least, drive the averages considerably lower than they are today;and it must be admitted that the present crisis atmosphere is ripe for such a development. On the other han a low volume bottom occurring around pre sent levels would not be an unheard-of phenomenon and, indeed, the potential base already built up around the 820-845 level in the Dow, is im- pressive. . What we are saying here is that from an investmeItt point of view, we would be willing to commit reserves either immediately on weakness, or if current prices hold, over time. Whichever type of bottom takes place, we believe that the ultimate result will be an upside move of worthwhile proportions. Dow-Jones Ind. 837. 55 ANTHONY W. TABELL Dow-Jones Rails 217. 95 WALSTON & CO. INC. ThIll market letter \1'1 Jlublished for your convenience Bnd InformatIOn Rnd Is not an offer to sell or a soliCitation to buy an) secuntles ,Jiacussed The information W8.!I obtained.trom. sources We believe to be reliable. but we do not guarantee Its J.ccurac). Walston &. Co. Inc. and its officers. directors or employee! may have an IDterest in or pUl'chase and sell the securities referred to herein. WNBOl

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Tabell’s Market Letter – March 22, 1968

Tabell’s Market Letter – March 22, 1968

Tabell's Market Letter - March 22, 1968
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Walston &Co. – lnc – – – – Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 22, 1968 Last week's market traversed old ground. Monday's rally, in response to the two- tier gold system, brought the Dow to al). intra-day high of 854.25, just about as high as it had been since early February. Unfortunately, the rally lasted only one and one-half hours, and most of the rest of the week was spent drifting lower. Although peace news late Friday cause a small gain, by the end of the week the Dow had retraced all the advance from the March 14th gold-crisis low. From a technical point of view it must be admitted that all these fluctuations have some significance. For 28 trading days, ever since February 12th, the market has held in a range bounded roughly by 820 trading ranges exist in all the other popular indices. 'As long'as this sort of thing goes on, the more significant these trading ranges become and if they do, indeed, represent accumulation, the results could be moderately spectacular. The Dow, for example, now has a potential upside objective of somewhere between 870 and 880, and similar objectives exist in other indices. Still, this trading range can be viewed only as a potential base formation. So far, as any observer can easily see, the rallies have been unimpressive,and some major change in the investment climate will probably be necessary to get the market off of dead center. In a period where political, monetary and economic surprises are occurring almost daily, it would not be too hard for such a change to occur. What we are again raising here, of course, is the unanswered question as to whethe the present downswing will bottom out with the classic climax-selling sequence, or will smother itself out in the current frustrating trading that there is any answer as yet, and we suspect, moreover, that it is rathe at 'Qi.he me for most invest- ors to take protective steps. The investor who has 0 i so ,high-flyer he bought last Summer, is hardly h'Olped by being told his stock a 0 end. Of this obvious fact he is all too painfully aware. As we said t e vestment policy at this stage calls for being a buyer of common stocks it we ss, i. e. if the selling climax se- – — quefice develops;-b'r-over tim-e; mately penetrated on the As to what stoc to b, r otential-'-ba'se-breadens and-i-s-ulti- \0iYO' r at the moment none of the ambiguity that be- clouds the future cour e . uring the desultory markets that have character- ized 1968 so far, s and industrial groups have constantly fought the de- cline — either staun y ef . to go down, or, in some cases, even moving ahead. In- cludedin this group are..;-.,.,pparels, banks, finance companies, grocers, home furnishings, retailers, savings and loans, buildings and textiles. The obvious relative strength being shown by groups of this type should impress even the most unsophisticated market observer. The counter-argument, of course, is that all the groups mentioned above are so-called defensive issues, and such issues always go down less in a poor market. Admittedly, the argument runs, growth stocks are performing poorly now, but as soon as th market turns, these magical favorites of 1967 will again make everybody wealthy. This is a delightful theory which unfortunately betrays a total ignorance of the behavior of markets. One of the most dependable rules of market behavior is that stocks and groups whic act the best during a decline generally turn out to be leaders in the next upswing. This is true whatever label (i. e. defensive, growth, cyclical) the investment faddists of the place on them. ReynoldsTolacco,Jor ,just of a defensive stock as it is to- day when it dramatically outperformed the market during the 1956-57 decline. It promptly demonstrated its defensive qualities by going from 13 to 90 over the next four years, Bur- lington Industries was cyclical when it was outperforming the market in the 1962 break. The ensuingcycle took the stock from 9 1/2 to 50. We think, in other words, that the invest or who ignores the continuing above-average performance of the groups mentioned above, an instead seeks bargains in depressed 1967 favorites, does so at his peril. He is likely to be missing some of the most exciting investment opportunities of recent years. Dow-Jones Ind. 826. 05 Dow-Jones Rails 218. 54 ANTHONY W. TABELL WALSTON & CO, INC, AWTamb This market letter 18 published for YOUr convemence And Information and IS not an offer to sell or 1\ solieltation to buY a.n) securities t.hBCUB8ed The In formation was obtained from sources we beheve to be l('llable, we do not guarRntee its accuracy. Walston & Co Inc. and its officers. dl;E!Ctors 0; employeee may have an mterest In or pUl'chase and sell the seCUTlUI.S referred to helem.

