–'j Walston &Co. MEMBERS NEW YORK STOCK eXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGElES SAN FRANCISCO LUGANO (Swdwl.,d I OFFICES COAST TO COAST CONNECTE'C BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER August 6, 1954 The market is entering a more 'speculative phase. The recent increased pace of trading and the erratic intra-day movements indicate that the specu- lative trading public has become increasingly active in the past few weeks. The skeptics who doubted that The Coming Advance in Common Stocks started in September are now becoming convinced (after a 36 advance in the indus- trial average in ten months – with some issues climbing over 100) that we are really in a bull market. The short term trading public is taking the ball away from the inves- tor. Some of the blue chip leaders of the advance have not reached new highs in several weeks. New faces have taken their places in the daily list of new , –hi-g-hs– Many of these issues are- of -secondaryand sometimes tertiary grade. This does not imply that the market is immediately vulnerable. This speculative phase has apparently just started andmay last for some time. vIhile some of the secondary issues are high enough,there are many others that still appear undervalued as compared to some of their higher grade neighbors. Also many of the lower grade issues have not yet reached the stage where they are overvalued. In fact, some of them have not yet even moved. Recent action,hawever, does indicate that both the investor and speculator should become increasingly selective in new purchases and be on watch for signs of an overspeculative condition. ' Ten montrs ago, many issues had a downside risk of 0 as compared with an upside potential of 50 or more. 'Now many issues have an upside potential of 10 as compared to a possible downside risk of 10 or 15. The odds today,after a ten-month advance, are not as favorable as they were in September or January, or even March or May. From a technical viewpoint, many issues have reached, or very near- ly reached, the upside objectives outlined by the 1951-1953 accumulation basps. However, very few have as yet built up vulnerable distribution tops. If this is going to occur, considerably more time will be needed in churning back and forth on heavy volume with stocks passing from the strong hands of investors into the weaker hands of short term traders. Quite some- f'lme wi 11-15eneeded- to comp-lete tnepatern- and&ample –wafn — ing signals should be given. The alternative pattern would be a resting or consolidation phase before the advance is resumed. There are many other issues that still indicate higher levels for both intermediate and longer term. It is possible that the intermediate objectives may be reached shortly followed by a prior consolidation phase before much higher long term objectives are eventually reached.In any e- vent,very few of these issues appear vulnerable except for normal tech- nical recessions. The overall picture still continues to look like the pattern out- lined in my article of July 8th.After some possible further strength the market should have a resting period for a considerable period of time. Just how much further the advance can continue in terms of the average is entirely problematical. At a level of 350,a ten-point advance or decline is only about 3.Strength in secondary issues could show little reflec- tion in the averages.In my opinion,the long term advance still has a long way to go. I still have a minimum 450 in mind with a possible 600 or high- er. But remember that the market has advanced almost a 100 points in ten months. A normal technical correction could carry the averages back to the 320-300 zone in the next few months. . The long term investor in growth stocks should not disturb his hold- – ings.The long term growth will continue.Some issues,however, appear high – enough for the moment. New commitments should be confined to groups behind themarket.Oils,on minor weakness,would fit into this category.The invest- or whose main objective is income should continue purchases in common stocks as funds are available.There is still a wide spread between stock and bond yields.The intermediate term trader for capital appreciation should forget the averages and concentrate on individual issues.Stocks 'should- ,be sold – as upsiCie obj ectives are reached and replaced by issues that appear undervalued.This requires patience but pays out in long run. The short term trader who is trying to scalp a few points will have the benefit of sharp moves in both directions in the present speculative phase. Good guessing to you! Your guess is just as good as mine. – EDMUND W. TABELL liJ,,LgTON lie GO. TIlls mcmorclndum IS not to be COI15trued as an .offer or sol,cltahorl 01 offers to buy or sell any sccurdiCS From time to I'me Wellston & Co, or 'lny fclrlner I thcf eof may hdve an Interest In some or all of the securltlls menltoned herein billed upon InfOrmdllon believed reliable but not necenorlly complete, II The foregOing malenal has been prepared not gUdrdnleed oll d((Urate or !moll, dnd bv not us as a Intended molller of ,n to foreclose foIrnmdeapeIonnenonl y 1t IS ,nquHy I

Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,tmldl OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER August 13,1954 The changing character of the market was emphasized by last week's action. Again, the leaders of the advance were the secondary stocks while the blue chip growth and investment issues rested. I expect this type of action to continue for quite some time. The market has definitely entered a more speculative phase. This should cause no immediate concern despite the fact that the market has risen for over ten months. The blue chip issues have so far outpaced the secondary and speculative group that a narrowing of the gap was a foreorda111ed c-on-clusion. – -Of c-ourse;,-a narrowing of the gap -cQuld — be brought about by a decline in the blue chips while the more speculative sectors of the market rested. But the better grade issues, while high enough, show no signs of distribution. It would appear that the pattern favors a resting period for the blue chips and a continued advancing phase for light blue chips and finally the low-priced issues. When the last phase is reached, the market will be really vulnerable. This letter has long been pointing out the undervaluation of many light blue chip issues. Some of these have already started to advance. American Potash, Babcock & Wilcox, Cornell Dubilier, Mead Corp., North American AViation, Penn-Dixie Cement and Sperry are examples. However, there are still quite a few that are still selling below their 1946 highs despite higher earnings and dividends. While the gap has been narrowed , it is still too wide. The low-priced speculative issues have fared even worse in the market advance. Many of them are still selling close to the lows of the past five years. In many cases, this action is justified by the facts, but there are also quite a few issues that are undervalued. The danger in the situation is that the uninformed speculator might start to buy issues regardless of quality just because they are – – -behind the market and loiit p-riced7This could eventluiny'result in a vurnerable pattern, but it appears that this situation does not prevail today. As time goes on, more and more selectivity and caution will be required, but we are entering a phase where the laggard issues could move quite rapidly. Several issues on our recommended list have reached price objectives and are being removed from the list. ALPHA PORTLAND CEMENT recommended at around 40, reached a high of 66 3/4. The upside objective was 65-75. Sellon strength. ALUMINIUM,LTD. has moved up from 45 to 74 3/4. Would accept profits on strength. gETHLEHEM STEEL has moved from a recommended level of 62 1/4 in April to a recent high of 82 1/2. The upside objective was 80-85. Ivould switch into Republic Steel or U. S. Steel which are still below their objectives. FOOD. MACHINERY has moved up from 34 to a recent high of 48 3/4. The upside objective was 45-49 so I would be inclined to take profits on strength. MEAD CORP. has advanced—from the 23-28 area –;'nd is now ntering the'39-43 upside objective area. SPERRY CORP. has advanced from a recommended level of 52 to 78 3/4.The long term pattern suggests an objective of 75-100. Would take profit on strength. As replacements for the issues above,suggest Crane & Co., Yale & Towne, Hewitt-Robins, or Pennsylvania Salt. EDMUND W. TABELL WALSTON & CO. TIlls memordndum 1\ not 10 be construed (1\ !In oHef or \oll(llal,on of oHer to buy 0' sell any \ecUflll5 From lIme 10 hme WIlon & Co or ny PMlner Ih of rIll h.,j,e II IlIlpr11 In lome or 'III of 'h U(urll,el mcnllored hereIn The loreqolng mdle!I1 MI\ been prep'ed by UI al a m!ltlcf of Inlormdhon 01'11) II IS b ''''0 UIlOn In' mMlon beeed rtll'lblc bul 1'101 nt'CUI!Iflly complete 1\ nol qU'I'lntcd as dccurate or Iln1 (lnd II not Interded to forcclole Indepcndent Inqul

