Tabell’s Market Letter – February 20, 1969

Walston &- Co. —–Inc —– Membe New York Stock Exchange and Other Principal Stork and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER February 20, 1969 See what ttrnigs- ve S, … …. Marcu s Aurelius .. Desplte the weakness of the last week, it lS difficult to become bearish. Telling lt the way it really is, the charts suggest that the process of base-building is contmuing. The re cent decline has extended the depth of this base area, but has in no way altered the prevailing indications of higher markets to come. The base building could take a number of forms, the worst of which likely would be a pullback mto the 880-890 Dow-Jones area. The market will attempt to hold in the 910-920 reglOn, from which it started ltS last advance. A failure to hoI there would suggest the testing of the 890 level. In any event and until indications are change substantially, we cannot v,ew-th,s wea-kness-as the'start-of-any-major-decline, and-would rather remain wlth the optimists awalbng the anticipated upturn and taking advantage of what appears to be bargain pncing. When that upturn does come, the action is expected to be in the dividend-paymg, quality stock category. One of these time-tested issues that seems to offer the investor a favorable buying opportumty at present is General Cigar. GENERAL CIGAR COMPANY. INC. Current Price -29 1/8 Second largest of the domestic cigar producers, Current Dividend 1. 20 General Cigar appears to be at a Juncture where it of- Current Yield 4. 1 fers investors an attractive combination of capltal ap- Long-Term Debt 36,722,000 Common Stock 1,531,431 shs. Sales-1968-Est. 240,000,000 Sales-1967 220,590,000 Earn. Per Sh. 1968-E 2.20 Earn. Per Sh. 1967 1. 97 preciation and sat isfactory current income. Helped by a series of advantageous acquisitions made in recent years, sales and s and prospects for a n been in a strong uptren th,S into the fore- seeable Latest ava o. st st' suggest that cigar sales are on the ups' for first bme since 1964 when Mkt. Range 1969–6734 3/8 – 18 the widely publicized report on If the se . General Cigar would be than most of lts compebtors. The company is rt' I 1 ro iK the cigar field, especially in the tip-clgar categor e r' brand is an lmportant factor. Should a gentleman of- fer a lady a TipariI ore and more women are smoking tip-cigars and if, as is expected, the cigar s ki munity does expand, tip cigars are expected to widen their popularity. In addition, company has been upgrading its productive capacity and efficierJ,cy to the point at which . inite lmprovement in profit margm; would coincide with sales in- creases. We suggest that this lmproved operating performance has already started and should be apparent in future quarterly earnings reports. Since the ten-year earmngs low point was posted m 1966,General Cigar's market per- formance has reflected the rather impressive rebound that has taken place in overall net income. On no more than an average mcrease in sales volume in 1967 over 1966 results, earn- ings advanced approxlm,tely 28, rising from 1. 54 in 1966 to 1. 97 a share in 1967. For the 1968 year recently ended, this uptrend continued with earmngs estimated at a new-all-time hlgh near 2.20 a share. Looking ahead through the balance of the current year, per share re sults have been projected by mdustry ana.lysts to around the 2.40 level. In the meantime, management has been active in the acqUlsition field. The recent earn ings improvement reflects these additions to the corporate network and further acquisitions, perhaps outside the cigar field, could compound future growth. Dlvidends have been paid in each year since 1909. Prospects a.re favorable for an increase in the long- standing current 1. 20 a share annual rate, especially as earnings maintain their present uptrend. Technically, General Cigar has formed an extended base in the 28-34 area that indi- cates a price objective near 55. There is a higher goal readable at 72, Good support is found to exist at 26. Recently added to the Price Appreciation section of our Recommended List, General Cigar again is suggested for investment purchase at prevailing market prices. Dow-Jones Ind. 916.65 Dow-Jones Rails 263. 55 HARRY W. LAUBSCHER for ANTHONY W, T ABELL WALSTON & CO. INC. AWTHWLamb This market letter is published for )our ronvemence Rnd mformatlOn find IS nnt lin offer to sell or It solicitatIOn to huy any sel'Untles ulscussed. The JH- formation was obtamed from we hehlNe to he rl'ilRhlc. but. we do not guarantee Jts nccurnc) Walston & Co., Inc, nod Its officers, directors or employees may have an murest In or IJUTchasl.' and sen the sl'Cuntw'l ref..rred to hel('ll' WNSOI