—- —– -;. – .- —. Walston &- Co. Inc. Members New York Stack Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa,ed.,d) OFFICES COAST TO COAST CONNECTED BY DIRECT PIUVATE WIRE SYSTEM TABELL'S MARKET LETTER August 2, 1957 It looks like more of the same. More of the same kind of stock market, that IS, that we have been having for the past fifteen months. More of the same successive little waves of optimism followed by waves of pessimism with the market,as measured by the average not getting very far in either direction. The averages today are Just about where they were year or even almost two years ago. Date Stand. & Poor 500-Stk. Index Dow-Jones Industrials Aug. 2nd, 1957 47.68 505.10 July 15th, 1957 Aug. 2nd, 1956 SAeptfrti.l231r6dt;h-,11'995556- 49.13 49.74 –4458..-8653- — ,- — 'x, 523. 11 523.33 524.37 . vu '.–'''' The recent advance from the February lows after testing, but not passing, the 1956 highs appears to have lost momentum for the time being. From a technical point of view, there have been no signs of important dlstnbutlOn at the recent tops and probably the pre- sent declining phase will halt, at least temporarily, around the 47 level in the Standard & Poor 500-Stock Index and 500 on the Dow-Jones Industrials and will be followed by a con- solidahon and another attempt to penetrate the 1956 highs. Whether or not new highs in the averages are reached is problematlcal and probably not too important at this stage of mar t. From a longer range point of view, I still adhere to the opinion I have held for almos two years. I believe the market is in a broad consolidating area similar to 1946-1949 and 1951-1953. The duration of thIS consolldating phase is uncertain. The 1946-1949 area held fo approximately 40 months while the 1951-1953 phase lasted for roughly 28 months. If we use April, 1956 as the start of the present consolidating area, a 40-month projection would carr to August, 1959 and a 28 -month proj ection would carry to Augu st, 1958. It is, of course, not certain whether the present phase WIll be of shorter or longer duration than the two pre- vious consolidating phases. However, regardless of the time element, it is my opimon that the present consolidating area will eventually be followed by an upside penetration of the area and an advance of equal or greater proportions than the 1949-1951 advance or the 1953'1956 advance. The present consolidating phase has held in roughly the 50-43 range in the S.& P. Index and the 525 -450 range in the D-J Industrials since April,1956. While I expect the averages to remain in these broad trading areasfor some further time,this does not preclude the possibIlity that the averages might reach modest new highs while still re- maining in the broad confines of the trading area. ThIS happened in both the 1946-1949 and 1951-1953 area. In 1948 the averages reached a new high, but again returned to the trading area to broaden it. The same thing occurred in 1952. While the averages have remained in a rather restricted trading area, we all know that many individual stocks have had private bull and bear markets of their own. This will continue regardless of the action of the averages. In my work over the past two years, I ha, tried to concentrate on mdividual issues and have been using the averages as only backgro d There are many reasonably priced issues available. For instance, AMERICAN BRAKE SHC which I mentioned in last week's letter, appears to be a good value regardless of the yields and pi E ratios of the various market averages. Earnings for 6 months on ABK were releas earlier in the week and showed 3.64 a share for first 6 months of 1957 compared with 3. 'n the 1956 period. Allowing for full conversion of preferred by Sept. 30th would bring earn- 'ngs down to 3.37 for the 1957 6-month period as compared with 2.99 in 1956 period. At 52, with at least an anticipated 1957 payment of 2.90, the stock yields 5.5 and sells at onl fibout 8 times anticipated 195-7 earnings of B-. error' in pur report last week in stating that ABK operated at a proflt in every year since 1902 with he exception of 1932. Actually, company has operated at a profit every year. The 1932 deficl was after dividend payments. Actually, a profit of 260,000 was shown in 1932 before divide s. GENERAL RAILWAY SIGNAL (31) also released six months earmngs during the week 957 results of 1. 45 compared with 1. 21 in 1956. Usually, over 6070 of annual earnings pf GRS are shown in the second half, so full 1957 earnings should be at least 3.80 and probably around 4. 00. The stock looks attractive at present levels. EDMUND W. TABELL WALSTON & CO. INC.