Walston 5- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK . PHILADELPHI,A, LOS ANGELES 'SAN FRANCISCO LUGANO (Swit,ldl -,OFFICES COAST TO COAST CONNECHC BY DIRECT PRIVATE WIRE SYSTEM , TABELL'S MARKET LEnER August 20, 1954 The market has rallied back to the highs of late July with the Dow-Jones industrials during the past week at 352.27 as compared with 351.50 and the rails at 121.50 as compared with 121.01. However, many individual issues have moved sharply above thei,r earlier highs and probably an equal number are selling well below their earlier peaks. This type of action will continue. There are still no signs of impor- tant distributions, but many issues will rest while others take over. There are many issues amply priced, quite a few undervalued and very ..few-,,-vulnerahleo moreJ,hantheusllalt,echnicalcorr.e,ions . . ,- High Yield's, in good stocks are becoming increasingly difficult to find. However; there are a number of listed stocks of lesser known companies that are still available on an attractive yield basiS. The five stocks mentio'ned below are all listed on the New York Stock Exchange. They all yield 7 or better. They are all in a sound fi- nancial position. One has paid consecutive cash dividends for over five years, one for thirty-five years and three for over fifteen years. All have interesting technical patterns with a possibility of capital appreCiation over a period of time. While these stocks are not of high grade investment quality, they certainly can be classified asbusinessmen's risk. Their purchase is advised for those investors interested primarily in income but also desirous of some opportunity for long term capital enhancement. They are not trading issues in the popular sense of the' word. In most instances, six months earnings are below 1953 which accounts for the high yield but prospects favor some improvement in the second .half. , CITY PRODUCTS sells around 35 and pays 2.50 annually to yield 7.2. The company is the largest distributor of ice to railroads and'TeTrigerator l'in-es. 'It–operates 'dairieS 'if! Six scaLe;, uwn; five breweries, operates coal yards, bulk fuel oil stations, cold storage warehousesand has interests in oil and gas properties in Oklahoma and Kansas. Earnings have been relatively steady and have averaged around 3.90 annually since 1946. 1953 earnings were 3.09 and are expected to show relative'ly little change this year. Dividends have been paid since 1894. The stock sold at 44 1/2 in 1946. Since that time, the stock has held in the 34-25 area until it recently reached a new high at 35 3/4. 'I I i 1 I i ,I il J Ii it I, i ;' ….. ii' \ DeVILBISS CO. sells at around 21 and yields 7.1 on the 1.50 annual dividend. The company is a leading producer of industrial spraying systems used in applying paints and lacquers and other types of coating materials. Earnings were down last year to 2.46 but have averaged about 3 annually since 1946. Earnings for first six months were 1. 03 against 1. 53 in 1953. Sales have increased from 4.7 million in 1939 to 19.1 million in 1953. There is no funded debt and only 300,000 shares of common outstanding. Book value of common is over 38 per share and net working-capital is equal to over 25 a share. Dividends have been paid since 1918. The technica-,l,pa-ttern su— g-g-e-st–s… I ' ! t gh-.e – le L v el …. s overa…Qeriod ,. – oftime '– — LEES (JAMES) & SONS sells at around 25 and pays 2 to yield 8. It has shown relatively steady earnings considering that it is in the volatile carpet industry. 90 of sales are in carpets and 10 in wool yarns. Earnings for 1953 were 3.76 and have ranged between 3.08 and 6.22 since 1946. Six months earnings for 1954 were 1.02 as against 1.93 in 1953. Dividends have been paid every year since 1895 with the exception of 1938. Financial POSition is sound with cash items at the year-end exceeding all current liabilities. The technical pattern is favorable and higher levels are indicated over the longer term. 01Th,\ mdy memOlo!lndum II not 10 be hdve dll ,nte'st ,n some construed or .!lit of ,,\ 'In oHer or loldal,on of offen to the iecur,hel menlloned here,n The buy or le 10,egol1')g l t i)rly lelcu, t let, m!te! ,n e i Ft nroimrep1mreI'd t t,m Wllton bY 1.31 o!I ma t u I dtd to & Co Uer loredc or ,n ue t .tn po!I,tner the'l'of ormdt,on ollly It II ,ndependent ,nQu,v b,.l\ld ,pon ,nl,mM,on be',elled reliable but nOI ntceullrdy complete, 's not gUClr!nleed as .!Iccuf,He or ,na, lin 'i nc ,n en ,111.,, ., … RAYBESTOS-MANHATTANsells at 43. and yields 7 on the 3 annual dividend which was covered-byearnihgsor5.35 in 1953. Earnings for first six months of 1954 are 1. 95 comparedwi'th 2.79 in 1953. Com- pany has a well diversified, ,output wit,h rp,lqcements a large portion of sales. The company manutactures automotive friction products, mechanical rubber goods ,and miscellaneous items ,such as asbestos textiles, fibrous glass and bowling balls. The Cassiar Asbestos Company was acquired in 1953. There is no funded debt and 628,100 shares of common. Finances have been consistently strong with cash items in excess of current liabilities. Dividends have been paid each year since incorporation in 1929. Stock has held in 36-48 range since 1951. An upside penetration would indicate a substan- tial advance . . . – . …..-, – — – –' .'- …..–. . -.-. —– – -..; – WAYNE KNITTING MILLS sells at 22 and yields-a-l1ttleover 9 on the 1.60 regular dividend plus the 401 extra paid in 1953. The company is one of the leading manufacturers of better quality full-fashioned hosiery for women. There is 454,000 of debt and 359,996 shares of common. Earnings have been steady since 1946 and have ranged between a high of 4.88 and 1953 earnings of 3.97. Earnings for the first six months of 1954 were 1.34 compared with 1.59 in 1953. Despite capital expenditures of 2,150,000 in the four years through 1953, working capital has increased. Cash items at the end of 1953 were almost double total current liabilities. The stock sold at 70 in 1946. Since 1947, it has held in a narrow trading area between 25 3/4 high and 16 1/2 low. An upside penetration would indicate substantially higher levels. – – —- EDMUND W. TABELL WALSTON & CO . — – – – — –.;-,-.-………;…..;..;- – – …… -.. —–,- ,', —-

—— Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw.twld) , OFFICES COAST TO COAST CONNECTHi BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER Jcugust 27, 1954 For the first time since the advance started in September,1953, the market, as measured by the averages, has become stalled in a wide trading area and has been unable to decisively penetrate the previous highs of al- most a month ago. Early Aug.High Mid-hug.Low Recant High 8/26/54 Low Dow-Jones Industrials 351.50 Dow-Jones Rails 121.16 33g.70 11595 352.27 121.51 341.10 115.26 A decisive penetration of either side of this traBing area will most likely furnish clues to the trend of the general market pattern over the next few l11onths., However, regar;(lless ofwhether.1;he final resul t-'-t.s- a fu;G.