Tabell’s Market Letter – October 11, 1968

Walston &Co.;;,;;,.;; Inc …..–;.. FIL6 Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER October 11, 1968 The fact. that the overbought condition of the market a week ago has, so far, not been substantially corrected, suggests a further extension of the short-term decline that started underway this past week. As previously stated, the anticipated decline should be one of limited extent and should prove helpful in creating a more healthful market climate — one that could foster a strong rise in equity prices before the end of this year. In view of this condition, we continue to advise that clients husband cash reserves, temporarily, awaiting a buying level that would prove more advantageous than that now afforded. In last week's letter we announced removal from our Recommended List of ten issues. Cash generated from the be addedto reserves. In coming weeks,wewill be tions to the Recommended List. A brief review of seleCted stocks-alr'eady on our Recommenc-I ed List follows. PHILLIPS PETROLEUM (68 ), along with international oils in general, has put on an impressive market performance in recent months, rising some 20-plus since July. This rise came in the face of expected lower earnings for the year, now estimated at around 4,.60 a share, vs. 4.71 last year. However, most oil analysts anticipate a rebound in 1969. Addingto the attraction of this issue is its participation in potentially oil-rich areas such as Alaska's northern slope. With a price objective still set at 86 initially, Phillips continues to be attractive for investment purchase. PACIFIC PETROLEUMS (21 ) ,45 owned by Phillips Petroleum, is another issue ben- efiting from the renewed interest in oils. Having already risen 50 from the June low, the outlook is for continued market strength in'reflection of net income, nowesti\ mated at around for 1968, vs. last year, an ampli ' d fatl911 program and \ steadily increasing crude oil production. pur price a ci e 0 above 30 and with good support in the 20-18 area, the stock remal s attra e purchase. AMERICAN MACHINE & FOUNDRY in the market limelight of late, rising almost 30 just in the last m.onth. ov s exceptional in the light of a dis- 1-10 – to its bowling business. and'satisfactory earnings outl Outlook for 1968 on AMF currently se 0lil that due to AMF's strong have no effect on the common dividend. 0 ings estimated at the highest level since 1961. With e discount from our 35 price objective, the stock war- rants consideration rc . ' BURLINGTON I U IES ( 49) has shared the renewed enthusiasm for textile stocks that characterized of the market in recent months. The basis for this optimism would seem well founded in view of ,earnings estimates centering on the 3. 10 level, up sharply from 1967's depressed 2.30 a share. The recently increased quarterly dividend, now at can be considered a for further liberalization in coming months. The favorable chart pattern for BUR continues to a price objective at 76. MEDUSA PORTLAND CEMENT (40 ), despite the unexpectedly lower earnings fore- cast for the quarter recently ended, remains an attractive issue in the building products category. While at present it is difficult to make an accurate earnings estimate, we would continue to hold MPD and recommend adding to commitments on any additional weakness. There is good support in the 40-'38 area, with major support at 30. Our price objective re- maio ns at 4 6 . ,' . ' , , , , , '0,0,. , SHARON STEEL's (48) almost dramatic rise of recent months can-beattrilJuted to-tne -, – marriage proposed by NVF C,orporation via a tender offer. However, management has recommended that its stockholders reject the tender offer. Recent news that Sharon has been approached by Alloys Unlimite'd has brought forth a no-comment from SSH management, but Sharon's optimistic earnings potential undoubtedly makes it an attractive merger candi- date. This, together with the 90ntinuing bullish chart pattern and a price objective at 52, followed by a higher goal at 7i, suggests retention of the stock, and even purchase on any ..'near-term w.ea k n e s s . , . A,n up-to-date edition of our. Recommended List is now in preparation and will be issue shortly. .,' Dow-Jones Ind. 949.59. Dow-Jones Rails 269.46,' i0 , HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. J. This market letter is pubhshed for your convenience and mformAtlon and is not nn offer to sell or a l\()itcltatlOn to buy any securities dLscussed. The In formation was obtained from sources VIoe believe. to be rehable, hut we do not guarantee its accuracy Walston & Co Inc, and Its officers. directors or AWTHWLamo 'em..1!!0Yees mID' have I\ll interest in or IluFchase and sell the referred to helem, WN'O'