Wdlston &Co. – – – – – I n c . – MembeTS New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa,.,Idj OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LEnER August 9, 1957 The averages declined to the lower limits of the first support shelf before they were able to stage the first worthwhile rally since the July highs were reached. The Standard & Poor 500-Steck Index reached a low of 46. 13 on Wednesday and the Dow-Jones Industrials declined to 490.25. It is probable that these lows will hold for the time being and be followed by a slow consolidating period probably for the balance of the month be- fore another attempt is made to penetrate the overhead supply that exists in the 48-50 area and 510-525 area. The past two moves in the market have been sharp and rapid Intra-Day Low lntraDay High Points Intra-Day Low Points June 24th July 15th Advance Aug. 7th Decline ' S & P 500 D.J. Ind. 46.38 492.87 49.41 523.11 3.03 30.24 46.13 490.25 3.28 32.86 The rally from the June lows to the July highs was completed in fourteen trading days and the July-August decline was accomplished in seventeen trading days. On a broader scale, the same alternate moods of optimism and pessimism have been going on since April 1956. In the past fifteen months, there have been eleven advances or declines of 20 points or more in the Dow-J ones Industrial average. Date April,1956 May, 1956 Aug. 1956 Oct. 1956 Nov. 1956 Nov. 1956 Jan. 1957 – 1957 – June 1957 June 1957 July 1957 524.37 463.85 523.33 468.83 500.52 460.41 502.57 516.81 492.87 523.11 Date Points May, 1956 463.85 -60.52 Aug. ,1956 523.33 59.48 Oct. 1956 463.83 -59.50 Nov. 1956 500.52 31. 69 Nov. 1956 460.41 -40. 11 Jan. 1957 502.57 42. 16 Feb. 1957 453.07 -49.50 . June 1957 74 June 1957 492.87 -23.94 July 1957 523.11 30.24 Aug. 1957 490.25 -32.86 Wbile the averages have been backing and filling over the same territory for fifteen months and getting nowhere, many individual issues have had private bull markets and private bear markets of their own. I could fill a page with examples of this, but the reader can pick them out for himself. This type of action will, in my opinion, continue for a long time. It is logi- cal that it should. Earnings on the various averages will show little more than 10 change between 1955, 1956 and 1957. There is no reason why the averages should move very far in either direction. At 50 in the Standard & Poor 500-Stock lndex, or 525 in the Dow-Jones Industrials, the market is valued on the high side on the basis of present earnings and dividends. Any higher evaluation must borrow from the hope of future earnings and dividends not yet realized. At around 40 in the S & P lndex and 460-450 on the Dow-J ones lndustrials, the market is probably valuing the same factors on the low side. Until there is a definite change in the present earnings outlook or in the future earnings outlook, the averages will continue to hold in a broad trading area swayed by temporary changes of optimism and pessimism. The picture in individual companies is different. Some companies are show- ing sharply increased earnings while others are in a declining trend. The stocks of these companies are following their own earnings trends and not the trend of the averages The moral of all of this is that the investor or speculator should be more concerned with the outlook for individual stocks than in worrying about the roller coaster moves of the market. EDMUND W. TAB ELL WALSTON & CO. INC. —

,I Walston &- Co. – – – – – I n c , – Membm's New York Stock EXchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swl.,land) OFfiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TAB Ell'S MARKET LEnER August 16, 1957 The market broke below the anticipated support level of 46.50 on Standard & Poor s 500-Stock Index and 490 on the Dow-Jones Industrials to reach intra-day lows of 45.27 anc 482.10 on Thursday. As outlined in last week's letter, this is the eleventh prIce swing up and down of about 5 or more that has occurred since the market reached its high sixteen months ago in April, 1956. The widest downside swing during this period was the 11 droR froID.ABril February to June. The present decline, at Thursday's lows, amounted to about a 7 1/2 drop from the July tops and is well within the confines of the broad consolidatlOn area. As I have continually reiterated m this letter, since January 1956, I expect this I, consolidating period to continue for quite some time – possibly well into 1958 or 1959. During this consolidating period, like similar consolidating periods in 1946-1949 and 1951-1953, there will be alternate moods of pessimism and optimism. The pessimistic mood is definitely in control at the moment just as optimism was at the wheel from February to July. Over the next year or two there will continue to be wide swings in the broad range of 50-42 in the Standard & Poor Index and 525-450 in the Dow-Jones In- dustrials with the possibility of more testing of both the highs and the lows. In fact, it would not be surprising if either or both the highs or the lows ere penetrated by a few points during the course of the next year or so. It is my conviction that the ultimate decisive penetration of the now sixteen-month trading range will be on the upside. The longer the consolidation lasts and the more swings up and down that occur, the higher the potential upside obJective will be when the breakout ultimately occurs. Obviously, the