- ther advance or a corrective decline, the price movement will be extremely selective. i.s I have noted many times before, individJal issue's ha1(e ex- tremely diverse patterns that bear no relationship to a general market pat- tern. It is easy to envision Stock A selling 20 above present price,and Stock B selling 20 below present levels three months from now regardless of whether the industrial average is at 370 or 325. In recent weeks, the character of the market has changed. The blue chip leaders of the eleven-month advance have been resting and the advance has been carried forward by stocks of slightly lower quality. In many cases this has been because issues of this type have been undervalued as compared to the better quality investment equities. The market has not yet broadened out to the point where the out and out speculative stocks 'have advanced re- gardless of quality . ..n upside penetration of the recent trading area would imply that the trading public is again entering the market in a large way and the advance has further to go under the leadership of the more specu- lative groups. Il downside penetration of the recent trading area would simply mean that the market is undergoing a technical correction of the almost 100-point advance since September,1953. I doubt if it would be of any great lasting significance. While many issues appear high enough, only a few have built up more thanminoI' potential. di-s.t.ributio.lalpa tteL'u-s.. ,..How.ev.er.,,,, there-is -, enough of a potential top to indicate a possible decline to, roughly, the 325-315 area. Such a decline would, in my opinion, present an excellent buying opportunity. If the decline occurs and the market reaches 325-315, the subse- quent market pattern could take one of two courses. The first possibility would be action similar to that of the period between February 1946 and August 1946. It will be remembered that the mar- ket reached 207 in February and reacted to 183. This was followed by a new high of 213 in J,ugust, but the advance was extremely speculative in nature and was led by low quality issues while the leaders were under distribution. This resulted in the September, 1946 break to 160. If such action occurred in the present market, it would eventually mean a more severe decline at a later date. More constructive action would be the possible pattern outlined in my recent article,Stock Market at Mid-Year–Coming Pause That Refrshes. The concluding paragraphs said – In conclusion, I do not believe that the mar- ket is vulnerable to a sharp decline despite the rapid advance we have wit- nessed over the past nine months. I do believe, however, that some pause or consolidation is needed and that the straight line advance in the averages will be replaced by a wide trading area in which individual issues will show extreme -selectiv.ity. I would expect -that for .the next-6 -to 18 months the Dow-Jones industrial average will hold in an area bounded roughly by 350 and 300. During this period, many issues could continue their advance while others consolidate and form re-accumulation areas. This in no way changes my thoughts that the market is in a long-term advancing phase.From a technical approach, there seems little likelihood of a major decline in stock prices in 1954. For the long-term investor, I advise retention of ccrrmon stock equities that will ultimately benefit from the continued long- term growth of the country. ThiS, as always, will require careful selection not only as to quality but as to price level. After the consolidating pe- ried has been completed, I expect a renewal of the advance with an ultimate objective, in about 1960,of 450 to 500 under normal market conditions and 600 or higher in a period of speculative excess. EDMUND 111. TABELL if., .. mmO'dndum IS not to be conued , In offer or soliCItat,on of oHers to buy or ell … ny securitIes From lime lJ…QN &&op.y iarlner,jnl',ol m … y 'Ive an ,nlue,t ,n ..orne or lilt 01 b,'led upon ,nformdt,on beloeyed reliable tbhet securitIes mentioned here,n not neceuaroly complete, IS llle toreqo,nq m … ttr'41 has b!en prepMed nol qUl'anlced as accurate or l,n1ll, and, 's by net us /II a malle' 0 tn o,ml .on on y ,\ ,ntended to iO'etlo\e ,ndepl'ndent ,nou,v

Walston &Co. MEMBERS NEW YORI STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN fRANCISCO LUGANO ISw,'wld) OffiCES COAST TO COAST CONNECTEJ BY DIRECT PRIVATE WIRE SYSTEM TAB ELL'S MARKET LEnER September 3, 1954 Both averages broke belovi the early August lows and, for the first time since the intermediate term advance started in September, 1953, have established an intermediate downtrend. The Dow-Jones industrials reached a low of 333.21 as compared with an early August low of 338.70 and the rails reacted to 111.40 as compared with a previous low of 115.95. The lows were reached on 'Tuesday and since that time the market has recovered a good por- tion of the losses. At Thursday's high of 342.76, the industrials had re- gained just about half of 19.08 points decline from the August high of 352.27. A full two-thirds recovery'would bring the average back to 345.93. What is the significance of the past week's decline and what are the – chane'es that-the low -Sf the move 'has already been reached 'iit 333.21 The market has been in an intermediate term uptrend for almost a year without even a 5 correction. This was unusual. We have been in a ma- jor uptrend in the averages since 1949, during which period the industrial average advanced 120 from 160 to 352. Despite this major uptrend, the average had nine corrections of 5 or more from 1949 through 1953.The most severe was the Korean break in 1950 when the industrials declined 15. There were two declines of 9 and 8 in 1951 and t'hree in 1952. One of these was only 5 and was the mildest of the nine. The other two were 6 and 7. There were three in 1953 ranging from 7 to 10. The decline from the August high of 352.27 to the recent low was equal to 5.4. If the low was reached at that point, the present decline would rank with the mildest of the nine previous corrections. A 15 cor- rection would be equivalent to a decline to 300. An average of the nine previous declines is 8 which would bring the averages down to about 325. On my technical work, the first support point is 330 followed by a very strong support zone at 325-315. Regardless of whether the average has reached its low at 333 or whether it will work somewhat lower, the main thing that my technical work shows is that the present decline is merely an overdue correction of an eleven-fith aaVafi nf iilm6st 100 paints. This is not the start of a -major aec-line like 1946 'or 1937, but merely the-'tenth corr'ective- react- — .. ion in a major advance that started in 1949 and still has further to go. However, any discussion of the averages is purely academic. The action of individual issues is the important thing to watch. At the week's lOWS, many stocks appeared to be at or very closely approaching important support and buying areas. This is particularly true of the issues in my recommended list. Space does not allow me to reprint the issues in the list but they were all reviewed a month or so ago. They are 'again recommended for new purchase at or around the week's lows. In next week's \ letter, I will start an alphabetical review of the entire list. A few might be mentioned, however, as being particularly attractive at around the week's lows. They are American Potash B (55t), Blaw-Knox (22t), Cornell Dubilier (27), Idaho Power \51), Pan-American (13 l/e), Robertshaw Fulton (25 T/e), Union Oil(45), United Fruit (4Yale & Towne (44i), A number of other issues are showing excellent technical action and should be added to the recommended list during periods of weakness. Aluminium,Ltd. was formerly part of the recommended list, but profit-taking was suggested at around the high of 74 3/8. It reacted to 64t during the week knd was near the 62-60 area where repurchase is suggested. Arm Steel reacted from 51 7/8 to 46 1/8. Hould add to holdings in the 46-43 range. Cities Service has declined from 106 7/8 to 95 1/4. Purchase is suggested in the 95 90 area. DOW-Chemical at 39 1/4 Hi down from 44 1/4.- Hould add to the list at 38-37. Dresser Industries reached a low of 29 1/8, down from 32 5/8. The 30-28 area is a buying range. General Electric .,ould be in a buying range at 39-36 for long term growth. Hooker Electro-Chemical at 74 was near the 72-67 buying range. Kaise Aluminum should be bought if the 33 1/4 low is reached again. As a low-priced speculation, Ravtheon should be bought around the week's low of 12 5/8, down from a high of 15 1/4. Harren Petroleum reached 35 1/2, down from 40 3/8. It is in a buying range at 36-35. Visking Corp. reached a buying point at 62. Western Union has formed a very strong technical pattern. At the week's 10Vi of 50, down from 55 5/8, it was at the 50-48 buying range. EDMUND 1;). TABELL WALS'l'ON & CO.

