Tabell’s Market Letter – February 16, 1962

Walston &Co. Inc !Ifembers New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CI-YCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 16, 1962 The market is feeling the effects of the overhead resistance centered between 72 and 740 in terms of the Dow-Jones Industrial Average. It is interesting to note that the intra-day high for the past seven days has been between 721 and 717. However, selectivity continues. Although there have been many more new highs than lows, two major steel companies, U. S. Steel and Armco, reached new bottoms dud the past week. At the same time, many stocks on our recommended list reached new hig s including Beaunit Mills, Cluett Peabody, Ex- Cell-O, International Minerals & Chemical, 'Jewmont Mining, Schlumberger (formerly Daystrom) and J. P. Stevens. Consolidation CoaL.. wbicQ also high is reviewed belo.!. In addition, we are adding J. Ra,y. McDermott to our list. It wili 'bereviE;wed-Shortly. . – -v' CONSOLIDATION COAL COMPANY Current Price Current Dividend Current Yield 46 1. 40 3. 00/0 Long-Term Debt Common Stock 18,300,747 9,081,839 shs. Sales, 1961 Est. 230,000,000 Earned Per Sh., 1961 Est. 2.00 Market Range 1962-57 461/2 – 27 On November 20, 1961, Consolidation Coal Company shareholders approved amend ments to the company's articles of incorpor tion widely broadening its powers to make long-term investments outside the coal area. The reasons for this amendment were succinctly explained in the proxy statement whi stated that, basically, a coal mining company…. is a self-liquidating enterprise…. To continue in (the coal) business, cash gene rated by depleting coal reserves must normally be used maintain existing properties, and to develop new ones. e additional reserves, t c pany pointed out, ho ever, Consolidation's reserves are n,ow quite 0 t k c e . nticipated produc ion during the foreseeable future. It lS, therefore, 1 e c s mterest to use the ConsolldatlOn lS ln an and, to nake new investments . ties, WhlCh lnclude some 0 t 0 11 .uer. . bo broaden its operations in the co 1 American business. Its coal proper best maintained in the country, have past four years e te d ' stry-wide production, plus an additional cash flow from depreciatio d et' mounting to 1. 77 a share in Uj60. A large part of this cash flow is not re ire maintenance of coal properties, and under the broadened e used for expansion both in and out of the coal field. Financial position is unusua strong with current assets exceeding all liabilities by some 82 million. In addition, the company has investments of some 40 million at book value, probably worth a good 10 million more at market. The following projects, all fairly recently announced, give some indication of the direction in which the company might mo (1) A merger with Truax-Traer Coal Company on a share-for-share basis has been proposed. This will increase pro-forma earnings sliGhtly and give Consolidation access to attractive mid- V. estern markets. Upon completion of the merger, Consoli- dation's dividend will be raised to 1. 60. (2) The company is cooperating with Texas Easto;rn Trans mission to build a pipe line from the Vi-est coa!. fields, transporting liquified coal to ti1e 'Jew York and Philadelphia areas. Appro-val by the State of Marylancris now 'tile 'only-obstacle In'-the- path of the construction of such a line. (3) It was recently announced that Consolidation has acquired a little over 10/0 of the stock of Chrysler Corp. Since George H. Love is Chairman of both companies, the Chrysler investment becomes rather interesting. (4) Mr. Love, late last year, said that Consolidation was studying about six companies as possible investments. In summary, excellent management, a strong balance sheet and large cash flow seem to indicate that Consolidation will be able to develop extensive new areas of profitability as time goes on. The stock, recently added to our recommended list at 43 7/8, is again suggested for purchase in investment accounts. Dow-Jones Ind. 716.46 Dow-,Tones Bails 149.04 ANTHONY W. TABELL WALSTON & CO. INC. ThIS market letter IS not. and under no IS to be contrucd nn offer to I'ell or R BobcitatlOn to buy Ilny BecuritIes referred to herem The informatIOn contnincil herem IS not guaranteed as to accuracy or completenese and the furnishmg thereof IS not, and under no clrcumemnces 18 to be com'trucd a', a representa tIon by Walston & Co., Inc All e,,presslons of opinIon arc suhJeet to without notice Walston & Co, Inc, and Officers. Dlrectors, Stockholders and Employees thereof, purchasc, sell and may ha\e an interest In the seeurit.eq mentioned herem Thi market Jettel' 1; intenrlcd and presented mel'ely as a general, mformnl commentary on day to day market news and not as a complete IlnaiYlls. Addlbonal information ith respect to any seCUtltlCs referred to herem ill be . . .. . ., \yN 301 .– r