upside breakout will coincide wi.th an increase in earnings. For the last three years, 1955 -1957, earnings on the Dow-Jones Industrials have centered around 35 a share. theFei.s.. — ,- – market will undoubtedly respond. There is no indication of any important change at the moment. As for the nearer term, the market appears to be in oversold territory. My technical indicator, which signalled a secondary sell signal on August 6th, has been in oversold territory for four days and is'in a position to give a primary buy signal in the near future. As to support levels, the averages are in the middle of a broad sixteen-month trading area and the whole range between today's closes and 44-42 on the Standard & Poor Index and 460-450 on the Dow-Jones Industrials could be considered support. The best use of these technical signals is to point out buying spots for individual issues. There are two schools of thought concerning buying after a decline. The first of these holds that the best opportunities can be found among stocks that have held up the best. The second school advocates the purchase of stocks that have fared the poorest. I usually agree with the first school but when good values appear in the second category, purchase is advisable. In the first category, many issues on our recommended list have acted somewhat better than the general mar-keto Among those that may,be cited-are American -Can, Bell & Howell, Chrysler, General Railway Signal, Houdaille Industries, Ingersoll Rand, U. S. Steel and Western Pacific. In the latter category, Carrier, which reached a low of 44 on August 14th, seems to stand out. Reason for the weakness has been a number of sell recommendations by various financial services. I disagree with most of the conclusions reached by these services, but, even assuming their correctness, it must be pointed out that Carrier is sellmg today at a lower PiE ratio and a higher yield basis than at any time since 1953. For a stock of its growth potential, current price appears low and averaging down purchases are recommended. EDMUND TABELL WALSTON & CO. INC . —

rr. Walston &- Co. – – – – – I n c . ..; r\ Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa,ldl OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER August 23, i957 1 fter reachmg mtra -day lows on Tuesday of 44.74 on the Standard & Poor 500- Stock Index and 474.52 on the Dow-Jones Industrials, the averages rallied back to 45.83 and 488.23. However, all of this advance was lost by Fnday with intra-day lows of 44.43 and 474.81. About the only encouraging feature was the fact that volume on nse of 2,700,000 shares on Tuesday exceeded the down day's volume of 1,500,000 shares and 1,960,000 shares on Thursday and Friday. This decline so far, and almost every de- cllning phase for the past two years, has been brought about by an absence of buying powe rather than an increase in selllng pressure. The market has been in oversold territory f( mne trading days, on a short term basls, but has not yet aro,!sed any gEeat buymg mtereEl It may be necessary to agam test the 43-42 an-d 465-455 level wherestrongbuying intere-s– has appeared on four dlfferent occasions since the start of the 16 -month consolidatmg are, m April, 1956. Stock pnces are the result of four factors. Three of these factors are fundamen- tal and tangible. They are earmngs, dlvldends and money rates. These fundamental fac- tors change rather slowly. The fourth factor, investor confldence, is extremely intanglbl , dlfflcult to measure and subject to wlde swings m both dlrections. Investor confldence, or the lack of lt, lS what causes the same security to sell at posslbly 12 times earnings when mvestor confidence is hlgh and at 8 ilmes earnings when confidence in the future is at an ebb. These psychologlcal moods can temporarily have more effect on stock pnces than the more fundamental factors. Looking at the general over-all pattern rather than indivldual compames, earn- mgs have not showed much change S111ce 1955. Earnmgs on the Dow-Jones Industrials hav centered around 35. For 1957, earmngs are presently estlmated at around 37., pre- suming a plck -up m the fourth quarter. Part of thlS mcrease will be accounted for by sha earmngs jumps by two stocks m the average, Chrysler and Westinghouse Electnc. D1Vl- dends on the industrials were 21.58 in 1955 and 22.99 m 1956. They probably will be a bit hlgher in 1957. There have been no important changes m the two factors since 1955. —Therehas, of-course, -been a sharp mcrease m monerrates' drop- . in bond prices brought about by the tremendous demand for capital expansion money to fmance new plant and new eqUlpment expenditures m order to offset increasing costs and a labor shortage. The hght money pollcy of the FRB is designed to slow down these in- flationary pressures. It would appear from my work that money rates and bond prices will probably stabllize at around present levels, but tight money could have some be- lated effect on stock pnces. Speculahve confidence, as dlfferenhated from 111vestor confidence, has had wide alternatmg sWlngs of optimlsm and pesslmism for the past two years and wlll con- tmue to be subject to the same type of action for a longer penod of hme. Investor confldence has been at a hlgh level since 1955. It has been based on the underlying basls forces of (1) An mcreasing populatlOn wlth increased needs and the income to purchase these needs. (2) 