I .. Walston &- Co. -' MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADelPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw ..d) OfFICES COAST TO COAST CONNECTE BY' DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER September 10, 1954 Despite the low volume, the advance from the 333.21 low established in the latter part of August has been quite impressive. The Dow Industrial Average has regained more than the normal one-third to two-thirds retrace- ment of the previous decline. It would seem that the next correction should hold above the lows of late August. However, as reiterated so many times before, the action of individual issues will be quite diverse. I visualize a Wide trading area over the near future with selective strength in the secondary issues and in the more specu lative stocks, and a further resting period for most of the higher grade ,share — … –….o; ,- ,,……… …–.-. Periods of market weakness should be used to add to holdings in recommended issues. Recent action tends toward the conclusion that the 335-330 area will be a strong support zone. It might be appropriate at this stage of the market pattern to revie the technical background of a portion of the issues in my recommended list. The balance of the list will follow next week. ABBOTT LABORATORIES (46) Appears to be slowly forming base in broad 40-49 area. There is strong support at 40-39. Ability to reach 50 would indicate 59-63,but there is supply at 50-55 that might slow action. ALLEGHENY LUDLUM S'I'EEL (35) Stock appears to be building a strong potential base in 26-39 area. Present upside potential is 45-60. There is supply at 38-42 that may slow action. ALLIED STORES (47) The upside penetration of the long 36-41 base indicates 55-65. Recent high was 48. Buy on moderate declines. There is support at 45- ALLIS CHALMERS (63) The stock has been in a slow uptrend channel since 1949. Present outer limits are 56 and 69. Recent high was 67. Buy on minor price declines. The long term objective is 90. AMERICAN POTASH & CHEMICAL B (58) This issue has a very bullish long term potential. The first objective appears to be 75-90 followed by a possible loB-lIB. Recent high was 61. Buy on all minor price declines. AMERICAN RADIi,TOR (191 The upslde- p-enetration oTtlfeeightyear.c61dbase – at 12-17 indicates an intermediate term 27 followed by a long term 40. There is temporary supply at 20-22 that may slow any advance. There is support at 17-16. Recent high was 20. AMERICAN TELEPHONE & TELEGR'PH (172) The intermediate term indication is 171-179 followed by a long term 200. There is support at 170-165. Recent high was 175. AMERICAN VISCOSE (36) Appears to be forming a base in the broad 31-39 ngel' More time and patience may be required. Present upside potential is 52-57, but pattern may broaden. BABCCCK & vnLCOX (59) The long term upside objective is 75-Bo. Nearer term objective was 61-65. Recent high was 65. Stock held in 65-59 range. Down- side penetration indicates 53-50 where stock should be bought. BLACK & DECKER (47) The upside penetration of the long 40-32 range indicates 45-51, followed by a long term 70-Bo. Recent high was 50. There is support at 45-43 where stock should be bought. BLAH-KNOX (23) Stock has formed a very strong base with an upside potential of an initial 30-35 followed by a long term 45-50. fiction so far has been slow but, from a technical viewpoint, this issue appears to be outstandinglY attractive. Recent high was 25. There is downside support at 21-20. BUCYRUS ERIE (30) Pattern is irregular but the long termindication is -33- 38 followe'd-by possible 42-44. There i-s -downside support at- 2B-27 . BURROUGHS (21) The-upside penetration of the long 13-lB range indicates 34-37 for longer term. Buy on moderate declines. Recent high was 22. There is support at 20-18. CELOTEX CORP. (22) Stock formed a strong base pattern in 14-21 range. The upside penetration indicates 29-31 followed by 3B. Recent high was 24. Buy on dips. There is support at 21-19. CERTAIN-TEED (19) Stock has built a strong base in broad 12-lB area. Upside penetration indicates 2B followed by a long term 38-41. Buy on price dips. There is support at 18. CHAIN BELT (41) Long term indication is 65-Bo. Near term indication is 41. Recent high was 42. Buy on moderate declines. There is support at 36-34. Tho, m4Y memor4ndum '5 l'Iot 10 be hot, an .nterest ,n some conlirUld or all of ,III an off.r or 01,(11,,1;01'1 of off,n to buy or 5.11 any 5e(;urot,el from time to ',me the l,cufll.u mentioned her'!n The fOfeQOlng mal,rial hal been prepared b, UI Wailion & Co; 0111 a matter 0 o.nrfoarnmya fartn., Ion on ,Ih.r,o!. y IS bled upon ,nrormahon belieed tell1ble blolt not necflarl1y complete, II not gU1fanteed U .(CloIr.t, or final, and II not intended to toredole ,ndependent InquirY .. ; , I , .( ..- ' -2- COMBUSTION ENGINEERING (52) Long term upside objective is 65-80. Near term objective is 52-60. Recent high was 58. Buy on dips. There is downside support at 50-47. CORNELL DUBILIER (27) Stock reached its first upside objective at early 1954 high of 32. Long term objective is 41. Has held in 27-31 area. An up- side penetration would indicate 35. There is downside support at 27-25. CRANE & CO (36) Stock has held in broad 2242 area for eight years with most of the time spent in 29-40 range. The minimum upside potential is – 5'761 with a-possIbl'e 'Il1aximumf-an-advanc;e-to-75-95-are-a7More-timeffiay -., be spent in this broad accumulation area but stock appears to be an out- standing vehicle for long term holding. The nearer term objective appears to be a possible 41-45. There is support at 31-28. DRESSER INDUST .. (31) Stock has penetrated the heavy overhead supply at 24-26 to reach a high of 32. The upside objective appears to be 44 followed by a possible 60-70. Buy on all dips. There is support at 27. EAGLE PICHER (24) Stock has held in 18-23 range for over two years. Upside potential is 25-29. Recent high was 26. The upside implications of the broad 15-27 area in which the stock has held since 1946 would be 40-45. ELLIOTT CO. (27) The long term indication is 50-60 but recent action has been poor. May be forming an intermediate term base in the 22-27 area. The upside penetration indicates 35-38 but action may be slow. There is support at 24. EL PASO NATURAL GAS (40) The upside penetration of the long 30-38 range indicates an advance to 49-51. Recent high was 43. There is support at 37-35. FLINTKOTE (32) Stock held in 22-33 area for five years. The upside pene- tration indicates 41-45 followed by 54-58. There is downside support at 30. FRUEHAUF TRAILER (27) Stock has held in 22-27 area since 1952. Upside pene- tration indicates 36-42. Recent high was 30. There is downside support at 27–25. ,-. – – – -.