— Walston &Co. Inc. Members New York Stock EXchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa,ld) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER , December 7, 1956 The market, as measured by the Dow-Jones Industrial average, is now wedged between the heavy overhead supply area between 500 and 525 which has stopped the advance twice during 1956 and, the strong 470-460 support area which has halted the decline on four occasions during 1956. It would appear that more time will be spent in the broad 500-460 area in which the market has held since early September. The industrial average almost traversed this whole area in just one week with a low of 460.41 on November 29th and a high of 497.09 on December 7th. While the outlookappears to call for a long extension of the 1956 trading area, individual issues will continue to show excellent price action. / I Statistics TENNESSEE CORPORATION Currant Price Current Dividend Current Yield 55 2.45 4.5 For somereason,stocks which have all the characteristics of true growth equities are sometimes comparatively neglected ,by the in- Funded Debt.& pfd.Stock – None Common Stock , 1,863,231 shs. . Earn.per Share-1956-E 5.35 Earn.per share-1955 4.20 vesting public. Such a stock may be that of Tennessee Corporation which has been in our recommended list for some time and which appears to meet all the criteria of a true growth enterprise. Sales 1956-E Sales – 1955 72,000,000 66,500,000 The table below shows earnings indices for Tennessee Corporation and for the Dow-Jones Mkt.Range 1956-55 62 7/8 – 41 1/2 Industrial average with the 1947- Plus 3 stock paid in 1956 & 1955. 1949 average earnings equalling 100 in each case. It can be noted that the earnings of Tennessee – Corporation have increased in a ten-year period roughly twice as fast as those of the Dow, yet, at cur- rent levels, Tennessee's earnings are capitalized slightly more than ten times while the Dow's are capitalized at fourteen times. EARNINGS INDICES (1947-1949 100) -Ye-ar 1947 1948 1949 1950 1951 1952 1953 1954 19551956-E Dow-Jones Ind.Aver. 86 106 108 141 121 114 125 130 164 165 Tennessee Corp. 91 112 97 137 126 130 '136 218 250 318 It may be seen from the above table that Tennessee's earnings have increased at an average rate of 14 compounded annually in the past ten years. In addition to this, during the 10-year period dividend has been increased no fewer than seven times, Tennessee has achieved this excellent secular growth trend by means of efficient management coupled with an excellent raw material position. The basic business of the company is the mining and treatment of cc-pper bearing sulphide ores. Sulphur dioxide, -obtained from these ores, is converted into sulphuric acid. Other by-products are copper, zinc, — .. -2- manganese sulphate and a host of others. Tennessee uses a large part of its sulphuric acid production for conversion into triple superphosphate, the most efficient of fertilizers in common use. Since triple superphosphate and other agricultural products account for slightly more than half of Tennessee's net sales, this market should be examined rather closely. Many analysts have tended tu look askance at the fertilizer', business, tieing it to declining farm income. This reasoning is certainly invalid in the case of Tennessee which found it necessary, in 1955, to increase peak triple superphosphate capacity by some 40. The soil bank, which permits farmers to take acreage out of production, is expected to be a stimulus to fertilizer sales as the farmer will naturally wish to increase the yield on acreage left in production. Tennessee, with its excellent rawmaterial position, is by far the most efficient and lowest cost fertilizer producer. Some 30-40 of Tennessee's sales are derived from direct sales of sulphuric acid for which there is a growing market and a host of industrial uses. The steel industry is a major consumer of this product. Tennessee ranks as one of the largest producers of sulphuric acid in the rapidly industrializing Southeast. Because sulphuric acid is a heavy freight cost product, the company's strategically located production facilities give it a dominant position in the expanding Southeastern area. In addition to its basic products, Tennessee has branched out into wetting agents, organic chemicals and other newer products with good margin potentials. A plant for the recovery of uranium from phosphate rock achieved full production during the Fall. As mentioned above, Tennessee, with its excellent record and good potential, is now selling at slightly more than ten times earnings, based on estimated 1956 results of 5.35 per share. These earnings will be achieved on 72 million of sales, a new record for the company. Profit margins over a period of years have been well maintained and have actually increased over the long term as operating efficiency has been added. Expansion over the past ten years has been financed entirely through retained earnings and the company has no debt or preferred stock. The current 2.45 dividend provides a yield. The technical objective for Tennessee is a long term 84-100 with strong support just under current levels. The stock is recommended as an investment of the highest quality with sizable capital gain potential. EDMUND W. TABELL WALSTON & CO.INC. AWTamb