1- labor shortage. (3) 1-1 high rate of capital expendlture necessltated by a need to mcrease produchvity. A 11 of these factors will result m higher earmngs and higher price levels for the common stocks of soundly managed companies. There will be temporary interruphons and restmg spells llke the present 16 -month trad111g area whlch wlll probably contmue for a year or more longer. EDMUND W. TABELL '.ALSTON & CO. INC. This market letter IS not. and under no circumstance'! IS to he construed as, an offer to sell or a soilcltnhon to buy any securitIes referred to herem The mformat!on contained herem IS not guaranteed as to accuracy or completeness and the furnishmg thereof IS not, nnd under no Circumstances IS to beconstrucd as, a repregentatlon by Walston & Co Inc All e(pressLOns of opmlOn are subject to change Without notice \Val&ton & Co, Inc, or any Officer, Director or Stockholder thereof, may hl,,'e 'In mwrest the securities mentioned herem ThiS market letter IS mtended and presented merely as a general, Informal commentary on day to day lIe\H, and nut us a complete analysls AddItIOnal mformatlOn .Ith respect to any secUrities referred to herem Will be furntshed upon request. \\ N 301

– -… … – —. ..—– .. .' Wdlston &- CO.———Inc.– Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swa,IBnd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIR.E SYSTEM TABELL'S MARKET LEnER August 30, 1957 After reaching intra-day lows of 43. 93 on the Standard & Poor 500-Stock Index and 469.03 on the Dow-Jones Industrials on Monday, compared with February lows of 42. 17 and 453.07, the market rallied and, after a testing of the lows on Thursday, closed the week on a strong tone at 45. 2Z and 484. 35.The decline brought the averages into oversold terntory on my technical indicator and a second buy signal was given on Tuesday confirm- ing the signal given the previous week. From a technical viewpoint, recent action has, in my opinion, highlighted two factor The first is that it has strengthened my opinion that the market will remain in the broad 16 -al.ea for a-long-otime.,-po ssiblycfor a -year-oL more .-Just- as cthe-r-e cent failure to penetrate the April, 1956 and August, 1956 highs enlarged the potential top if the l6-month tradmg range turns out to be a major top or distributive pattern, the decline has resulted in the enlargement of the potential base if the same trading area turns out to be a maJor reaccumulation or consolidating area. However, the technical patterns of in- dividual issues appear to preclude the probability of a wide move in either direction for a long time. There are not enough issues with sufficient distributive patterns to indicate a broad general decline nor are there enough issues with sufficient accumulative patterns to indicate a broad general advance. I continue of the belief that the l6-month trading range will continue for the foreseeable future. It is possible that there will be minor pene- trations on either or both sides of 50-42 and 525-450 area. After all, an average is an im- perfect indicator of an ove raIl market. However, I do not believe there will be a decisive penetration of more than a very small percentage in either direction untll well into 1958 or possibly 1959. I also continue of the belief that the eventual penetration of the area will be on the upside. The second factor is the action of individual groups and stocks on the decline. Best ,relative strength performances were turned 111 by groups that hitherto have been relati-vely mediocre performers for the past year or so. In a very broad sense, consumer and con- sum er durable issues resisted the decline and now show up very well on my relative . strength'charts. -This, of course, isf6je expected-as this 1ypeoCcompany is-more aefen- 'sive in nature and would normally be expected to hold up better during a declining phase. However, there is an added technical factor that these groups have built up fairly large 'base patterns over the past year or more and are in a position to witness a fairly strong price advance. It is entirely possible that any advancing tendencies that might take place within the continued trading area will be under new leadership. The groups that fall into this category include food, food chains, retail stores, drugs, cans, baking, finance, arm machinery, cement, glass, and automobiles. It may be that issues of this type may take over temporarily from the capital goods issues. However, there are quite a few capital goods issues that also have above average patterns. The stocks in the growth groups like the chemicals, alum1l1ums, papers, etc., mostly are in the long te- dious process of forming bases. This may take considerable time before it results in any broad upswing, but issues of this type should be added to portfolios on weakness. After a long period in the doldrums, WESTERN PACIFIC (611/2) originally recom- by this letter a year ago, has recently been one of the better acting equities in the rail group. Basis for the recent better action stems from company's current estimate earnings of better than 10 per share before funds will be shown in 1957 vs. a de- 6.29 in 1956. This compares with earlier estimates of 8 per share, and it will represent the only gain of these pr.oportions to be shown by any.major rail in 1957.