- , – — -; —,— ….— GENERAL RAILWAY SIGNAL (31) Stock held in 25-31 area. The upside- penetration would indicate 37-40 followed by a later 45, but there is heavy sup- ply at 32-36 that will slow action. Recent high was 34. GLIDDEN COMPANY (38) Stock reached both its downside objective and a strong support level at the 1953 low of 28. A base was formed in the broad 28-38 range. Upside penetration indicates 47-50. There is support at 38-35. !. GULF, MOBILE & OHIO (33) The upside penetration of the 27-31 range indi- cates 40-45. There is supply at 33-37 that may slow action. There is sup- port at 31-29. Recent high was 35. HEWITT-ROBINS (31) The upside penetration of the long 14-29 range indi- cates 53-58. Buy on all minor dips. There is support at 30-27. IDAHO POVIER (50) Stock has a very strong base pattern with an ultimate objective of 68. 1954 high was 57. Buy on minor declines. There is sup- port at 52-49. INDUSTRIAL RAYON (46) The upside penetration of the 39-45 base indicates an advance to 58–63. There is support at 45-43. JOY MANUFACTURING (33) The eventual outlook is for higher price levelS, but there is no indication of any immediate move. Can be held for income. An upside breakout of the 30-40 range would indicate 55 followed by 75100, but 'thIs move app-e-ars far-off. A15llityto reach 37 would' oe a very constructive signal. KENNECOTT COPPER (83) The upside indication was 80-84. The recent high was 87. Time will be needed to form a new pattern. No immediate indication. A base may build up in the 75-80 area. Buy on weakness. LEHMAN CORP. (39) The upside penetration of the 32-36 range indicates 46-48, but there is supply at 39-40 that may slow down advance. There is support at 36. LOWENSTEIN (38) The upside penetration of the 31-35 range indicates an initial 45 followed by 53-61. There is support at 35-33. EDMUND W. TABELL WALSTON & CO.

r' c't'' – —, – – – – – – ——- – . -/' — . . —..- Walston &Co. MEMBERS NEW YORl( STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw,t,.,Id J OFFICES COAST TO COAST CONNECTfG BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET LEnER September 17,1954 The industrial average has moved into new high territory and the in- termediate term correction of the long term advance proved to be one of the mildest of the ten recorded since June 1949 and was completed in a very short time period with very little effect on individual securities. What the averages do from this point on is not particularly 'important. The entire advance that started in 1949 has been characterized by extreme . sele tizi ty. ,-;r.D.as–\,-ee,n.parJ.icularliYtrue,inthepas.t-4wo'.years '. -Thiis selectivity will, in my opinion, continue into the foreseeable future. A few issues have had excessive price advances and are in need of rest and consolidation. A few other issues are faced with a declining earnings trend and may do nothing marketwise or work lower. Outside of these two categories, there are plenty of issues that will show improved earnings, high dividend yields and appear to have a favorable business outlook. Issues of this type should move higher. Below is the continuation of the technical appraisal of the issues in my recommended list MINNESOTA POWER & LIGHT (24) The stock appears to be in a slow uptrend channel. The outer limits are now 27 and 21. MISSOURI-KANSAS-TEXAS,PFD. (760 The stock has held in the 58-70 range since mid-1952. The upside penetration indicates 88 followed by 104. There is support at 7067. MONTANA POWER CO. (36) The upside objective is 38-40. The recent high was 38. Time may be needed to form a new pattern. NATIONAL GYPSUM (34) The initial objective was 32-35, but the broad 15-23 base has an ultimate objective of 42-44 followed by a possible 50-54. Reached a recent high of 37. Has held in 37-33 area. An upside Pnetra- – tion would indicate 41-,42., —. NEW-YORK AIR BRAKE (,20)1he stock appears to be ,,, C-'. forming a potential base at 17-13-18 with a top at 23. An upside penetration would indicate 29 followed by a later 40-1,2. A dip below 17 would indicate 12. Action may be slow. PAN-AMERICAN WORLD AIRWAYS (14) Probably has the best term pattern of the airline group. Ability to penetrate 12 1/2 indicates, 17-19 followed by a long term 27-35. Recent high was 15. There is strong support at 13-12. PARKE DAVIS (33) The stock reached its downside obj ectiVea't the 1953 low of 31. Has held in the 31-37 range. An upside penetration would in- dicate 44-51. There is supply at 42-46 that will slow advance. There is support at 31-25. PENN-DIXIE CEMENT (51) The recent high was 56. The long term objective is 73-80. There is downside support at 50-47 where stock should be bought. PENNSYLVANIA SALT (46) The upside breakout of the long 41-46 range in- dicates an eventual 57-65. Recent high was 50. Buy on minor price dips. There is support at 44. PFIZER (CHAS.) (36) May be forming a head and shoulders base at 31-6-31 with a top at 38. An upside penetration would indicate 55-60. PITTSBURGH COKE & CHEMICAL (19) The top formed in 1951 indicated a dec line to tl!.20-16a.r.,a. 195! .low- was 18There isus-t,-ong support at . — -17-i6. May be forming a potential base in the 18-22 range. An upside penetration would indicate 25-30 where there is heavy overhead resist- ance. An interesting speculation. PUBLIC SERVICE OF COLORADO (41) The upside objective is an eventual 46. The recent high \/as 43. Time may be needed to form a new pattern. II n ,curili.. From time to lime Wo!Ililon & Co. or any partner thereof, 'IiTh may memoroltndum 1'1 not 10 be h…. an 'nterut ,n some construed or al\ of .1 on off.r or the securities sol,c,lat,on of o'f.,. to mentioned her.1ft The fbourye9or'ns9.. iii ,!ri' h,n bn prepared ma cc rate or final and by not UI o!I matter of ,nformation 01'11.,. It , ,.. ded to loreclole independent ,nqulry b,ned upon inlormtltlon beli.yed reliable bitt not I'I.CtIar,ly compl.'e, IS not 9uara u . ' o ,,..,,,,,,,,,,,,u,,,,,,.;;',.,.,r.