Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,'wld) OFFICES COAST TO COAST COlNECTfC BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lETTER July 29, 1955 The averages continue to hold in broad trading areas. This is true not only of the Dow-Jones industrial average but the various other averages as well. Tuesday's intra-day high of 471.73 on the industrials was just a shade above the July 6th high of 471.15 and the average has held for eighteep trading days between roughly 471 and 454. Some of the other averages have held in trading areas for even longer time spans. The New York Times 50-Combined stock average (now 315) has held in the 324-309 area for twenty- one days and the New York Herald-Tribune 100-Stock average (now 196) has rangeo.between–199–and 194 for th1rty'-one trad-ing days.- J.n even wider area – – is occupied by the Dow-Jones rail average which has held in the 164-154 range since Two other averages, however, have recently reached new highs. The Dow-Jones utility average has bettered the March high of 65.75 at liJednesday' s high of 66.89. Also, the important Standard & Poor 90-Stock average bettered the July 6th high of 342.91 to reach 347.46 during the past week. The only reason for this discussion of the averages in a market the action of individual issues has been much more important than the action of averages is because the trading areas are now broad enough to indicate the next move, when the breakout occurs, will be of fairly substantial tions. The Standard & Poor has been the only combined dverage to break ou of the range and I would be inclined to aviai t a confirmation by some of the other averages. I would watch the Dow 65-Stock average quite closely for a clew. This average ba s;held in the 169-165 area. Ability to break out of ,this area on the upside to 170 would indicate 174. This would be an equivalent of about 480-485 on the Dow-Jones industrial average as against a present price of 467. A downside penetration to 164 would be of considerably more signifi- cance and would indicate 158 followed of the industrial average, this might by a possible 150. indicate a decline Ttora4n4s0la-4te3d5 into tern followed by a possible 420. If the trading area continues for a longer time, these expanded..,.oll.both the upside — – The copper situation continues very tight whereas three months ago, when we originally recommended Magma Copper at 75, it was dubious whether a price would prevail. It now seems quite possible that the current price will at least prevail and may even rise. Stocks such as Magma and Copper Range, which have great earnings potentials yet to be realized,could be still quite undervalued for longer term holding. Recent price was 86. Dow Chemical has announced earnings of 1.64 for the fiscal year ended May 31, 1955, as compared with 1.42 for the previous year. It would seem, however, that the important thing in the statement is that 73 or 3.23 a share, was charged to depreciation. The President states that figure, which is up from 65 million last year, can be expected to level off in the future and consequently more substantial earnings improvement can be expected in future years. Allegheny Ludlum Steel evidently disappointed the Street by raising its dividend only 101 a quarter to a 2.40 annual rate. In view of the earn- ings projected for the stock, this raise is perhaps overly modest and could be followed shortly by a subsequent raise or by an extra. Blaw-Knox showed earnings of for the second quarter as compared with 67;i for the like period of 1954. I expect this stock to do very little pricewise for quite some time as the company is going through a plant con- solidation program which is currently holding down earnings. 1JJould continue to hold, however, as the- long term indications are very favorable both from a technical and fundamental viewpoint. of a United Shoe Machinery common share compared fworiththe50qt uaa rter shar ended e in May 31st, showed the like 1954peri a net od. The directors will consider listing the stock on the New York Stock Exchange. The stock has held in the 45-54 area for a long time and it appears to be building up a slow accumulation area. EDMUND VI. TABELL 1,oIhLSTON & CO.