- Closer examination of recent statements is even more gratifying. Most analysts had agreed tJ-at main attractiveness of WRS lay in the huge amounts spent on modernization n past years. They believed these amounts would payoff in greater efficiency by 1960-62, n;hus allowing increased earnings despite the end of accelerated-amortization tax benefits . . would now appear, however, that part of the fruits of this capital program are already Ibeing reaped. For the month of June, 1957, WRS had reduced its maintenance ratio to 25.50/0. The full-year flgure may be as low as 280/0, a level of efficiency that was not ex- pected to be reached until 1960. Operating ratio in June was 66.60/0 and may be as low as 700/0 for the full year. This could be further reduced to 650/0 with growth in traffic. Ap- these ratios to proj ected 1960 revenues of 65 million would permit earnings of 13-15 per share, making full allowance for the expiration of ta i\lJl'QT;WQ 1)/, xTPbe!inEebfiikts. . ThIS market letter is not, and under no cIrcumstances is to he construed as, nn offer to sell or n sohcltation to buy any sccurVtes re erred to herem The mformatlOn contmned herem IS not Kuaranteed &s to aCCUfIlC) or completeness and the furnlshlnK by Walston & Co, Inc All expressIOns of opinion arc subject to change wIthout notIce Walston hi'e or'1iny-Ci'rfll!et.I.I'Jlrl!l!btoer construed ns, a representatIon or Stockholder thereof, may have an Interest In the securitIes mentIOned herem. This market Jetter is mtended and presented merely as 11 general, Informal commentary on day to day market \ \-n..'.B.n.d.nU.t..B.oo.m.p..t'.Bn.B….' ,.u.,n.''.h'.d.UP.u.n..qu..t.W.N30.' I t \ \\

NEW YORK , Walston &- Co. Inc. MembeTs New Y01'k Stock Exchange PHILADELPHIA' LOS ANGELES SAN FRANCISCO BASLE (Swit,.,l.ndl OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM , ADve-eprta. lSlteores Distilling Food Chains Dairy Farm Equip. Chemical Oils Office Equip. Steel ThIs markt't letter IS not. and under no circumstances IS to he constru,., as, an 0ffer t 0 BeII or a soIIc,o',r,iWlvou'11 k',ob '.\;;m'.'.V. sd',.1;tlt totll.lWflliltrcureedmas Tahreepirnefsoernmtaattiioonn c b ontained h Walston ere & iCnoI S not Inc All as to accurncy or completeness And the furnishing thereof IS of opinIOn afC subJect to change without notIce Walston 't!i.F.lfbt. ;'01 e. thereof' may d t d 'k t an mterest the securltles mentioned herem ThIS market letter 15 llltenJed and presented merei) as a general, mformal commentary on ay 0 aY'VNraOl news (lna not as a complete Ilnlllysls AddItIonal lllformatlOn with respect to tiny 5ecurlhes referred to herem WIll be furmshed upon request

Walston &Co, Inc. Members New YOl'k Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swihl.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER September 13, 1957 The averages tested the August 27th lows on Wednesday and then staged a sharp recov y Wednesday's intra-day lows of 43.60 on Standard & Poor's 500-Stock Index and 467. 10 on Dow-Jones Industrials compare with August lows of 469.03 and 43.93. Friday's close was 44.80 and 481. 02. Selling pressure has apparently lifted enough to permit a further recov y to the 46 1/2-47 level on the S & P Index and 490 -500 on the Dow-Jones Industrials. Recent letters have stressed the probable changing leadership in the market durmg th remainder of the consolidating period which I expect will continue well into 1958 or early 1959. Groups showing the best relative strength action during recent weeks include food -pr-oducts, calf, baking ,'-fertlli'zer7'electroTIicsatitotnobile, retail chain, farm machmery, drugs and soft drinks. Most of groups, it will be noted, are in the consumer or consumer durable field. Some of the relative firmness can be as- cribed to the defensive nature of the industries involved but, on the other hand, many indi- vidual issues in these groups have built up fairly sizable base patterns over the past year or two. From a technical viewpoint, they could stage a good percentage advance. The food chain group, for example, contains quite a few stocks with interesting potentials. I consicle AMERICAN STORES ( 56 ) an attractive issue. Earnings for the 12 months ended March 31st totalled 5.92 and 6.25 is expected for the same period ending March 31st, 1958. The 2 annual dividend has been supplemented by a 5 stock dividend each year since 1953. Also attractive in this group are GRAND UNION CO. (351/8) and WINN-DIXIE STORES (25 / ) Another group showing excellent technical action the electronics lssues. This group has done little marketwise for almost three years, but the technical patterns gest that some of the electronics-TV issues could again assume a more important role during advancing phases. My outstanding favorite is ZENITH RADIO ( 121). The recent out-of-court settlement of the company's S1.lit against Radio Corp. of America will add o cash and an early expected decisicn by the FCC on subscription television systems could be of great mterest to Zemth. It's system is known under the trade name of Phonevision Competition ,has beenintense-in ihe-radio.and. televisionSield, but-in-a-.compacr-atively-bad… Year, Zenith may increase earnings to 14 a share in 1957 as against 12.55 reported tfor 1956. Other attractive issues in this group include MAGNAVOX (375/8) MOTOROLA (181/2) and RAYTHEON (221/8). I also believe the retail store group has interesting !profit potentialities. The group has been dormant for a long time but several individual ssues are showing good technical action. One of the