-.n.,–m'-.r,nar.,………….,……- – – – ' – – – – -.'…..-.;.;' .. ., ; i '. ' -2-' PULLMAN (56) The upside penetration of the 5648 area indicates 69-76, but there is heavy supply all the way up ,which will slow action. The near term indication is 60-64. Recent high was 57. There is support at 51-48. '. RADIO CORP.OF AMERICA (34) The stock formed a very strong base in the 21-29 range. The objective is 34-36 followed by a later 43. Reached a high of 35. Has held in the 35-32 area. An upside penetration would indicate 41. There is support at 30. ' , 'REPUBLIC' STEEL-' (63)- The'upside potential appearS''to-be-7278The re'-'' – cent high was 64. There is downside support at 56. ROBERTSHAW FULTON (28) The upside penetration of the 15-21 range indi- cates 29 followed by 39-40. There is support at 25-23. Recent high was 29. ST. JOSEPH LEAD (40) The upside penetration of the 31-38 base indi- cates an objective of 47-50. Recent high was 41. There is support at 35. SHAMROCK OIL & GAS (49) The intermediate term indication is 50-56. The recent high was 51. The long term indication is 65-75. Has held in the 45-51 range. An upside penetration would indicate 58-60. A downside pene- tration would indicate a return to the strong '43-42 support level. SH1MONS COMPANY (35) The upside penetration of the 28-35 area indicates 47-52. There is some supply at 37-40 that may slow action. Recent high was 37. The long term indication is 70-80. Has held in 38-34 area. Up- side penetration would indicate 40-42. Downside would indicate 32-30 where stock should be bought. ' SYLVANIA ELECTRIC (37) The stock held in the 30-36 range since early 1953. The upside penetration indicates 41. Reached a high of 40. The long term potential is 60-64 followed by a possible 77-81. There is down- side support at 35-32. UNION BAG & PAPER (62) The stock has an irregular pattern but the upside Rpee'nceenttrat'ihotgnhowafs t he 63 39-50 —Buy onra-nmgoedeirnaXdei cates decl i 62-66 follo nes 'Tliere w-ised ' by sup pao-,iJl;aateC575080. UNION CARBIDE (81) The entire picture is one of a slowly rising trend punctuated by small trading plateaus. The recent high was 89. There is downside support at 77-75. A new pattern must be formed for a new up- side objective. UNION OIL OF CALIFORNIA (48) The upside penetration of the 36-45 range indicates 60-62 followed by a possible 70-76. Recent high was 50. Buy on all minor price declines. There is strong support at 45-43. UNITED FRUIT (50) The stock appears to be in the process of forming a slow base. The advance may be slow as there is heavy upside resistance. The potential base formed indicates 56-59 followed by 66-71. There is support at 46-42. UNITED STATES STEEL (56) The upside potential appears to be 60-70. Re- cent high was 56. Buy on dips. '. VICTOR CHEMICAL (33) The stock has broken out on the upside of the long 24-32 range. The first objective is 42-44 followed by a possible 48-52. The recent high was 35. There is support at 30. VISKING CORP. (64) The stock formed a long term head and shoulders bottom at 31-25-28. The upside penetration indicates a long term 95. There is support at 62-60. WESTERN AUTO SUPPLY (1!9J Despj.te the recent.. we.akness, .the.,.stockis still in a slow uptrend .There is heevy overhead'-supply and action may be slow. Upside potential for near term is 55-57. YALE & TOVINE (47) The initial upside obj ective was 49-52. Recent high was 49. Intermediate term pattern indicates 66 followed by a long term 80-90. Add to holdings on minor price declines. There is support at 43-40. EDMUND W. TABELL WALSTON & CO.

– -….——' – – – —;– Walston &- Co. – u MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw,'ml ..d) OffiCES COAST TO COAST CQNNECTE BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER September 24,1954 Since the first of th- -e year, I have issued special reports on ten stocks that I believed had both a strong technical pattern. and an interest- ing fundamental and statistical background. Another such issue is reviewed below. DRESSER INDUSTRIES Statistics . Dresser Industries is a growing Current Market Current Dividend Current Yield 33 2.00 6.0 company seY'ving the expanding oil and natural gas industries. In recent years, the management has wisely shifted the emphasis from Long Term Debt Preferred Stock Common (Shares) 12,500,000 4,773,000-A 1,300,000 capital goods — for which there ;s a cyclical 'demand — to expendablE goods for which there is a steady and more stable demand. Thus,it Net Per Share,1953 Net Per Share,1954 Sales, 1953 Sales, 1954- 3.80 5. 00-E 128,870,000 130, 000, OOO-E is estimated that such expendable items as drilling mUds, drilling bits and repair parts now account to close to 50 of sales and capital goods items such as drilling Market Range,1951-1954 33 5/8 to 17t A – 47,730 shares of 3.75 Cumulative Convertible Preferred (100 par) convertible into 2t common through Sept. 15th, 1955. rigs, pumps, engines, blowers and compressors account for the balance. Until recently, the latter items were by far the larger part of sales. This shift to eX,'endab Ie items should result in more mode- – Fiscal year ends October, 31st rate fluctuations in earnings and a higher evaluation of such futurE E – Estimated. earnings. The original Dresser Company date back to 1880.The present Dressern- dustries was formed in 1944 as a consolidation of S. R. Dresser and Clark Brothers, a wholly owned subsidiary. The company has grown, in part, throug the acquisition of a number of companies, both prior to the consolidation a d also after. All of these acquisitions were made on an exchange-of-stock bas s. However, earnings remained low and the management, in order to obtain a hig – er profit margin and a higher return on invested capital, decided in 1948 t divest itself of some of its former acquisition. Three of its gas applianc subsidiaries were sold to Affiliated Gas Equipment in 1948 and the retail oil field supply stores were sold in 1951 and the Kobe division was sold this year. The only acquisition since 1948, but a very important one, was the IVlagnet Cove Barium Corporation, which was acquired in 1951. Dresser Industries, through seven divisions and subsidiaries, manu- factures and sells a Wide range of equipment and supplies to mainly the oil gas and petro-chemical