Tabell’s Market Letter – April 11, 1969

…- — – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Walston &Co. —–Inc —– Members New York Stock Exchange and Other Principal Stock dnd Commodity Exchanges OVER 10C OA51 TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 11, 1069 Wl111e It would be an overstatement to descrtbe the stock market's performance of the last couple of weeks as impresslve, an objectlve observer would have to term lt at least mildly encouraging. If the patient can surVlve I blt longer wIthout a serious relapse, lt may well be posslble io sav thai recovery IS assured. Actually, 1he market's 1w1'VioJ smc(, 1he cebruary low has been fairly Iypieal. The move to em in'ra-day peak of fJ42. 21 on 111e i)ow at 1he end of M,H'ch W3S about the best that could be expected ('onslc!e,'mg the small base 1hat hJd bcen built. The decline by the 1l1cease In ,'eBervl' cclrried back to the 020 support level, and the recoverv to' an ll1tl'J. – clay 'peed, oj !J4-1c-28-on-'JaIll sday-hab. easeJLthe,-…. enilre 10S8. In 1he pI'OCCSS, 1he downtrend in effect 8111ce Ikeember has been fairly dec1si vely violated. The longer the market can remam firm, the stronger posltion we will be in. Thirty- one trachng days have now passed slI1ce thc February low, whlch is close to the limit of the permlsslbL, tune perIOd for a short-1erm rally In the context of a larger downtrend. (Since 1962 no such rally hds hlsted morc Ihan 16 days) Continued abllity to move to new 11lghs would thus have to be consldercd conslructlve. lVleanwllile, we relterate our theSIS Illat proper polley conSIsts of restricting in- vestnlent to stocks of stabillty and quallty. Not only wlll such mvestments provide down- slde protection, but In 1.l1e present market pholse they are likely to be ihe leaders lf a move toward the olel highs gets under way shortly. One such company is revIewed below. JEWEL COMPANIES (47 1/2). .. !\llthat glitters g6l , bu1 there would seet'l to he a good deal of golden potentJal m the ewel Companies. Investors should fmd much to smt thelr particular II &11sis'1n A-quality s10ck, both from the capltal appreclatIon and &I-income aspects. Tn recent years, .Iewel has m the grocery ch'a;; I;dustry. 1'h;- if l de e of aggresslveness not common the fact tllat sales 11ave more \;n and now are approachll1g Ille 1. 5 blllion mark. Better tl . n 75 btrsine ss denves from operations of lts 370-unit supermarket chain '1 'l15;fibm 133 drug stores and/ or drug departments, 76 bakerY-lce cre ! 2,000 home serVlce food and general merchandIse rouies, 9 self-servi d stores and overseas ll1terests. Additional expansion is slated for ihe year with 26 supermarkets, 22 drug stores, 35 conve- nience stores and betgn 15 LInd 20 other type shops planned to be opened. One of the very few grocery chams to go JJ1ternational, Jewel tOday holds a 17 mterest in a Belgian supermarket and department store chain, l!Jo/n in a cham of Belgian discount stores and 49 in an Itahan supermarket chain. The first dlvIdend was received from overseas mterests tIns past year. All this recent actJvlty has been reflected in earnings. For the fiscal year ended January 31, 1969, net rose to a record 3.01 a share, from 2.64 the previous year. In the current year, industry sources expect earnings to approximate 3.35 a share. In VIew of the improvmg earmngs, cash diVIdends were raised last September to a 1. 40 a share annual rate. Thls now affords a return apprOXImating 3, somewhat less than the average return for the last fifteen years. In view oftncreasing casb-dividends fromoverseas interests and rising earnings, furtber improvement in the diVidend payout rate during tbe current year would not be unexpected. Techmcally, the base bmlt over the last SlX years suggests an imtial price obJective near 68, followed by a higher goal readable at 80. Good support exists in the 45-42 area. Added to the Quality and Long-Term Growth section of our Recommended Llst this past January, Jewel Companies agam is suggested for purchase. Dow-Jones Ind, 933.46 Dow-Jones Rails 239.48 W. TABELL WALSTON & CO. INC. AWTamb ,,'Ih, IUlllk,j I,ll., I'! 1'1I1,I1-.h,,1 f, ''''II ,,,\,nl''' 11101 ,,,r'tl''' .011 I t ,ltI .,ff . ,II ' , ..,,1'\,111' tn I,,,, Ill' UII', ,h,,'u….,, 'In. 11'- 10,111,\,,,,,,, … 1,1,,,,,,, fl''' \1,,,,-., \,,1'1 ,,, I 1,1,101, 1'111, 01, t g-II, d 1- \\,011,, ,\ I, 'lI' ,dt-. m .., dll,lOJ .. III Illl\ h'l ,Ill ' 11 plIl,hl' ,,,01 .,,1\ 'h, 'Ii'\ 1 .. 11,, ht'l1 WN30! , . – -.