r'r; Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE ANO OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN fRANCISCO LUGANO (Sw,t.Id( OFFICES COAST TO COAST CONNECTfC BY OIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER hUgUSt 5, 1955 Most of the various market averages broke out of recent trading range on the downside and it would appear that the market is in at least an inter mediate term downtrend. The first downside objective on the industrials is 430. There is very strong support in the entire 430-390 area which would be an ideal long term buying pOint. The first downside objective on the rails is 145-140. If these objectives are reached, the technical indicator which signalled a sell on July 7th at 460 in the industrial average would be in a position to reverse this signal. The market has been losing upside momentum sin.ce ,early in the year,- despite the sharp advance in a few blue chip issues that carried the in- dustrial average to new highs. It appears that we have been in a distri- butive phase of the market and that stocks in periods of strength have been passing from stronger hands into weaker hands. In addition to this, recent money rate developments would seem to indicate the possibility that institutions which have been the prime buyers heretofore may not have a buying interest until lower levels are reached. Under this theory it would appear that recent favorable business developments have been largely discounted and that were there to be any further decline some scare selling on the part of latecomers to the market could develop. lith a fairly substantial correction a possibility, some of the less exploited issues should be watched for possible buying pOints as support levels are reached. Such issues, together with suggested possible buying ranges are listed below. JOY MANUFACTURING, mentioned in our last letter, has moved as high as 57 3/8 since originally mentioned in this letter at 47. Support should be encountered in the 48-45 area. The company bettered 1954 earnings figures of 4.08 per share in the first nine months of the fiscal year ending September 30, 1955. Yield is close to 5 with higher dividends and earnings in prospect. COCA-COLA, originally recommended at 122, moved as high as 145 and has Since reacoj,ed-oto -around 130. attract- ion as a conservative income producing vehicle. As in what ap- pears to be a reoord heat wave, it should be recalled that Coca-Cola's earnings tend to show a direct correlation with the mean temperature of the Summer and third quarter results should substantially better those of 1954. New sales techniques will probably accellerate the rate of in- crease in earnings this year and in future years. Having very little need for capital expenditure and particularly no debt, Coca-Cola is in position to pass any increase in earnings along to stockholders in the form of dividends. Although the earnings of EAGLE PICHER OOMPANY have made the esti- mates in our June 17th analysis appear rather conservative, the market does not appear to have reflected the unusually good operating results. Eagle Picher, in the first quarter of 1955, earned twice as much as in the comparable period of 1954. It then went on to double those earnings in the second quarter of 1955. Thus it has already earned 2.11 a share as compared with 2.47 for the entire 1954 fiscal year. It appears well on its way to passing the 4.08 a share earned in 1952. The company re- cently raised the quarterly dividend to a share, but operating re- sults would indicate the possibility o'f a fairly substantial extra at the end of the year. Assuming a 2.00 payout, which certainly is not unlikely, the shares yield -almost 6 at the current price of 35.' Support should be encDuntered very close to current levels. HEVIITT-ROBINS,INC., originally recommended at 25, has advanced to 37 and should encounter support at around 35-33. The company has re- cently acquired the W. A. Jones Foundry & Machine Company, makers of heavy duty speed reducers, pulleys, gears and other accessories used to drive machinery. Although no purchase price was disclosed, it is assumed that the purchase was made on terms very favorable to the company. The Jones company has had annual sales during the past four years of 4 million. A merger of its distributing facilities with those of Hewitt- Robins should enable the acquisition to add substantially to Hewitt- Robins' profits. EiJ)MUND TABELL lei AFTON Ik CQ , –……;.,

Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Swa,ld) OFFICES COAST TO COAST CON'NEC1E; BY DIRECT PRIVATE WIRE SYSTEM EDMUND W. TASELL INSTITUTIONAL LETTER August 9, 1955 Both the lindustrial and rail averages and also the various combined averages have broken/through recent trading ranges on the downside and indi- cate lower levels. However, the distributional patterns formed are'not very wide and, unless the formations are broadened, I would not expect a severe decline. The industrial average, which topped out at 471.73 and is now at 448.86 should meet initial support at around 430. If this reSistance does not hold there is exceptionally strong support in the entire 420-390 zone which, in my opinion, is a long term buying area. Considering that the aver- age sold as low as 412.60 in May, the possible decline is not of very large proportions. The rail average, which topped out at 164.59 and is now 151.22, should meet support at the 145-140 area. The 1955 low was 137 on the rails. Individual issues have formed distributional,patterns of various degrees of vulnerability. In many cases, the declines indicated are relatively small. The table below shows the downside potential of a number of leading issues based on the distributional patterns already formed. These top patterns could, of course, be widened but that would necessitate a rally from present levels Stock 1955 Price Downside High Now Foten. Stock 1955 Frice Downside High Now Poten. Allied Chemical 122 ,106 Allied Stores 63 58 Aluminium,Ltd. 112 101 Aluminum Co. 74 67 Amerada Petrol. American Can 1 04 55 9430 Amer .Cyanamid Amer. Tel & Tel Amer. Tobacco Amer. Viscose 63 57 187 184 74 ,73 66 59 Atchison T.