industries. The company's plants are decentralized and are spread from New York to California vlith the main facilities concen- trated in the oil-producing areas of Pennsylvania, Texas and California. -The Clark Brothers division is the largest of the Dresser units. It is the leading manufacturer of gas engine driven compressors. These compres ors are used in gas transmission systems for the movement of natural gas from the producing fields to the ultimate consumer and also in certain re- finery operations. Clark has also invaded the industrial field with motor- driven compressors for compressed-air systems and other important indus- trial applications. The -Dresser Manufacturing division is also an important contributor to profits. It manufactures couplings for gas distribution systems. Coup- lings are used in gas distribution systems of every city in the country. Dresser also produces its product for general industrial use such as elec- tric motor frames, dump car cylinders and rings for jet engines as well as housings for diesel-electric locomotive generators. Dresser has almost no competitors in the coupling field. Its principal competition stems from other methods of joining pipe. The Pacific Pump diviRion has an outstanding reputation as a manu- facturer of high-pressure, high-temperature centrifugal pumps for refinery mmOr.l'dum cOI'UI.Id .,,n.., mollY h!l. !In /I not to be ,nterut ./1 ,omft or all of s the oHer or ucut.ti.. IChcit.tion 0' HefJ '0 mentioned herein Th, buy or leI! '''''1 Jrcurltie, lor'Qoll19 mat.ri,,1 hu b., F,om pr. time p.red totlm'fl W,,)stOIl & Co. ' matt.r of or lilly plillrtnct thereof information 0111,. It II / ..,. boned upon ,nformallon behe..ed reliable but not neeeual., compl.te, u no' guaranteed .u accur.t. or final, and i, nCit Int,nded to f(Jl'eciole ,ndepand,nt ,nqulV -2- use. These pumps will be found in almost every refinery here and abroad. A line of pumps for steam generation in electric utilities and a steam turbine for maritime use have also been developed. The rdeco division manufactures oil and gas well drilling and production equipment. It also produces radio, radar, TV and microwave towers. Sales of this division are large, but competition from National Supply, U.S. Steel and Bethlehem Steel and indeoendent producers is keen. The Roots Connersville Blower division recently celebrated its 100thyear anniversary.This division manufactures blowers and exhausters for moving air and gases at low pressures and high volumes. It enjoys an excellent reputation, but meets stiff competition from Allis Chalmers, DeLaval Steam Turbine and Westinghouse Electric. The two important contributors to the expendable goods side of the ledger are the Magnet Cove Barium Corporation division and the Security Engineering division. Magnet Cove Barium Corporation sales have quadrupled in recent years. Its sole product is drilling mud. This product is essential to the successful completion of a well, particularly as wells get deeper. It is used to alleviate the surrounding earth formation pressures which increase geometric- ally with depth. Wells are being drilled today at increasing depths. The average well may use 2,000 of these various mud additives, but in extreme cases mud costs per well may exceed 100,000. Drilling mud is an expendable item, used up in the drilling process, so its sales are much more stable than those of heavy equipment. Due to increasing drilling depths, it would appear that the use of mud will increase much more rapidly than drilling activity, and as a result Magnet Cove has excellent growth possibilities. The division's principal competitor is the Baroid division of National Lead Company. There are a number of other mud additive producers who have a limited line and who serve primarily restricted local areas. The Security Engineering division was acquired in 1945. It produces oil and gas well drilling bits and related drilling specialties. Its marketing area has been broadened from California to include the Rocky Mountain area and the Mid-Continent. Like drilling mud, drilling bits are expendable, and are worn out in drilling operations. Bit sales, like mud, are more stable than heavy equipment. Recent operations have been concentrated on the tricone drilling bit which was pioneered by the Hughes Tool Company. The Hughes bit has enjoyed patent protection since its conception, but the patent situation is no longer an obstacle and production in the Dallas plant of Security Engineering has increased. The present market for tri-cone bits is roughly 100 million a year and Security now has an opportunity to participate in this lucrative field. Another development that could eventually result in higher o.1'!'ing3 is the recent announcement that Atlas Corporation and the Argentine Government were reported to have agreed on a contract to develop the latter's oil resources. It was indicated that Dresser would be associated in the project. Earnings have been showing a rising trend. Earnings for the nine months ended July 31st were 4.28 as compared with 2.39 in the 1953 period. Part of 1954 earnings were non-recurring, but net for the fiscal year ending October 31st should be somewhere in the neighborhood of 5.O per share. In July, the dividend was increased from 40i quarterly to 50i, thus putting the stock on a 2.00 annual rate. Dividend payouts in the past have been modest and have averaged only about 35 of earnings. The company's financial position remains strong. Cash alone exceeds total current liabilities by a comfortable margin and total working capital continues to increase. With expendable items constituting an increasing portion of saJes,it is to be expected that earnings in the future might be evaluated at a higher rate than in the past. An earnings projection of 7.50 per share over the next several years does not appear to be out of line. At a price-to-earnings ratio of 8-to-l, an average price of 60 appears, indicated. This checks with the technical pattern. The upside potential appears to be an initial 44 followed by a long term 60-70. There should be downSide suoport at 28-27 in the event of a general market decline. EDMUND W. TABELL WALSTON & CO. AS OF TODAY, WALSTON & CO. IS MOVING TO NEW AND ENLARGED QUARTERS ON THE 20th FLOOR OF 120 BROADWAY. THE TELEPHONE NUMBER WILL REMAIN THE SAME.