Wdlston &- Co. – – – – I n c . – Members New Yo,'k Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE ISw;t,Id I OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WiRE SYSTEM TABELL'S MARKET LETTER December 14, 1956 After reaching an intra-day high of 498.95 on Monday, the Dow-Jones Industrials declined to 486.03 on Thursday for a retracement of about one- third of the thirty-eight-point advance from the recent low of 460.41. This is the minimum technical correction of the sharp seven-day advance that has carried the market back to within shooting distance of the April high of 524.37 after a successful test of the year's lows. While the ability to hold at a previous support level and rally back to near the previous high is encouraging, it must be borne in mind that the market,as measured by the averages, has held in a trading area for a long time, It has held in the 524-458 range for all of 1956. This is a , trading area'of less-than 13'and is the smallest'perceritage'change-inthe average in anyone year since 1897. It has held in the 524-433 range since June, 1955 or a trading area of roughly 19 from the high to the low. This is also a relatively narrow range for an eighteen-month trading area. All of this brings up the possibility that this trading range may be either a period of major distribution, like 1945-1946, or a period of major re-accu- mulation similar to 1951-1953 or 1946-1949. In terms of the Dow-Jones In- dustrial average, and taking the extremes of each potential,this area has, from a strictly technical an upside potential of roughly 585 and a downside potential of 360 and, of course, the pattern may broaden to in- dicate even wider potentials. It would appear, therefore, very important to ascertain whether we are in a period of major distribution prior to an im- portant decline or in a period of re-accumulation prior to a major advance. However, when I look at the price action of over one thousand stocks, I conclude that neither eventuality is an immediate probability. The tech- nical patterns of individual stocks are a combination of excellent, good, fair, neutral, mediocre, indifferent and poor. The sum of all of these is an average which is more or less meaningless when applied to individual situations. From a speculative trading public viewpoint, and also from a volume viewpoint, the market reached its high in early 1955. Low-priced specula- . -issues 'formeddistributional'patterns'and'have clines. At the other end of the scale, excellent growth issues like the – aluminums, chemicals and papers advanced too rapidly and their price-earn- ings ratios were discounting their very favorable long term outlook at a too high immediate price. These issues formed distributional patterns in the first half of 1956 and earlier. It appears that most of these issues may have reached or nearly reached their downside objectives, but may re- quire a conSiderable period of time to form re-accumulation areas prior to a major advance. They are a buy on weakness for patient long-term hold- ing. While all of this has been going on, many individual issues with good technical patterns because of their favorable earnings outlook,were advancing sharply while other individual issues were declining. Still other issues are just starting what appear to be major advances. The outlook appears to be a continuation of extreme selectivity for possibly all of 1957 with the action of the individual issues of infinitely greater importance than that of the various stock market averages. 'Quite afew issues in our recommended list reached new high terri- tory in the past few days. Among them are Allegheny Ludlum, American Cyanamid, Bristol-Myers, Crucible Steel, Eagle Picher, General Dynamics, General Railway Signal, International Petroleum, Joy Mfg., Glenn L.Martin, Tennessee Corp., Timken Roller Bearing, U.S, 'Lines and U.S. Steel. Even one of-the more backward groups on our list, the airlines, showed definite signs of strength for the first time in several months. While some further patience mayor may not be required, I consider the airlines as one of the most underpriced groups in the market. From a technical viewpOit, they could double in price over the longer term. On our recommended list are Eastern Airlines, Pan-American World Airways and United Airlines. I also like American Airlines, National Airlines and Western Airlines. Due to the Holiday Season, we will issue only one letter over the next two weeks. This will be dated December 26th and will replace the letters of December 21st and December 28th. EDMUND \';. TABELL mnrkct letter 18 not, nnd under n clrcum'lnnce'l 18 to he construed as, nn contlllned herein IS not gunranteed as 10 accuracy or completeness and the II i4lttI3lLlUNluintChllriLfNlJf&rred to herein The Information Infto Sh' 0( not and under no Clrl.umstnnces is to be construed as, n representation t 1st n &. Co Inc or nny Officer Director or Stockholder thereof, rna by Wal;ton & Co. Inc. All cxpre;SlOns of ar;hubJcc\tOt merely as general. cummentary on day to lin Interest In the seculltlCS mentlOne crem ,mnr e the pect to any 5ee\1Iltles referred to herein will be furnished UIJon new find not as n complete analysto. AdditIOnal III orma Ion WI res ., I ,, . ' . . . . . 11 . 1111 'Ie . . . . .