& SF 151 130 Bendix Bethlehem Steel Caterpillar Coca-Cola 59 160 15475 47 144 12580 Colgate Palm. 62 54 Continental -Oil Corning Glaas Deere & Co. Dow Chemical DuPont Eastman Kodak General Electric General Foods General Motors Gulf Oil LB.M. Inter.Harvester 90 73 38 58 249 82 56 86 138 4854901 87 65 34 52 215 77 50 82 129 4803158 Inter.Nickel Inter. Paper 17194 17053 91-88 00-57 39-37 54-52 175-170 65 52-49 123-120 39-35 130-130 14295–41622 52 0 90-86 62 33-32 51-49 200-180 73-69 43-41 80-78 125-120 3737975—7334650 70-66 99 Johns Manville 97 Kroger 50 Libbey-Owens F 87 May Dept.Stores 44 Minn.Honeywell 70 Minnesota Mining 115 Monsanto Chern. 52 Natl.Cash Reg. 47 National Dairy 43 National Lead 84 Owens Illinois 131 Phill' P t 1 79 96 Pure Oil 41 Radio Corp. 55 Scott Paper 78 Seaboard Airline 87 Sears Roebuck 105 Socony-Mobiloil 62 Southern Pacific 65 'Southern Rail. 99 Std.Oil Indiana 53 Std.Oil of N.J. 144 Texas Company 108 Union Carbide 102 Union Pacific 178 U.S.Gypsum 285 U.S.Steel 57 Westinghouse El. 83 85 41 79 42 58 99 42 38 40 76 118 72 82 37 46 69 79 95 58 60 93 50 132 102 93 157 753l 6 5 75-70 40-38 72 40-38 53-47 100-95 39-37 31 40-39 65 110 66 80-75 3433–4300 64-62 71-67 90–87 56-54 56 81-78 46124-120 96-94 92-88 125305–212455 ' 46-42 52-47 The eight issues below have, in my opinion, excellent long term technical patterns. They are so called light blue chips rather than the traditional institutional equity but earnings, yields and technical considerations are all favorable. I would consider a decline to the areas mentioned in the last column a definite buying opportunity. High 1955 Price Now Buying Level Allegheny Ludlum Amer.Potash & Chern. Black & Decker Cutler Hammer Dresser Industries Eagle Picher Hewitt-Robins Joy Mfg. 59 87 73 79 47 36 39 57 55 84 66 74 43 35 5337 47-45 78-75 63 68-65 41-38 32 35-33 50-48 EDMUND W TAREI.I. WALij'JfQN'II& tDfO,memorandum IS 1'101 to be contrued .!I an offer or OIICllallon of offen to buy or ,ell olin)' I ha WoIIlden & Co, or any partner thereof, been prepared b,. uS as iI matter of rnformllilon only If II mba'lyilldhauvpeonanHlIlnortemraet\oton,1'1 bseolmieve edor rehIIoilbolfe tbhuet IntCotLlrniellteul llmIfelnlytiocnoemdplhelltree,l!!IS nTohte qUllran ee mat oilS aecr ItIuI r I t e or flnlll , lind nDt Intended to forecicHe ,!!dependent ,qUIfY

r r; Walston &Co. ;-,' MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEAOING STOCK AND COMMOOllY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,Id) OFfiCES COAST TO COAST COINECTfC BY DIRECT PRIVATE WIRE SYSTEf.1 TABELL'S MARKET LEnER August 12, 1955 The downside penetration of the trading shelves of 471-455 in the industrials and 163-154 in the rails pushed the averages down to lows of and 150.14. A week-end rally brought about an advance to 458.99 and 154.69 on Friday. Volume indications were unfavorable however, with trading, on the advance at the slowest pace of the year. There is heavy overhead supply in both averages and I would not expect the recovery to carry much above present levels. It would appear that the intermediate trend is established as down and that rallies should be used to lighten trading accounts. There is no need to disturb long term investment accounts. Only moderate distributional tops have been formed and at last week's lows about half of the antiCipated decline has been reached. In view of the current level of the market and the number of issues included, we have decided to cut down our recommended list rather drastically. The new list, which is set out below, contains only those issues which we consider suitable for new purchase at levels close to the current market. \'Ie have attempted in each case to indicate buying levels in the of further market weakness. The fact that an issue has been eliminated does not mean that it should necessarily be sold and it may in many cases be held for long term investment purposes. However, it would probably be wise to convert issues in which there is a large profit into cash with intent to switch into issues in the list below, when indicated buying levels are reached. There is more than 450 points profit vs. 8 pOints loss in the issues eliminated from the list Frice Recom. Alleghany Corp. 3-3/4 i-.llegheny Ludlum 33-30 i .. llied Stores 38- Amer. Chain 30-33 hmer.Potash B 40 o.ssoc. Dry Goods 26 Barber Oil 59 Black & Decker Calgary & Ed. 39 16 Celanese Chain Belt 30-35 Cities Service 38 Coca Cola 122 Colgate Palm. 60- Cornell Dubilier 21-22 Cutler Hammer 57- Dow Chemical 38-40 Dresser Ind. Eagle Picher Co. 2323 – Hall P'Iinting Hewitt-Robins 25-30 Joy Mfg. 47 Magma Copper 75 Monsanto Chemical 31 Montana-Dakota Util. 26 Pacific Petroleum 11 Pan-Amer.World f.ir 11-13 Raybestos Man. 42 Robertshaw-Fulton 21 Simmons Co. 36 Sinclair Oil 46- United Fruit 47-50 Hestern huto 25 Yale & Towne 45 Present F'rice 10 55 5490 85 34 57 67 16 24 52 52 131 54 32 74 52 43 35 22 36 54 91 43 28 11 19 53 29 47 55 56 28 65 Yield – 4.4 51 6.3 2.6 5.3 3.5 3-;-0 – 2.2 4.8 3.9 3.8 4.6 6.3 4.0 1.9 5.8 5.1 6.4 5.6 4-.7 2.3 3.4 0.8 4.2 5.8 52 45.79 5.3 5.7 4.6 icdvice Hold for 12, then 17.Buy at 8. Hold for 85. Buy at Hold for 98. Buy at 57-53.