more interesting issues is GIMBEL BROS. (271/4). The stock has held in the 24-31 range for two years. An eventual up- side penetmtion of this range would indicate a sizable percentage. In the meantime the wield is 5.9 and Gimbel is selling at only 7.3 times earnings based on the 3.75 earned or the 12 months ended July 31st. FEDERATED DEPT. STORES (303/4) also appears at- ractive. I have mentioned AMERICAN CAN (441/2) in recent letters and also like LILY ITULIP (64 ) for l,onger term holding. In the food group, my first choice would be GENERt IFOODS (471/2) which has been in a consolidating range for two years. In the automoblle ield, my choice continues to be CHRYSLER (761/4). In the farm equipment field, J. 1. CASE (17 1/2) is speculative but has a most interesting upside potential. — All outstanding situations are not in the favored groups. For example, the rails rave been showing extremely poor action, but I consider WESTERN PACIFIC (62 5/8) an Jutstanding buy (see August 30th letter). I would recommend switching any other rails -Tnhteo Western Pacific. AMER ICAN BRAKE SHOE (471/2) also conversion privilege on' the preferred stock expires on appears most attractive. the iulting pressure of conversion will end. GENERAL RAILWAY SIGNAL (283/4) also built up a sizable potential base as has YALE & TOWNE (3(j 1/8) and BELL & HOWELL I 45 1/2). Would use periods of strength to switch out of issues whose relative strength patterns pave been unfavorable over recent weeks and await periods of minor weakness to pur- ihase the issues mentioned above. t EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not ond under no circumstances 18 to he construed as, an offer to sell 'Of a sohCltatlon to buy any securlhes referred to herein s Idcontained her(lln 18 not g'unrantccd as to accuracy or completeness and the furnishing thereof is not, and under no to /hereof may b Walston & Co Inc All exprel!Slons of OPiniOn are subject to change without notice Walston & Co, Inc, or any ICCI', lrec r or C 0 el' d m'arket an Interest securities mentioned herem This market letter 18 Intended and presented mereh' as a generaj' mf0hal on day to aY'VN 301 neWS and not as a complete analYSIS Additional mformatlOn with respect to any securltlel! referred to herein Will be urms upon reQues .

Walston &Co, —';;;Inc, – Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swawl..d) OFFICES TO COAST CONNEC.TEO BY DIRECT PRIVATe WIRE SYSTEM ,, TABELL'S MARKET LETTER September 20, 1957 Shorter term price declines usually consist of five phases, three declining period intersper sed with two advancing phases. The market, as measured by the avercges, now aI — pears to be in a third declining phase and fifth phase of the down move. ' Low Aug. 27th High Sept. 3rd Low Sept. 11th High Sept. 13 Low Sept. 20 – D. J. Industrials S & P 500-Stock 469.03 43.93 487.59 45.58 467.10 43.60 483.68 45.08 466.75 43.47 Whether the lows were reached on Friday is problematical but the lows will probably be 'in the or 43-42,range which has,been the supportpoinLon five September, 1955 with the exception of the Eisenhower heart attack lows of 433. 19 and 40.8 in October, 1955. For the past three weeks, this letter has tried to point up what appears to be an intermediate term change in the character of the stock market. We have tried to demons- trate that market leadership may be shifting from the capital expansion stocks, which hav been market leaders since 1953, to consumer goods equities, which have, for the most par done comparatively little either in the bull market of 1953-56 or in the consolidating mark 1 from 1956 to date. During this three-year period many consumer goods have built up rath r substantial potential bases, which, if penetrated on the upside, could point to considerably I higher levels. Based on the fundamental outlook, these higher prices might well be justifi c. Basically, the Ame rican economy depends mainly on the consume r. The machine J of the economy is geared, either directly or indirectly, to satisfy his wants. In order to satisfy the terrific expansion in demand which will occur. over the next decade, industry has, over the past five years, embarked on the greatest expansion in its history. Billions of dollars have been put into the capital goods needed to create increased productive capa- city. This has, of course, sharply improved the earnings of the capital goods producers, the makers of machinery and other capital items. Meanwhile, temporary excess capa- city consuIIler industries has cauped Rressure on Rrofit ma;gins and retarded any increase in earnings. This has, of been reflecteifin share prices.