I .F — // Walston &- Co. – – MembeTs New YOI'k Stock Exchange ';/I / NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASlE (Switzerland) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM -T-A-.-EL-L-S–M-A-R-K-ET–L-ETT–E-R—————————————— December 26, 1956 The Industrial average continues to knock up against the heavy over- head supply at the lower part of the 500-524 area as evidenced by the Novem ber high of 500.52, the early December high of 498.95 and today1s high of 500.32. Ability to pass 500 on increased volume would probably indicate th start of a third attempt to push through the upper part of the 500-524 rang Failure to penetrate the 500 level decisively, followed by a decline below mid-December low of 486.03 would indicate another testing of the 470-460 le which has held four times in 1956. ,-'- – –rsc averag'e 1956 has bee an uneventful year. The average opened on January 3, 1956 at 485.78 and on December 26, 1956 the closing average was 496.74, only about 2 above the 1955 close. As has been pointed out many times, the Dow-Jones average does not reflect the true condition of the market. Indeed, if an average could be composed of all the stocks on the N.Y.Stock Exchange,best estimates woul place its current level somewhere around the low of December 1954 when the Dow-Jones was at 390-400, For the first time since 1953, many investors end the year with substantial losses. In the face of this sideways market,this letter has been fortunate enough to make some rather successful recommendations Joy Mfg. and Dresser Industries, which opened in at 38 1/4 and 53 5/8 respectively, sold as high as 72 and 100.Both of th8se stocks appear rather high for new purchase at this time, but stocks such as GENERAL RAILWAY SIGNAL, now 31 3/4, then 25 1/8, and ALLEGHENY LUDLUM STEEL now 62 3/4 then 30, still appear suitabl for long term purchase, TIMKEN ROLLER BEARING (100 1/4), recently recommend by this letter despite a substantial price rise, still appears cheap for ne purchases based on growing earnings from rail equipment sources. It is impossible for anyone to claim perfect success and a number of issues which this letter has recommended have performed rather badly, espe- ancrcially in recent months under pressure from tax loss have-been WESTERN PAC J MJ'WMA COPPER )–AYcurrent depressed prices, these situations still appear to have long term appeal, however. Magma has been having mechanical difficulties at'its new San Manuel mines and has not yet been able to reach full production. Estimates of greatly expanded earninEs should still hold good when the mechanical difficulties are overcome and the copper demand situation permits full output. Western Pacific, essentially a long term situation, has been under pressure due to unfavorable near term results, but the long range picture of expanding earnings power remains unchanged. As has been mentioned before, the outlook for 1957 calls for a tra- ding market exactly the same as that witnessed in 1956. During this period many stocks will continue to outperform the market as did Joy,Dresser,et al The steel and aircraft groups have been outstanding performers in the last few months of 1956 and this performance could well carryon into 1957 as technical patterns in almost all cases continue to point to levels. ALLEGHENY LUDLUM (62 3/4), CRUCIBLE STEEL (34), STEEL (72),GLENN L. MARTIN (43) and GENERAL DYNAMICS (59) continue on our recommended list. -Political analysts have been forecasting an early passage of a Harris-Fulbright type bill when Congress meets in January. If this takes place, it could be of immeasurable benefit to gas pipeline companies as it would,in effect,exempt their PIPE LINE' (52) and NORTHERN NATURAL'GAS (49) Doth recommended list, have recently behaved favorably in anticipation of such passage. f Although the airlines were one of the poorer acting groups during 1956,it would seem that the market must ultimately recognize the generally expanding 'earning power of the major carriers. PAN AMERICAN-WOR;LD AIRWAYS (19) and EAS'I'ERN AIRLINES (51) have both been recommended by tl)is letter. Other stocks for which favorable 1957 may be anticipated are AMERICAN CYANAMID (79) and BRISTOL-MYERS (42), based on new diScoveries' in the field, and EAGLE PICHER (48), BELL & HOWELL (48) ahd HBJITT 7 ROBINS (39). -' EDMUND 1M TABETT f' ff 11 …\O iwy referred to herem The InformatIOn ThiS market letter IS not. Ilnd unner no Circumqlllnces 15 to he construed as, an 0. er se r Ii to be mnstrued as, a reprCBentatwn WOcontained herein Iq not ).IiL,;.ntcct! as to IlCCuracy or completenelS hilt! the the I tOil & Co Inc or any Officer Director Dr Stockholder thereof, may Iby Walston &. Co. Inc All e,,preSSlons of merely as -; general. on day to dal' '''fhneaWvRe alinndInntoetreIslSt (IlnctohmepsleeCteUarnitnileYs!.mIlenAtiUddIt lOlIa In arrnattipOanr weItherespcct tu any seclilitLel leferred to herem '\Ill be furmsheu u,on rc cst \\N JU i e 1 – Itt f f I ,.\