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I- –,'q;,;,,,, lCi';; F,',,,-, Wolston.Hofflnon &- Goodwin C, ,, –1'f'''/ ,'' ';,z l' , , '- o'neu (Jkc ; f ' fi, If NEW YORK 5, N. Y. PHILADELPHIA 2, PA. LOS ANGELES 13, CALIf SAN fRANCISCO 4, CALIF. ff,.' t.,,1 35 Wall Street !;; D'GBY '.'1, 1420 Walnut Sheet ''977PENNYPACKER 550 South Spring Street '32MADISON 265 Montgomery Street sum. '.27 IX) TABELL'S MARKET LETTER c,' .), – 7 'J- p The market continues to hold in a narrow trading range. For the iCfourteen trading days from February 2nd to February 18th, the industrial fvaverage held in a range between 257.06 and 250.66. Since that time, a , imatitlerhof nhine tradiing days, it has held between 254.47 and 248.78. The I,,ra s ave a d a s mi lar pattern with the exception that they reacted be- ''', ll',low last week's low of 85.58 to reach a new low at 84.12 while the indus- , F19,t0r.i8a2l average high in held above its comparable low. the rails has been much greater Also the decline percentagewise. from the All of this tk ' ';action has been accompanied by slowly decreasing volume. Today' s volume t;(j1'','ofwou1l,d56n0oA,t00be0xrepasehkcaot rueitstowtfoatshceaarn2rey5w7v-2leo4rwy9 for several months. trading area could occur far in either direction. shortly but The technical ' , (Ipattern suggests that an upside breakout might carry to 260-262 and a ,', i' downSide breakout would meet support at 240-236. My work favors the possi- \' t'bility of a downside breakout. ;; i';;' I have continually stressed the diverse patterns of individual ;,' )',' groups and issues. While many stocks have advanced sharply and have !;,reached their upside objectives and appear vulnerable, there are other 1.;'situations that have had little price advance and still appear to be , If;'building potential base patterns. While these groups may not move imme- \', idiately, they should be in a much better defensive position in the event (of a general market decline. l' i;', One such group is the motion pictures. This group has done little Vimarketwise for five years. Recently, the fear of television competition ihas held this group near its five-year lows and substantially below the ril946 highs as illustrated below II I'! Recent Price 1946 High ,'\', 'hi,-, Columbia Pictures 14 36 3/4 II I' Loew's /, ,./ L , Twentieth-Century Fox Universal Warner Bros. 18 23 11 12 41 63 7/8 49 7/8 28 , i The picture does not appear as black as current prices indicate. ,, Undoubtedly, television will hurt the motion picture industry but most ;f.likely not as badly as the investing public believes. For example, all timoving picture companies own extensive libraries of old films that are r' amortized to 1. The re-issue of these films to televiSion could be ex- 1 treme ly profitab Ie. '; For example, Zenith Radio's commercial test of Phonevision in , !'Chicago recently indicated that if the results there could be approached L on a national scale by the ten million TV sets now in use throughout the country, these film inventories, now written down to nothing, could be ', worth millions of dollars. ,-;; In addition, most companies have improved their financial pOSition ;;, ' over the past few years. Columbia, as of June 30, 1950, had net current i',' ,'''assets per share, after all prior obligations, of 26.60 as against its , present price of around 14. Twentieth Century-Fox, as of the 1949 year- ',i' end, had a net current asset Also, most companies of 14.15 have very a share. favorable EPT bases because of ;,;;;, C ;;0. large earnings in the 1946-1949 period. Twentieth century-Fox earned an ) average of 5.68 for the best three of the four yearso Columbia Pictures .. i'' showed a comparable figure of 3.66. The technical formations of the group ;',,', are potentially favorable 0 Long base patterns have been built up and while , ', they have not been penetrated upside, the ultimate objectives indicate the ;;';,' j; possibility of substantially higher levels. Three issues are on my ; recommended list. Twentieth Century-Fox (23) is paying a 2 annual dividend \ to yield over 8. The other two, Columbia Pictures (13 3/8) and Universal r'i(1L), are more speculative but have good appreciation possibilities. March 2, 1951 EDMUND W. TABELL ',, \ ;', flosing Averages WALSTON, HOFFMAN & GOODWIN ( Dow-Jones Industrials 253.61 ;; ;,',i, Dow-Jones Rails 86.26 , 711 Thll memorandum il not to b. conltrud al lin off.r or solicitation of offers to buy or sell any securities From time to time Wahto Hoffman I Goodwin mily ,,,, h.ve II. inl.r,!' In lome or ell of the securities m.ntlned her.in. The for'90in; mat.rial h.n bun prepared by III III a metter of Iformtion only. It is billlHd .'- , upon Informahon b,neved r,lIbl, but not nlunarll, compl'h, not ;uarant..d as accura', or finr, and is not intended to foreclosfI independenl inquiry .; F-./ /t,J;;;l/;.i'!,;;!'—;'F;l.e;',',,;t—' ',-.,./-'t'.;;.,..,.t. -r;;,– C,7(,-; ';.'.,.-t'!!;).,. '-.,.j;;'1-;'- -.,.' ;/'J-;'