—————– Walston &- Co. –..–.;;….. – .– M'EMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,Id I OFFices COAST TO COAST CONNECnc. BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER October 1,1954 Despite the fact that the Dow-Jones industrials have advanced approxi- mately 33 pOints in a month (from an August 31st low of 333.21 to the Septem- ber 28th high of 366.02), the advance, from a breadth-of-the-market view- point, has been the weakest of the series of rallies that started from the September 1953 low of 254.36. Upside volume has been considerably below that of previous rallies and the number of advances and new highs has drop- ped sharply below that of previous rallies. For example, during the July rally, there were eighteen days in which over 100 new highs were reached and several times the daily new highs reached a total of over 200. There . were ten days in August- when-the daily new highs were overQO. Bycoll1!lari-, ason, there hasn't been a single day in the September rally when total-of 100 or more new daily highs was reached. This means that a smaller number of issues are carrying the market higher while a larger number are doing little marketwise or declining. This action does not necessarily mean that the year-old advance of over 120 pOints has ended. Very few issues have as yet formed vulnerable top patterns. More time and more violent fluctuations would be needed to bring this about. In the course of the next few months, cert2.in individual issues and possibly the averages could reach new high territory. However, recent action does indicate that upside momentum is waning. As I stated in my July article,at some time the market will need a resting period of some duration. Whether the market reaches 370 or 380 or 390 before this occurs is problematical. After the high is reached, I expect a wide trading area similar to that witnessed in 1951-1953. The lower limits of this trading area will probably be 335-315. Such action should be of no concern to the long term investor as I visualize higher levels in the later 1950s.It also should be of no concern to holders for longer term capital gains who should forget about the averages and concentrate on individual issues. There are plenty situations that indicate higher levels over the intermediate term regardless of the action of the averages. -The ac.t.;t,ol'l of. the L'.ails.has—been dLsa.pJlDinting .1.11- theillfl.bilit,;y; of the rail average to confirm the new highs reached by the industrials.Most rails have mediocre technical patterns and should be avoided. That is why I have only two rails on my recommended list. One of these is — MISSOURI-KANSAS-TEXAS,PFD. (73) recently reached a new high at 79 3/8 and has broken out of the long 58-70 range in which it has held since mid- 1952. The reason for the upside breakout was a compromise plan of recapital ization offered by committees representing holders of the preferred and common stock. This plan will first have to be accepted by the management and presented by them to the ICC, the court and the stockholders. It will be a lengthy process. Under the plan, the dividend arrears on the 7 cumu- lative preferred stock, which now amount to approximately 150 a share, will be eliminated. Under the proposal, each share of old 7 preferred will receive 140 in 5 Income debentures and one share of 60 par value Class A. The old common vlould be exchanged share for share for a new 10 par common. The Class A stock would participate fully with the common in a ratio of 3 to 1. Thus 75 of dividends declared would go to the A stock and 25 to the common. According to a recent article in The Commercial & Financial Chronicle, it would appear that, in line with other recapitaliza- tion or reorganization plans, a capital fund for property improvement and retirement of the bonds will be set up before dividends on the A aJld common stocks can be declared. Using pastformulasand.taking.thebest post-war earnings year of 1952, this would result in earnings of about 1.55 on the Class A and about 43.i on the common. Assuming minimum prices of 50 on the proposed income bonds and 7 on the proposed Class A, this would equal a minimum price of 77 on the old preferred and would justify purchases in the 70-65 range. Conditions in this growth territory should improve and eventually warrant the objective of over 100 for the preferred indicated by the technical pattern. Present dividend payments are 5.00 annually to yield almost 7 at 72. While the preferred appears to be an interesting purchase, the common stock appears overvalued at present price of around 8. EDMUND W. TABELL HA1STON & CO. This memorlndu, h not to be construed ,15 an offer or OIit;llatlon of offer' to buy or sell ny securltiu From lime hll time W.ahlon , Co. or any partn.r Ihereo f may h. tI'Ihrrul ,n some or all 01 Ihe ,.cunl,.s meflt,oned h,r.in Th, foreQo,nQ mat.r,at holli b.,n orep!Ired b. III lin a molltter of .nformat,on only It b!lled upon ,nformllon bh..ed reliable bioi! not nee.nanty compl.t II not qu,,.enld III accurat' or finl, and not Intendld 10 fouclole ,ndependent InCiIlY

Walston &- Co. MEMBERS NEW 'fORK STOCK EXCHANGE AND OTHER LEADING STOCI( AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw;tmld I OFFICES COAST TO COAf CONNECTtC BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER \ October 8,1954 Hopes of stock splits, increased dividends and mergers brought about sharp advances in individual stocks during the past week, but the great bulk of the list did little marketwise. As the year-end approaches, we will undoubtedly witness more of this type of action. Individual issues will continue to pursue their own course regardless of the action of other individual issues or the general market averages. The market does not present a uniform pattern. There are many issues that have reached upside objeciyes andAPearin need of at least resting period. However, there are also many-issues thoat stllYindicate-lilgherre;'elsand should be held for further appreciation. Some of the issues in my recommended list are building up rather interesting patterns and some technical comments appear in order. ALLIED STORES (48) has been showing improving action in line with most other re- tail stores. Technically, the stock has had an intermediate term object,- ive of 65 and there is support at the 45 area. The yield at present prices is over 6. AMERICAN POTASH & CHEMICAL B (59) has reacted a bit from its recent high of 65 and should be bought in the 60-55 range. This stock has advanced sharply since its recommendation in June, but it still indicates higher levels on my technical work. The intermediate term objective is 75 and the long term objective is 110-120. This stock has a steady earn- ings base in the potash field and excellent growth prospects in the higher profit margin boron and lithium developments. BLACK & DECKER (44) reached its first upside objective at the August high of 50. It has now reacted o the strong 45-43 support level and should be bought. The long term price objective is 70-80. FRUEHAUF TRAILER (31) reached a new high of 32 during the past week. Continue to hold. The intermediate term indica- tion is 36-42. LEHMAN CORP. (41) reached a new high during the week at 42. This well-managed investment trust has a common stock portfolio that is very heavy in the technically favorable oil group. Lehman should con- tinue 'ts advance to-ateast thelntermeaiate'terrlFobJet-ive -of-116–48-. —- 0 NEW YORK AIR BRAKE (20) is one of the disappointing issues in our recom- mended list. It has done little pricewise and there is no present indica- tion of any immediate move of consequense. It appears that earnings for 1954 will be around 2.35, the lowest since 1946. However, it would appear f that a cut in the 1.60 annual dividend is unlikely. Can be held for its generous 8 yield but other issues appear more attractive for price appre- ciation. PAN-AMERICAN WORLD AIRWAYS (15) remains my favorite in the air- line group. Earnings for 1954 should be over 2.00 as compared with 1.76 in 1953. Its technical pattern is quite impressive. PENNSYLVANIA SALT (45) is back to a strong support level and should be bought. Higher earnings and a larger year-end extra are possible developments. REPUBLIC STEEL (65) has advanced nicely since its recommendation in April, but would continue to hold. There is a possible 72-78 objective in the tech- nical pattern. SHAMROCK OIL & GAS (54) reached a new high at 54. The up- side penetration of 45-51 trading area indicates a probable 58-60 for the intermediate term. Long term objective is 65-75. UNION OIL OF CALIFORNIA (50) is one of my favorite oil stocks. Intermediate term objective is 60-62 followed by a long term 70-75. Downside risk appears limited to the strong 45 support level. UNITED FRUIT (51). Still like this fine- quality issue for gradual appreciation and good yield. UNITED STATES STEEL (59) has appreciaed-over 30-since its recommendationnMay. Would con- tinue to hold. The objective now appears to be around 64-70. YALE & TOWNE (48) holds around the year's high. Earnings for the third quarter may not be much better than the p'oor second quarter results, but should increase sharply in the final quarter. I like this issue not only for the inter- mediate term objective of 60-66, but for the longer term possibility of 80 or over. ' EDMUND W. TABELL ltlALSTON & CO . ….- –