- Hold for income. Buy at 38-35. Hold for 120. Buy at 78-75. Hold for 45-65. Buy at 31-30. Hold for 80-115.-Buyat-57-55. Hold for 135. Buy at 62-58. Hold for 36. Buy at 15-;- Hold for 34. Buy at 22-20. Hold Hold for for long term 81. Buy at 7580. –B4ur y. at Hold for 200. Buy at 130-125. Hold for 73-100. Buy at 54 -50. .Hold for income.Buy at 27-25. Hold for 120-140. Buy at 65-6c Hold for growth. Buy at 51-49. Hold for 70-85. Buy at 41-39.- Hold for 61 to 77. Buy at 33-3 Hold for income. Buy av 19. Hold for 85.- Buy at 35-33. Hold for 75-150. Buy at 50-48. Hold for 200. Buy at Hold for growth. Buy at Hold for 45-60. Buy at 28-25. Buy as long-term speculation. Hold for 27-45. Buy at 19-1-8. Hold for ineome. Buy at 49-47. Hold for Buy at 28-26. Hold for 71-96. Buy at 43-40. Hold for 65-89. Buy a t–55-52 . Hold for 86. Buy at 55-52.- Hold for income.Buy at 28-27. Hold for 105. Buy at 60. EDMUND H. Ti.BELL H.LSTON & CO.

..– or Walston &Co. MEMBERS NEW VORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,lwld I OFFices COAST TO COAST BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER August I9, 1955 As the market was unable to penetrate the heavy overhead supply at 460-470in.the industrial average and 155-157 in the rails. The week's highs were 458.99 and 155.30. Volume, which was relatively small on last week's advance, was even more restricted on the decline early this 1leek. The direction of the next near term move will depend on whether the highs mentioned above are penetrated on the upside before the market- falls below the August 9th lows of 445.67 and 150.14. An immediate uown- side penetration would indicate 430-420 in the industrials and 145-140 on the rails and a buying spot. However, if the averages push ahead into the owerhead-supplyoa-nd -then-f-ail-to- of-4-7-1. 73' and – 164.59, it would result in a broadening of the top and the possibility of an even greater decline than now indicated. Present technical indications point to a continuation of the recent policy advised by this letter. In trading accounts I would sellon strength, but see no reason to disturb long term investment holdings. Two of the stocks on our recommended list outperformed a listless market and made new highs last week. JOY MANUFACTURING was under strong demand and pushed into new high territory at Friday's high of 58 1/2.0n the announcement of the establishment of a 401 copper price, MAGMA COPPER led the red metal shares, making a new top at 96. As evidenced by last week's buying, JOY seems to be coming for more and more attention by analysts. Investograph's Service of Rochester, N.Y., in their letter of August 12th, recommended a switch from Masonite into JOY. The Investograph recommendation stated, in part, Demand for JOY products began to strengthen in the final three months of 1954 and has been gaining momentum with each passing period …… Mr. Morrow, president, stated that, despite record sales in the June period, new orders were even greater. Under this rising volume curve, margins have widened substantially, with-tfle re-su-lt been-in–a-fast-pi-s ing -tFend-.-.-. F-or- – the nine monthA through June 30th, sales were 14.6 more than in 1954, while net of a share was a big 46.2 above the 2.88 reported last year …. V1e estimate profit for the year through September 30th will be somewhere between 6.00 and 6.25 a share, and within the next nine months this figure should approximate 8.00 per share. Because of last year's earnings decline, the December quarter extra dividend was not paid, but it should be made available this year. Looking further ahead to our 8.00 earnings estimate, a future dividend rate of 4.00 is quite probable. , Since originally recommended in this letter last March at a price of 75, MAGMA COPPER moved ahead sharply to reach a new high of 96 this week. Impetus for the strength in this and other copper stocks was pro- vided by the announcement of a 401 per pound copper price instituted by the major producers. Although due to the recent sharp rise some price consolidation is probable this stage, it would seem that even the current price does not over-discount Magma's long term possibilities. Our copper. On ori a g40j n1 a l earnings projections were based on a 331 price for it does not seem unlikely that Magma could earn some11here in the 27-30 per share-orange, based on current-capitalization, in the year 1957. With the improved earnings outlook it would seem that the current RFC loan which prohibits the payment of dividends other than stock, might be refinanced some time next year thus opening the way to dividends on the common. Our long term price estimate of 200-300 for the stock, therefore appears to be more and more within the realm of probability. EDMUND W. TABELL WALSTON & CO. ' – – i 'Ita (