- From September 1953 to August 1956, Standard & Poor's Index of capital goods stocks advanced 141 while the consumer goods index advanced only 76. As the business boom grew apace, government authorities have taken steps, via tight money, to curb it. Some of the effects of these steps are beginning to be felt. Back- log of capital goods companies are, in many cases, down. Earnings are increasing at a lesser rate or hOlding, or decreasing mildly. Prospects for some capital producers stocks are, therefore, somewhat dimmed. They probably will not go much lower, but chances for sizable price appreciation appear not too favorable over the nearer term. What effect will all this have on companies producing or selling direct to the consumer The answer is – very little. Total personal income continues to reach to new highs each month. So do wage and salary receipts. Retail sales have continued to reach new highs. There appears to be little indication that the demand for consum er goods will not at least continue at current high levels and perhaps rise moderately. Meanwhile, as demand rises, excess capacity can be utilized. Heavy costs con- nected with large capital expenditures will, to a great extent, be ended. A perfect exam- ple is found in the retail trade industry where store chains have expanded sharply over the past few years. Heavy start-up expenses are already beginning to moderate in many c'ompanies. Thus, as sales continue-to improve, profits will also improve moderately. It is worthwhile to note that, as consumer incomes rise, a larger and larger portion is spent on so-called luxury items. Thus a very slight uptrend in consumer disposable income can be multiplied heavily in retail, appliance, auto and other consum er sales. Thus, improved profits seem likely in many cases, not 'only for 1957 but in 1958 and beyond. There is, in addition, ample evidence that the bright future has not already been discounted. Many consumer goods companies, due to their lack of growth over the past few years, are priced most reasonably in relation to earnings and are, in many cases, affording generous yields from well-covered dividends. Thus, in a mixed market, a large detree of downside protection is present. A number of consume r stocks suitable for purchase were mentioned in last .—— ——

NEW YORK -W–a-lIsntoon.-&-reo. Members New York Stock Exchange PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Swaml.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE wiRE SYSTEM TAiEllo'S MARKET LEnER September 27, 1957 In January, as is usual, I issued an annual forecast of the outlook for the to,, market in 1957. This was published in an article in the Commer cial & Financial C-.. nicle which said, in part, .. My graphs on the Dow-Jones Industrial Average indicate a rather wide potential on both sides of the market… Graphs of individual issues show a probable continuation of the diverse price movements that have been the pattern over a considerable period of time. The technical patterns of individual stocks are a combination of excellent, good, fair, neutral, mediocre, poor and un- favorable. Thesum these is an average that is meaninglesswhen applied to individual issues. This diversity is not new and it will most likely continue for the foreseeable future. In view of this probability, I envisage neither a sharp ad- vance nor a sharp decline, but rather a wide trading area in the Dow-Jones Indus- trial Average . My projection would be 530-430 with individual issues showing both above and below average price action. So far this prediction has proved valid. The high of the market, reached in July was 522.20. The recent decline failed to carry the rna rket much below the February low of 453.07. Wednesday's low was 452.19. Since then the market has rallied to reach a high of 462.40 on Friday, but closed at 456.89. So far, the February low has held, but another testing is to be expected. If the test fails, the average could decline to somewhere around 430. The reason for the market weakness has, of course, been uncertainty over the business picture. This uncertainty has, in turn, been caused by the Federal Reserve policy of credit restraint over the past two years. It must be remembered that credit manipulation normally takes some time to operate. Thus the full effect of tight money will not be felt until 1958. Conversely, even if the Fed were to ease money now, the effect would probably not be felt for at least a year. thisconnection–themain–obrective of the investor should be to purchase securities where values are sound and where earnings can continue to move ahead inithe face of a mild business decline. For the past month the letter has been proponing the theory that stocks of this nature can be found in the consumer goods category and that portfoliOS should be drastically revised in order to give heavier representation in this group. Among groups in the consume r goods field which have shown above average price action are the following, listed together with recommended stocks. Autos – (Chrysler) Baking Electronics-TV (Zenith, Magnavox, Motorola, Raytheon) Farnn Machinery – (J. 1. Case) Fertilizer Finance Food Chain – (American Stores, Grand Union, Winn-Dixie) Food Products – (General Foods) Glass Retail Chain – (Federated, Gimbel) – Soft Di'ink Tin Can – (American Can) Tobacco Utility Currently, portfolios should largely consist of stocks in the above mentioned groups, plus others recently added to our recommended list. Other especiaJly attract- ive stocks include American Brake Shoe, Western Pacific, Lily Tulip, Bell & Howell, Bristol Myers and Houdaille Ind. A portion of both investment and speculative port- folios might also be committed to bonds, both straight and selected convertibles, as these securities will be the first to benefit from any relaxation of the tight-money polj GJT Tl'llB market letter IS not, Ilnd under no circumstances IS to be construed ns, an olter to sell or W'i 5cffii\!E3'.E'rrld. to herem The mformation is not jfUaranteed as to accurac) or completeness and the furnlshmg thereOf IS not. nnd \uIJer no clrcurritianccs IS to'Se'construed as, a representn tloIl1hYV'tYJilslblSiilJCo, Inc All expressIOns of opinion are subject to change Without notW Ape ('tlIfIj Stockholders Ilnd Emp\oyf'cS thereof, purchase, R(.11 and may hnve lIl\ Interest m the securities mentioned het'em merely liS Il generlll, Informal eommentary on da)' to day market new.. und not as a complete analYSIS AdditIOnal Information \\lth respect to an)o seCUrities referred to hereIn v.1!I be fUllllshed upon re'lue't, \\x 301

