Tabell’s Market Letter – June 08, 1984

TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 June 8. 1984 We noted last week that the market's behavior on May 30 was consistent with a reversal at- temQ,t,and!1,Ub.!l!lH uentactiQnhas .'1Ot. b.e.incongruent -l,tlf,t,l,,.coe .Dowmovedup .promptly …..,. to a level 'just under the '1130-1180 area. from which it had broken'down'in early May. Predictably. it stalled at that point. but spent most of the week in a continued attack on that level. Ability to move deeply into the supply area would have to be construed as bullish. Our feeling throughout the year has been that a bottom attempt would be made in early sum- mer. Given our orientation, this feeling has been based largely on technical factors. but we think it is also supported by elementary fundamentals. The following table outlines earnings data for the 30 Dow stocks. including their consensus estimated earnings for 1984 and actual results for the 12 months ended March and for the year 1983. PIE ratios. based on June 6 prices. are also given for the latest two periods. ' ESTIMATED TWELVE MONTHS YEAR STOet. —————- 1llCd Corp (11 lJmlnlJm Co AlTier Hli,ellC2f1 Br3nds ColIllerlC3n C2f1 jln;J It.an EPI'I2'5S .l1'lCrlt..311 Tcl&Tel J'ethlehem St.l !!'J f'ont f l; t !Ildn I\odalo' ,on Co rF IJf'rle 3 I-t-ec o FULL YEAR 1984 ————– PRICE PIE 6/6/83 EAF.NS RA TI 0 —— —— —— 50.81 5.29 9,61 34.75 5.13 6.77 55.88 7.67 7.28 44.00 4,80 9.17 8.00 .80 10OO 15.13 1.57 9.63 0.b3 !.70 7.64 47.75 6.21 7.69 t.6.38 6.03 11.01 40.10 6.25 6.48 53.25 5.14 10.36' ENDED MARCH 1984 —————f'/E –EARNS RTIO —— — .. 0,44 115.18 3.42 10.16 6.95 8.04 3.53 1.46 75 10.J 8 4.36 3.47 -0.06 0.00 5.40 8.84 4.06 16.35 6.32 6 .41 4.59 11.60 1983 E.RNS -0.36 2.03 6.76 3.4.' 3,41 C 03 -8.77 4. l) 3.11 5.79 5.39 G(i,'ne'I'al Ioods b('neI'al Motor's rnDofJ'ea r 1 re L t d! I I ( . O I- M I rl t 1 Har/ester 53.50 64.50 25.00 11.00 105.75 6.50 6.67 17.05 4.25 0.36 10.58 -1.51 8.02 3.78 5.88 30.56 10.00 0.00 6.10 14.87 3.25 -27 9.3Y -8.56 8.77 4.34 7.69 0.00 11 ,o 0.00 . 'I 11.84 2.71 -2.78 9.04 -11.56 I rd, 1 'a f'-.2 T' tlpr,r C IflC 50.13 89.5 5.64 8.89 6.78 13.16 4 -1'-) ,.I … 6.25 11.60 14.8 4. /.. 1 ''.10 f1l rlflo''O ta Mn!'! Ctwl-no. I I I I flC' –, roc. t,.r; T' & G.Jmble 76.50 34.,.,3 52.00 6.80 4.42 5.36 11.25 7.83 9.70 5.8l 2.95 5.34 13. 1,;) 11.7'l 9.74 …C ''-', .2. 18 5.33 tSlB I'S Roebucy d 011 of Cel Tf'acu Tnt. !Jr, on CiJr!..1lde 'JS Steed 1.1111 t ed rccrHlolo 31.13 37.50 34.63 54.13 26.88 6'1.63 4.56 5 .I-)' 5.24 6.84 4.93 8.84 6.83 7. t 3 6.61 7.91 5.45 7.31 3.93 '1.84 1.81 1.95 -9.33 8.23 7.92 7.75 7.20 27.7t 0.00 7.85 3.80 .). 65 4.80 115 -11.99 7.91 I,'- l..1-lshol.lie El JfJol \-10 r'th F W 44.75 35.13 3.05 14.,7 'L45 7.89 .,5.27 3.81 8.49 9 ')') 5.08 3.72 I!.I I A 1133.83 136.65 8.30 87.38 1.9 72.4; Although the Dow is now at a rather expensive 13 times its most recent earnings. the 1984 consensus estimate ca11s for an 88 increase over 1983. The average is now, therefore, at only 8.3 times those earnings. Estimated 1984 results are close to the all-time record. set.. in the third quarter of 1979. Now it must be admitted that, at precisely the time that record was being achieved, the Dow multiple was around 6.. and the Average sold in the 800's. Equally low multiples prevaIled at the lows of 1974 and. even further back. 111 1949. It continues to be our belief. however. that the 1982-83 move to new a11- time highs ushered in a new secular trend as far as prices were concerned. We suspect this is also true for investor confidence, as expressed by P IE ratios. We feel, therefore, that the current level appears reasonable and would not expect a third test of 1974-1979 PIE levels. AWTrs Dow-Jones Industrials (12 00 p. m.) 1128.23 S & P Composite (12 00 p.m.) 154.80 Cumulative Index (6/7/84) 1898.08 ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. No statement or expression of opln!on or any other maHer herein contained rs, 'or IS to be deemed to be directly or Indlrcclly, an offer or the solicllallon of an oHer to buy orsel! any SCC\.Irlty relerred to or mentioned The ma1ter Is presented meroty for the convenience of the subscriber While we believe the sourCes of our information to be reliable we to no way represent or guarantee the accuracy thereof nor of the statements made herein Any aclron to be taen by the subscnbe' should be based on hiS own investigation and Information Oelafmld, HaNey, Taben Inc, as a corporation and Its officers or employees, may now have, or nlay later talo;e, poSitions or trades In respect to any secufilies mentioned In thiS or any future Issue, and such position may be dillerent from any VieWS nowor hereafter eJlpressed In thiS or any other Issue Delafield HaNey Tabell Inc, whiCh IS reglstercdwlth the SEC as an mvestment advisor, may give advice lOlls Investment adVISOry and other customers Independentll 01 any statements made In thIS or In any olher Issue Further information on any securrty mentioned herein IS available on reQlJest