,- . Walston &Co. MEMBERS NEW YORI( STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw;t,Id) OFFICes COAST TO COAST CONHECTEC BY DIRECT PRIVATE WIRE SYSTEM EDMUND W. TABELL INSTITUTIONAL LETTER August 23,1955 I believe the market, now around 457.35 in the Dow-Jones industrial average,will gradually work lower over the next three to six months. Besides the obvious reasons that yields and pie ratios are at or very close to levels prevailing at previous market tops, the internal technical market action has been weakening and stocks have been passing from stronger into weaker The reason why the stock market will work lower is not because of deteriorating business or earnings, but because of credit and money moves to control the world-wide boom in credit and loans and prevent overspeculation in securities. If things work out as expected, further credit and money moves will slowly result in higher money rates and lower bond prices. A decline in bond prices has usually in the past resulted in a lower stock market not much more than a year or so after bond prices reached their top. Drastic stock market declines-occurred in 1929, 1932 and 1946 after the bond market started down. The 1952-1953 bond market weakness resulted in selective consolidation in the stock market rather than a severe decline. Bond prices have been in a slow but steady decline since April, 1954. The time element is about right for the stock market to start its dip as forecast in the past by the falling bond prices. However, if technical indications are correct, it would appear that this correction will be more similar to the 1952-1953 experience than to the 1946 and 1937 declines — less the 1929 debacle. From the moderate distributional tops formed, present indications point to not much more than a 15 decline from the 1955 top of 470 to around the 400 level. I would expect the broafr 420-390 level to be a long term buying level. It now appears that the Dow-Jones industrials will earn 35 a share in 1955 and this will result in a central or normal value (explained in previous letters) of around 390 to 410 in 1956 depending on the level of high grade bond yields. The normal value of the pow-Jones industrials for 1955 is 378. In the 1952-1953 market the decline from the high to the low was a shade less than 15 and was quite selective. Some issues like American – declined over 50. The blue chip growth issues declined only moderately but spent a long period of time in re-accumulating in narrow trading areas. On the other hand, some of the issues in the food, food chain, tobacco and utility groups moved higher. I expect similar price action over the next year or so. I envisage about a 15 decline in the industrial average from 470 to around 400. The decline will be selective. 40 of the individual issues in the market may work lower, 40 may rest or consolidate and 20 might move higher against the trend. Obviously the issues and groups in the above three categories will be quite different from those of 1951-1953. Among the issues and groups that will be or have been most vulnerable are groups reavy in defense work and those groups that have pushed ahead too rapidry of speculative buying. The issues that may require rest and con-are the blue chip growth iGsues. They need to rest while earn- and dividends catch up with price. The issues that could advance are of the issues that have been just a shade below institutional quality put whose earnings and dividend trends have been making them eligible for in many portfolios. A list of issues of this type was carried n my last letter. This slowing down of excesses takes a steady control. Too drastic might upset the now favorable sales and earnings picture and result n a business recession. From present indications, however, this does net fPpear probable. If it is going to occur, there should be warning indiations in the technical pattern. EDMUND W. TABELL WALSTON & CO. .. b II n teel/nflU From hme to time Wills/on & Co, or ny partner thereof 1h' memorandum II not to be condrued as an offer or sohcltatlon of offers to u.,. or Ie / I has been prepared by UI .u matter of Informatoon only II IS may have an ,nterest In lome or all of the securities mentioned herein The ma rte or finl/ll and n not Intended to forecleu! ,ndependent onqulrY b.ued upon information believed reliable but not neceuuily complele, 1 not quaran ee u a u , .I

— Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEAOING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,tmldl OfFICES COAST TO COAST COlNECTE-i BY DIRECT PRIVATE WIRE SYS.TEM TAB ELL'S MARKET LEnER Augus-t 26, 1955 The time has arrived when it is perhaps necessary to hedge a bit in making any prediction as to the future of the market. Starting last Tuesday, the imdustrials, led by strength in the copper, steel and chemical shares, staged a brisk rally and at Friday's high of 465.30 had retraced over half the decline from the July 26th high of 471.73 to the August 9th low of 445.67. The action of the rails was somewhat less impressive and after rebounding strongly they turned sumewhat weaker toward the end of the week, having backed away from the supply at 159-161.If the current strong market action continues and the industrials are able to push through-the old highs, it,is quite probable-that -higher levels are'in 'pros- pect, perhaps about 490. It is well, however, at this point to quote a para graph from last week's letter However, if the averages push ahead into the overhead supply and then fail to penetrate the year's high of 471.73 and 164.59, it would result in a broadening of the top and the possibility of an even greater decline than now indicated. Based on probabilities, there seems little reason to change the policy consLsently advocated in this letter of lightening commitments in periods of strength. Were an upside penetration of the old highs to be effected, and higher prices ensue, it would place the market considerably above its normal value based on earnings and dividends and thus dictate a policy of prudence. If, as seems more probable, the top broadens and a decline ensues, as was discussed in last week's letter, it would be advisable to have a buy- ing reserve