Tabell’s Market Letter – April 18, 1958

NEW YORK W—-d–l-s–tlonnc–&—C-o. Members New Ymk Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER Fort Myers Beach, Florida, April 18,1958 Under the stimulus of a cut in the rediscount rate and a further lowering of requirements, the market was up sharply on Friday. The Dow-J ones Industrials reached of 450.75 and the Standard & Poor 500-Stock Index touched 42.87. Friday's strength been preceded by firmness in the rails on Thursday and the Dow-Jones Rail average ached an intra-week high of 111.05. So far, the Dow Industrials have continued to hold in a range bounded by the Fehrmlr and low of 459.77 and 434.04. The ultimate breakout from this range will determine direction of the next intermediate move. Upside objective would be 470-480 and down- side objective 425. The Standard & Poor 500-Stock average reached a new high and if fol- 45 Ability toreach a new'high-on'theDow-J one indicate 116. The theme that this letter has consistently stressed since last August – namely e advisability of switching from cyclical, heavy industry type stocks into the defensive consumer goods category – has proven profitable for the individual interested in capital tion over a six months or longer period. Most of the consumer goods issues are selling well above the 1957 highs and in many instances have reached all-time highs. Fur ore, technical and fundamental work would appear to indicate that this action will continue over the foreseeable future. It has been difficult for the average investor or trader to realize that the cum;unrrerl goods issues have appreciation possibilities. Memories are short, however, and it is that dairy stocks, bakeries, grocery chains, retail stores, liquors, containers, to- ccos, finance and soft drink issues were the leaders of the 1942 to 1946 advance. Of , the main reason for the advance at that time – obconsumer goods – es not exist today but the present fundamental bac),grou fo \hfiere t reasons favors consume r goods issues. Furthermore, most of ds ps are selling to- at much lower price/earnings ratios than the 6 tops. This does not to the foods, food chains and utilities &ei1'il higher pte ratios because ear-nings stabilityand-a-slowbut- ' ever, othe-r-soft goods is sues- – are not selling IC(lmlp,mlles, containers, tobac s evW– lOnS of 1946. Soft drinks, finance were selling at over twenty time s earnings in e 0 1 a below that ratio today. I still favor continued InolOlmg of select d sues despite the sharp advances of the past six Im'Dn1ths. Among the s s c . ue to favor are Current Price Indicated Div. Yield Ameri n Can Anchor Hocking Glass Container Corp. Carolina Power & Light Family Finance First National Stores Lily Tulip Cup Philip Morris United Biscuit Wilson & Co. 45 52 19 30 27 59 71 50 33 20 2.00 2.00 1.00 1.32 1.60 2.50 1.80 3.00 1. 60 1.00 4.4 3.8 5.3 4.4 5.9 4.2 2.5 6.0 4.8 5.0 not in the consumer or soft goods.category.'rother issues that appear should be accumulated for longer term holding include Current Price Indicated Div. Yield Hoffman Electronics International Min. & Chern. Pan-Amero World Air National Gypsum Raytheon Zenith Radio 26 28 14 47 26 74 1. 00 1. 60 .80 2.00 stock 2.50 3.8 5.7 5.7 4.8 3.4 EDMUND W TABEP, ThiS market letter IS not. and under no Clrcumstnnci!S IS to be as, an offer to 1iI\J.y to herem The informatIon ('untamed hel em 15 not (!unrllnt('((1 as to accuracy or completeneJs and the furnlshlllg therH)A'nUt;' Jh\'l-1inllePho tJ to be construed as, a representa tH.n b)' \\'nl'lton & Co, Inc All c(prCSSIOIlS of OlHnlon nre subject to chnnge Without notice & Co, Inc, flnd Officers, Dln'ctors. Stockholders and t,mploecs thereof, )lUrcha'lc, sell and mny hn\e an Interest In the 'lecUritH'S mentlonerl herem ThiS mflrket letter IS mtended and prcsented merely as a general, mrUl mal commcntm y nil .Iny to rillY mnrket news and not ns a complete analYSIS Additional mformntlon v.lth respect to any securities referred to herem Will he upon reQuest. \\ N 30l