Tabell’s Market Letter – January 16, 1970

Tabell’s Market Letter – January 16, 1970

Tabell's Market Letter - January 16, 1970
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W—-d–l-s-Itnocn—&–C-o. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 16, 1970 It would be difficult to imagine a market giving less clue as to future performance than last week's exhibition. The Dow gave up a bit more than 7 points, dropping to the 790 level on Monday and then drifted to 782.60 over the next four days. Volume figures on all five days were on the low side despite a late flurry of selling in glamour issues on Friday. The conventional wisdom would hold that the market is awaiting President Nixon's speech next week. Whether this is true or not is difficult to say. Most of the averages, for the moment at least, are holding above their December lows, and the next major clue as to the currents direction will be provided either by penetration of those lows or by ability to move ah-ead from arOu'i1d levelS. -. —- – -.– – – —'00- – -' Meanwhile, inspection of individual technical patterns reveals the usual goodly num- ber of favorably-situated issues which should be able to perform well in almost any kind of a market. We are, therefore, effective this week, adding six issues to our Recommended List. To the Quality & Long-Term Growth section of the list we are adding two companies in the food processing field – Kellogg Company and Campbell Soup. KELLOGG (40 1/2) accounts for more than 40 of the domestic output of ready-to-eat cereals, and the product mix was recently broadened by the 1969 purchase of Salada Foods, Ltd., a large Canadian food processor. Kellogg's long-term earnings record has been one of amazingly steady growth with earnings having increased quarter by quarter since mid-1959, and with nine dividend increases having taken place over the period. 1970 earnings should continue the trend with a good improvement over estimated 2. 50 The earnings growth pattern of CAMPBELL UP ( 5) a bit more erratic with results for the year ended last July unfavorabl f t a weeks' strike. Size- able recovery was seen in the October quarter of fisc ear, and an increase to the 1. 90 level for the year to end July -. 1 ,–.-.re three familiar consumer .-, names – Loew's Corporation, Rhein d Pll-ti and Singer Company. With the incli.l– sion of Lorillard, LOEW'S ( i interesting company. Three- made by hotel, the t n perations. With the full-year inclusion of Lorillard, earnings could sho . ver the 1. 83 shown in the year ended August,1969. It should be noted that, nt re part from the operating picture, the company held securities with a market value of .00 per Loew's share as of August, 1969. RHEINGOLD 3/4) is the eleventh largest brewery in the United States and the largest independent Pepsi Cola bottler in the world. New management has achieved a dra- matic turn-around since a deficit of 7t; was reported in 1967, and earnings have recovered to 1.42 in 1968, and an estimated 1. 70 this year. For 1970, results of 2.25 would ap- pear to be a' possibility. Thus, at present levels, the stock is selling at a sharp discqunt from other brewing issues, many of which command multiples of over 20 times estimated 1970 earnings. ..r.L – – R. SINGER COMPANY (82 1/2), in addition to its familiar sewing machines, has been materially changed by its merger with General Precision Equipment Company, and other diversification moves. The company has almost 2 billions of sales divided between con- sumer products, office equipment industrial products, military hardware and education and training. The company is expected to earn 4.90 for 1969 vs. 4.53 in the prior year, and should improve upon those results substantially in 1970. In the Speculative Price Appreciation section of the list we are adding AMERICAN PETROFINA (34 1/4) This company, controlled by Petrofina, S. A. of Belgium, is an integrated oil company with important petro-chemical interests distributing its output through some 3400 Fina stations in 17 Middle and South West states. A number of expansion moves have been undertaken of late and the company should be able to improve its estimated 1969 earnings of 2.70 to 3.05 or better in 1970. Under these conditions, the conservative mul- tiple on the stock could well improve substantially. All of the above stocks will be reviewed in greater detail in subsequent issues of this letter. Dow-Jones Ind. 782.60 Dow-.Tones Trans. 173.39 ANTHONY W. TABELL WALSTON & CO. INC. ThlS market l'ltci IS fOJ your onvcnH.'nre .Inl \nfonm,'hon Ind 1'1 not .In off…, to sell 01 n formation oLl,lIned flom MlUIC'- We whn't tu be ,I.IIlI. hut v., do nt)l gu.lr.tnlee Its AWTamOcmc!Qy('('s ml1 have an IlItCt('at In or !urlhase .Intl MOil the lef,,!rt',1 to heleln tn huy lin) .,r'UI,tws The Walo;ton R. Co, In(' .Ind Il, officer!. dllcctors or WN-301

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