of some proportions for use when a buying level is reached. It is important for the investor who is attempting to maintain a cash re- serve to make sure that the yield from his common stock holdings is good in order that his overall yield be not too greatly diminished by the holding of cash. Listed below are six common stocks which provide a yield of better than 5 and which seem to have excellent defenSive qualities. ALLIED STORES (58) yields 5.2 on the 3 dividend which has been paid .. , is the wi-th— seventy-five stores. Sales potential has been increased by plans for seven additional shopping centers. – CORNELL-DUBILIER ELECTRIC (34) offers a 5.9 yield on an indicated divi- dend of 2.00 which could be supplemented somewhat by extras during the year The company's principal output consists of small capacitors and its record in this highly competitive field is exceJlent. Although sales were off for the first three quarters of the fiscal year ending September 30, 1955, im- proved production methods and reduced taxes bettered results. 1955 earnings should be about 3.40. HALL PRINTING pays a current dividend of 1.40 and at the current price of 22 yields 6.4. Hall is one of the largest contract with sales volume divided evenly between magazines, catalogs and pocket-sized books. Earnings for the fiscal year ending March 31,1955 were 2.11 and this year should be close to 2.35. The earnings record has been remarkably steady since 1946. – SIMMONS CO, assuming a pay-out of 3, yields 6.4 at its current price of 47 First half earnings were 2.35 vs. 1.45 in the comparable period last year and 5.00 would seem a reasonable expectation for 1955 earnings. Con- sidering its dominant position in the bedding trade, the company's sales should improve with population growth and it appears an excellent commitment for good income plus capitalappreciation. – UNITED FRUIT (57) yields 5.3 on the current dividend of 3. It is the largest world grower of bananas and common stockholders enjoy the position of being senior creditors since the company has no funded debt. Earnings were down in 1954, but average earnings for the preceding five years were 5.80 per share and the final half of 1955 should represent a start toward bringing earnings back to these levels. — WESTERN AUTO SUPPLY (28) recently split two-for-one and will pay an indi- cated 1.60 to yield 5.7. It operates a chain of 425 retail stores selling automotive and other hard goods.A recent purchase of the western units of Gamble-Skogmo should be favorable to the company. ANTHONY W.TABELL WALSTON & CO. f

Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LU,GANO (Sw,Idl OFFICES COAST TO COAST BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET LEnER September 2, 1955 The Dow-Jones industrial average reached new high territory at Friday'S high of 473.52, but the lack of volume on the advance casts considerable doubt on the ability of the market to support a sustained rise at this stage of the market pattern. Friday's high was reached on volume ofl,700,OD( shares, while the July peak of 471.15 and 471.73 were reached on volume of 3 million shares and 2t million shares, respectively. In fact, while there was not a single day in June and only one day in July when trading fell be- low the 2 million share mark, more than half of the -ugust sessions were below that figure. This waning upside momentum dictates a certain amount of-caution despite that the upside penetration of the two-month old 471-446 trading area indicates the posSibility of a further rise to the 480-490 area. However, the industrial average is the only market aver- age to reach a new high. The rails at the week's high of 157.65 are still . considerably below the June of 164.59 and the various combined aver- ages (both industrial and rail) are also below comparable highs. In trading accounts would continue the policy recently advocated in this letter of taking profits on strength. In investment accounts see no reason to change the overall pOSition, but would use strength to sell si- tuations of below average attraction and transfer into issues on our recommended list such as Joy, Dresser, Eagle Picher, Hewitt-Robins, etc. Would expect the market to hold in the broad 500-400 area for the fore- seeable future with selected issues continuing to show individual strength while the balance of the market consolidates or declines. & DECKER Current Market Current Dividend Current Yield 76 3.15 (E) 4.2 (E) Black & Decker was originally men- tioned in this letter in February, 1954 at a price of 38. At that Funded Debt Common stock 5,170,000 430,042 shs. Net' PerShare, 1',f55 7 (Ef Net Per Share,1954 6.66 — time it was pOinted out that the – company was embarking on a vigor– ousexpans-ion – , ize on the growing do-it-yourself market for its comprehensive line Sales-1955 40,000,000 (E) of portable power tools. It was Sales-1954 35,140,000 pointed out that the heavy rate of Market Range 1951-1955 76 – 31 5/8 capital investment necessitated a payout ratio of only 50 of earn- Based on estimated 1.50 annual ings but that this might be expect- rate on new stock and giving ed to be liberalized on completion effect to 5 stock dividend and of expansion and when debt reduct- two-far-one split. – ion charges were reduced. Since – – – – – – – – – – then both the fundamental picture and the market action of Black & Decker have continued favorable. Earnings are estimated to be about 7.75, a new high for the fiscal year ending September 30,1955 and the stock has almost doubled in price. Yesterday, the Directors declared