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Tabell’s Market Letter – March 29, 1968

Tabell’s Market Letter – March 29, 1968

Tabell's Market Letter - March 29, 1968
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Walston &Co. –..;;;.;..; Inc. , L I Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 29, 1968 The market finds itself at a crossroads. On one hand, the market could continue its recent improvement if the breadth conforms to an improving trend. Such a happening could lift the DJ Industrials into our previously projected goal area at 850-870. Several of our technical indicators suggest that this could be the path to be followed in coming weeks. How- ever, any pickup in adverse Vietnam or political news again could subject the market to sell ing pressures that might result in another testing 0 f 820-825. Despite the hazy outlook, there is no scarcity of stocks that appear to offer attractive potential. Three of these, al- ready on our Recommended List, are discussed below and again recommended for purchase. For sheer ability to sustdn a unique growth ve-nding in- dustry again stood out in 1967 as sales reached newall-time highs. Sharing in this im- pressive trend and quite apt to continue being a star performer within its industry in the future, THE MACKE COMPANy(l7 1/4 ) would seem to offer the long-range investor an attractive vehicle for capital appreciation. Macke is the fourth largest of the publicly- held food service companies. Compared with an industry wide annual growth rate of 8.40/0 for the 1960-1966 period, Macke's rate of growth for sales and earnings was 29. 50/0 and 24.20/0, respectively. Prospects for the fiscal year ending September 30, 1968, indicate that earnings will rebound from the slight dip of last year' s a share to an estimated 1. 00 a share, while sales are expected to continue the uptrend that has been in progress for forty years and rise to around the 90 million level. Technically, Macke's chart presents that favorable pattern of a long-term uptrend that has been in progress since the lows of 1962. exists in the 17- 13 area. Our price objective for Macke is in the 2'tf5 r e, ,followed by a longer-term price goal at 42. Aluminum stocks have been among the hardest Naf all . strial groups over the last year, primarily in reflection of a S trend. Although not entirely .. 0.uLof the woods, by any means, g d' xpected.toberever.sed this year, suggesting that the current low pric e 'g Iple may prove an advantageous buying opportunity for the long-pUll v casualties of this industry has been ALUMINUM COMPAN OE A 1'(2). Alcoa's current pIE is approximately 300/0 below the ave a f f' n years, and at a point where further downside risk would be substanh d e anticipated improvement in net income this year is s to und the 5 a share level, from last year's 4.69. This also suggests the possibili another increase in the dividend rate, now set at quarterly. Alcoa's recent anno cement of a breakthrough in the water desalinization field, especially from the economics standpoint, suggests the possibility of an additional source of future earnings, augmenting what already is a highly favorable longer-term prospect. From the technical view, Alcoa has a strong area of support extending from 70-60. The base that has been built in recent years suggests a longer-term price objective be- tween 100 and 110. With the country going dry;' according to the latest TV advertiSing campaign sponsor- ed by CANADA DRY CORPORATION (321/4 ), accelerated consumption of mixers and soft drinks could be in the wind. The rapidly approaching summer season with its thirst quench ing appeal also suggests a further rise in sales of Canada Dry's leading products. Bene- fiting from this trend and'from'the important innovations'that the company's new manage- ment has implemented, earnings have been turned around and results for the fiscal year ended March 31, 1968, are estimated to have risen to around 1. 20 a share. This com- pares favorably with 1967's A further gain to around 1. 50 a share is projected for 1969. Canada Dry's chart rev-eals that a base of considerable strength has been built in the 33-28 area, indicating a price objective at 44. Downside risk in this situation seems lim- ited to the base area. Dow-Jones Ind. – 840.67 Dow-Jones Rails 218.99 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO., INC. HWLAWTat This market letter Is pubhshed for your convenience and information nnd IS not An offer to sell or .t soliCitation to buy any securltieu Ihscussed The in- formation was obtamed from sources 'e beheve to be reliable, but we do not guarantee its tecumc) Walston & Co., Inc. and its officers. director r emDtoyees may have an mterest in or purchl18e and sell the secuntles referred to heleln a0 WN.SOl

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