Tabell’s Market Letter – June 08, 1951

Tabell’s Market Letter – June 08, 1951

Tabell's Market Letter - June 08, 1951
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– …, ' —— !/ – OI StO'1 Hoffll1011 ..- Goodwl nV,,',!,,;'cw'Oi/!t,Jt!.'i;.-\!.-'-,-;'.'–''''''-'-.'-''''''-''''','l'rc, lIW1W1T4 ,'-..–!'''''–f';,;,b-'–,', ,,'-;.,'-',,,c,l,i'-,'-'0,',-,-;.0.1''';.'. &.t46;u-;z (!/;Men&ed l NEW YORK 5, N, Y PHILADELPHIA 2, PA LOS ANGELES 13, CALIF, SAN FRANCISCO 4, CALIF 1,,1; 35 Wall Street 1420 W.alnlJt Street 550 South Spring Strent 265 Montgomery Stroet l'; DIGBY 44141 PENNYPACKER 55977 MADISON '132 SUnER 12700 i I ,, , TABELL'S MARKET LEnER II I ltirh!Or;sebelieve ii oso ;ein !i;lan area bounded roug11y by 265 and 242 in the Dow industrials. Further time ,,may be spent in this area because a .great many individual issues have not ,'( ;;;;yet built up sufficient tops. However, the action of t1e market over the ;, w;next few weeks is not entirely clear. Ability of the industrials at the i ;'5weekts low of 244.91 to hold above the May 24th low of 241.89, is construct.;,' ;',live, and it is possible that we may witness a firm market for the next E !Jseveral weeks with ;;of 245-242. Would the use average periods moving between of strength to a high of liquidate 255-257 and unfavorable a low groups. S Zc i',l;ould employ periods of weakness to purchase iSSUeS with favorable patterns i ;,,,!such as those noted below. -' ;,;j BURROUGHS ADDING MACHINE is currently selling at 17 1/4. At the '0; i;'; indicated dividend rate of 90, the stock appears to 0 ifer excellent growth ,,' t,;1)OSSibilities. It has built up a very strong technical pattern. It has held j ,c'in the 13-17 range for over four years and the recent upside penetration in- tdicates much higher levels over the, longer term. Would add stock to ;3 trecommended list if available in the 16-15 price range. The company .;,s in 7fi. FHa position to benefit from either a war or peace economy. Burroughs' prin- -''; fi,;';(;ipal defense assignment is to make ilstruments fOl mUitary aircraft. It ;'' \,I,is also turning out precision parts for jet airra't engines. Among other ' tiitems in tooling stage is a computing mechanis, for radar-controllS!d anti- f'i,\aircraft defense equipment. The new management is 2xtremely progressive i1iacnOdUlid,t s rese over arch the depart longer ment term, i s o workng ffer 3ta on rtli ele ng ctronic possj'J i developme lities. In nts t adci hat ition to \)its growth potential, company has good defensive q.lalities. It has paid ;f'7;,(dyievairdlaelngodts' since 189'1. March 1951 quarter net expanded to 44! vs. 2! Our rteseartchh partner, Mr H i J SOhie1rb'lhas recleinttl'Y issue'd 6. an ;ljiexce en repor on i s company whi c h s ava a e t 0 c en s. ;i- ,c, 'B –e 1,;1), GRAY ;,'IANU.ACTURING, now Delling at 12 1/4 on the 'ew York Curo, ,,' ;V!is, in my opinion, an excellent vehicle for sizable percentage appreciation i fit'over the longer term. Earnir.gs for 1950 were 1.83 a share. rofit for fir'st; ,!q'.larter of 195I rose to 53! a share vs. 311 in similar 1950 period. Tte c(mi ;!;pany was incorporated in 1891 and until the erl;y 1;40s manufactured tele- iff (',; phone coin boxes. he company now ranks as one of the largest manufacturers '!!' i,!of dictating machines. The product is called udograph and is an elec trolic t' ,/i/ J1achine that is gaining wide favor in the business world. All of this gr011tt(' ;\;lhansatiboeneanl accomplished in 'the distribution. It is past four years 't1hen the company started now the second largest company in the fielC. ;; till fmraaryk has etwi a se t . least 5,COO,000 of defense orders. The stock has done It has held in the 7-14 rarge for over three years but little appears ;. ;/; i,ito be building a stronE; potential base pattern with a long-teLa pctential ot\ i25 to 30. Also, the stock appear's to Le in a good defensive r.Jsition and 1,,,iShOUld be bought. Although not on an actual quarterly dividenu basis, the ' /,)istock has paid 25 cen';s for the last three qU3.rters. On the basis Glf 1.)(' , !iidividend yearly, the stocl' would yield 8.1 at present prices. 'fhere are !U';ijonly 217,002 shares. BUCYRUS ERIE returns a generous yield of l' 6 based on the 1950 iidividend of 2.00 and the present price of 22. Becar,seof a strike froln ';' 'March to September in two plants, earnings dropped to 2. 80 i lS50 from , 1-'i4.07 in 1949, 3.54 in 1948, and 4.16 in 1947. The company s the weddls'j; !;,,; largest manufacturer of E.iCcavating machinery- and related equipment. It i ' 1',,, in a position to benefit from both a defense or a peace econc ,1Y and its ,I FfiPost-war plant expansion should enable it to avoU the sub-cntractin dcne ,, ), in World liar II. From a long term viewpoin';;, its foreign busO-ness, VlhlCh ,' ;';;!\jhas ranged as high as 38\, should offer laJ'ge profit possibilities. ,951 !;i earnings should approach 1949 levels as evidenced by the 99! earned L' the ; 1;1 first quarter. The stock has a favorable ';;echnical pattern. 't has he'd irt f!' l;,l a long tradinfS range between 14 and 24. A;, upside penetration I'Tould indi- 1 Il cate 30 followed by 36. There is gvod downSide support at 2(, -19. VlouU a d f I') to recommended list if that level is reached. ,,, Ijbune 8, 1951 EDf,ill';D ,J, TABELL i,o/I Dow-Jones Ind.Closing 250.39 WALS'l'ON, HOFFMAN '' GOODWIN ' I',; 0ow-Jones Rail Closing 80.03 ,'' II,! r , f)J Thi. m.mor.ndum i. lIot to b. constr\Md .I .In oHr or lohclf.tlon of off.,. 10 bur or HII IIInr Hcuriti.. from tim. to tim. Walston, Hoffmllln .. Goodwin mill, h….. u In'',,st in 10m. or l1li11 of Ih. McurHi.. m.ntlon,d h,r,ln, Th. for'90in9 mlllt,rial h.. b..n prepatlld b, UI al a matt of information onl, It II blllHd '0 i;;;;;;;;;R;!;;;;;;;;;i;;;u;,;;;;; ;i;;;;;7;-

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