a dividend of 5 in stock, supplementing the regular 501 quarterly, to be followed by a 2-for-l split. Thus, the present holder of 100 shares will wind up with 210 shares when all the new stock distributions are completed. With capital expenditures completed, Black & Decker is still deserving of scrutiny deepite the sharp price advance. There is every reason to ex- pecttheodo-it-yourselftrend to continue over the long term should improve correspondingly. Even at present levels, cash flow is gene- rous due to liberal depreciation charges. Thus, the big question is the future trend of dividends. The 2.00 annual rate on the present stock was supplemented by a 1.00 extra in 1950 and 1951 before expansion was under- taken and with capital expenditures about to level off there is no reason not to suspect a 1.50 rate on the new stock which works out to be an indi- cated dividend of 3.15 based on current capitalization. Over the longer term it is expected that this rate could be liberalized further as earnings improve. From a technical point of view the long term objective continues to be 135. First objectives have been reached and it would be logical to ex- pect some consolidation now or following the split.Support is encountered in the low 60s on the present capitalization and commitments made in this area should work out to advantage. ,ai I I ,t,

Walston &Co. MEMBERS NEW YORK STOCk EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PH!LADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw;',,d I OFFICES COA.ST TO COAST CONHECTEC BY DIRECT PRIVATE WIRE SYSTEM EDMUND W. TABELL INSTITUTIONAL LETTER September 7, 1955 After reaching a high of 432.76 in April, the Dow-Jones industrial average reacted to a May low of 412.60. Just at about that time, my May 20th letter said- From a timing viewpoint, it is probable that after some further irre- gularity, the market will have its traditional Memorial Day to Labor Day ad- vance. After that, it be normal to expect a return to the lower part of the wide trading area later in the year. This contemplated pattern sug- gests a market that will necessitate owning the right issues if capital appreciation is the prime motivation. It also suggests a market where over- exploited issues should be avoided. In the 1951-1953 market, Celanese drop- ped from 58 to 20 at the same time that Seaboard Air Line was advancing from 18 to 48. Similar divergence will undoubtedly occur in the contemplated trading shelf in which the market may hold for a considerable period of time. ' With the exception of a few minor changes, I see no particular reason to alter the opinion expressed four months ago. The traditional Summer rally has taken place. The advance was greater than I expected. My projection was a move from 415 to 435-450, or about thirty-five points. Actually, the industrial average reached a high of 473.52 on the trading day before Labor Day and 478.80 on the day after for an actual advance of over sixty points. As far as the trading shelf is concerned, I have recently revised my opinion. I envision a trading area of roughly 500 to .400 over the next year or two with the possibility of 40 of the individual issues working lower while 40 rest or consolidate and 20 move higher. My timing for the near term has been off a bit. My expectation was a decline from the July high of 471.73 to about the 430 level before a new high above the July peak was attempted. However, the actual August low was 445.67 which was quite a bit above my downside objective. The upside penetration of the two-month-old 471-446 area now indicates a probable advance to 480-490 level. At Tuesday's high of 478.80, this level was almost reached. The rail average at Tuesday's high of 159.29 is still considerably below the June high of 164.59. \!Ihile it is possible that the industrial average may move a bit higher,the investment odds are not very favorable at this level of the market. The technical pattern suggests a potential advance of ten to twenty pOints as compared to a possible downside potential of at least 430 or fifty pOints lower. Pre-supposing earnings of 36.00 a share for 1955 and a dividend payout of 20.00 a share on the Dow-Jones industrial average would result in a PiE ratio of 13.9 and a yield of 4.0 at a price level of 500 . .'.t a price level of 400, the piE ratio would be 11.1 and the yield would be 5.0.These figures compare with the following for the past ten years with piE ratios and yields figured at the yearly high prices PiE Yield Yield 1946 1947 1948 1949 1950 16.0 9.8 8.2 8.2 7.7 3.6 5.0 6.0 6.5 6.9 1951 1952 1953 1954 11.0 12.0 11.1 14.2 6.0 5.2 5.2 4.3 At a price level of 500 for 1955, the 13.9 PIE ratio would be higher than all of the above years except 1946 and 1954. On a yield of 4.0, the yield would be lower than every year except 1946. At a price level of 400, the 11.1 PIE ratio would be higher than five and lower than three of the years from 1946. The 5 yield would be better than two previous years, about equal to one more and below six previous years. All of this indicates that at 500, the industrial average would be amply discounting the expected 30 increase in 1955 earnings over 1954 and the approximately 20 increase in dividends. Also at 400, the market would not be too drastically undervalued compared with the PIE ratios and yields of the past ten years. Of course, the market was greatly undervalued during most of that period and it would require quite a drastic change in investor sentiment to bring about a return to 1950-1953 ratios. EDMUND W. TABELL vH.LSTON & CO.

Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw,'wl.,d I COAST TO COAST CQ4NECTfC BY DIRECT PRI …..ATE WIRE SYSTEM TABELL'S MARKET LEnER September-9, 1955 The market pushed selectively higher last week with the Dow-Jones Industrials making a new high at 478.80. The rails, at the week's high of 163.32 were still below the June high of 164.59, although the group was showing good strength at week's end. As indicated in our last week's letter, I it would seem that somewhat higher prices are indicated, but at this stage the advance is expected to extremely selective and a considerable amount Iof trading agility will be reqttired. Upside objective on the industrials is ' about 490 and on the rails 172-179, assuming an upside breakout. It must i1 be remembered, however, that although the probabilities appear to favor the- –upll-ide7 -duwnside-pot-entialsre-cun-siderab-ly—great-er;– thus-creat-ing-unfavor- – – .I able investment odds. New buying should be undertaken caution and Istrength should be utilized to switch out of unfavorably-placed commitments. Statistics DRESSER INDUSTRIES,INC. Dresser Industries, which has I Current Market Current DiVidend 46 2.50 been on our recommended list for some time, attracted a good deal I' Current Yield 5.4 of favorable market attention in Long Term Debt Common (shs.) 12,500,000 2,006,815 A the past two days, based partly on a talk by R.E.Reimer,Vice Presi dent and Treasurer, at the New Net Per Share,1955 5.00 E Society of Security on Net Per Share,1953 5.03 B Thursday. Mr. Reimer estimated Sales,1955 Sales,1954 160,000,000 E 130,000,200 B Mkt.Range 1951-1955 47 3/4 – 1/4 that Dresser's sales for the current fiscal year will be about160 million as compared to about 130 million last year. Earnings A – Gives effect to full conversion of preferred. E Kstimat-e-.—- – — – should be about 5.00 per share vs. 5.65 last year of which 331 was ..Don-recurl'-ingtncQme …-J2.Qth- figures have' been adjusted te-re- B – Consolidated with Lane-Wells. flect the operations of Company, Dresser's newest subsi- diary, and the 1955 estim' C takes cognizance ,of the fact that 100,000 additional Dresser shares will be out- standing at the end of this year due to conversion of preferred stock. The attractiveness of this earnings picture is further enhanced by the fact that it includes a loss of million or 751 a share on Dresser's Securities Engineering division. The main product of this division-is the tri-cone or three-cornered drilling bit, extensively used for deep-well drilling. Since this proctuct is still partially in the experimental stage, it has shown operating losses so far. Mr. Reimer estimated,however, that over a period of time the division can show around 27 million dollars sales and contribute proportionally to Dresser's operating profit. Dresser has changed its character considerably over recent years. For 1955, over 50 of sales will come from expendable items. Since these items have a far more stable demand than do capital goods, Dresser's sales and earnings can be expected to-show far less variability than in the past. Greatest to volume non-expendable items came from the mer- ger with Lane-ltJells, a specialized oil well engineering service. Another major expendable item.is drilling mud,which must drilling.Major-components-for this material are Barite and Bentonite of which Dresser owns the largest depOSits in the world. These mineral reserves are not included on the balance sheet,incidentally,but have a possible potential value at around 20 per share. With economists predicting steady growth of oil demand over the long term,Dresser products, which are the cornerstone of the oil industry, can be expected to experience a dynamic sales growth. Bought on any weak- ness, Dresser appears to be one of the cheapest participations in the ex- panding oil and gas industry. The long term technical objective for Dresser is 75-80. Over the term, ability to reach 48 would indicate 53. There is support at 45-43 where the stock should be bought. EDMUND VI. TABELL