Walston &Co.——–Inc.– Members New York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO BASLE (Switml d) OFFICES COAST TO COAST CONNECTED BY OIRECT PRIVATE WIRE SYSTEt.4 TABELL'S MARKET LEnER October 4, 1957 After reaching a high of 468.15 in the Dow-J ones Industrial Average on Wednesday, the rna rket reacted to a low of 460.71 on Friday. Comparable figures in the Standard & Poor 500-Stock Index were43. 39 &42. 66. Market action still appears positive and constructive, but further backing and filling in between 450 and the supply at 470 appears indicated. A downside penetration of 450 would indicate 430 and an upside penetration of 475 would indicate 490. Neither probability appears likely at the moment, although the market may build up a base for a fairly significant upside move later on in the year. Meanwhile, individual stocks show diverse action. Many stocks in the consume r goods group, which this letter has favored over the past month, have performed very welL Other groups, such as the paper industry, show improving relative strength onde- clines, thus indicating that long term bottoms may be at hand. Concentration on indivi- dual groups and stocks will remain the key to investment success. ', 'c GIMBEL BROTHER S Current Price Current Dividend Current Yield 26 5/8 1. 60 6.10/0 This letter has recently pointed out some of the favorable characteristics of retail store stocks in the Funded Debt 4.50 Cum. Pfd. Stk. Common Stock Sales – 1957-E Sales – 1956 54,912,307 107,137 shs. 1,954,600 shs. 375,000,000 350,897,920 current market. We have pointed out that consumer disposable income is expected to rise to around 295 billion in 1957, a 30/0 gain over the 1956 figure. We have also pointed out that, so far in 1957, retail sales Earn. Per Sh. 1957-E 4.00 Earn. Per Sh. 1956 3.60 Mkt.Range 1957-56 283/4 – 23 1/8 Note Sales and earnings figures are for fiscal year ending the following J an. 31st. are holding at around 50/0 above the 1956 figure and current prospects point to the largest Christmas sales in history taking place this winter. On this basis, favorable earnings comparisons for many department store chains are virtually assured. Added to this favorable outlook is the fact that due to lack of growth in earnings in recent years, department store stocks have advanced very little from their 1953 lows and are currently available at extremely generous prices in relation to earnings and dividends. Indeed, for the nine stocks in the S & P Departm ent Store Index, the average yield was 6.40/0 and the average P /E ratio 9.3. This lack of growth, however, has been due to heavy start-up expenses in connection with new branches, a factor which is ex- pected to become less important as time goes on. One of the most attractive stocks in the retail trade group appears to be GIMBEL BR01HERS, which is now statistically even cheaper than the average stock in this de- pressed group. The reason for the relatively low price to earnings ratio accorded GI is ostensibly the erratic earnings record shown by the company heretofore, plus the heavy proportion of debt in the company's capital structure. It can be argued that Gl's recent aggressive program of expansion into the suburbs now makes it far less subject to cyclical fluctuations. In addition, although debt is heavy, Gimbel has not followed the usual industry practice of selling its land and buildings to a real estate subsidiary. Thus, on a consolidated basis, Gimbel's capital structure is probably fully as conservative as that of the average department store company. The company's growth record can hardly be slighted. Since 1951, it has shown a steady growth in earnings from 1.59 per share to 3.60 per share in 1956. It has furthermore improved margins substan- tially during this period as more high profit suburban outlets came into operation. 1957 sales are expected to set a new high at around 375 million and per share earnings should reach the 4 range. Currently priced at only 6 1/2 times anticipated 1957 earnings, with a further improvement expected for 1958, Gimbel appears to combine substantial price appreciation prospects with generous yield and defensive value. The current 1. 60 dividend provides a 6.10/0 yield and this dividend could well be increased as earnings continue to improve. From a technical point of view, the stock has a long term upside obj ective of 45, with Sl'FF9'F JHIi unag. g,UPF9Rt lQUQ.tl!ilu It is P8eeRlRlF1S8e. fSI pen in both incornc gllQtnolld Qldlf!l N'I m4qzpstances LS to be construed os, an offer to sell or a soliCitatIOn to bu) any seCUrities referred to herem The mformatlOn twn 8.. Co, In.- All expressions or completeness and the \llJl of OPiniOn are subJC'ct to change-WMidUt'r1'cnibt'\\'\'sfon &J;-ect-'trld'-;'irltd IS to be construed as, a reprcsentnOfficer'!, DIrectors, Stockholders and A 11n'lnhtl llurcha!oe, sell and may hR\e an mterest In the secuntlc'l IHtrJ..mJi!.I;J\-Mientllry on clay to day market nev.S and not as a complete and presented n'l a an)' securIties referred to hcrem he flll'nlshcrlllpon \\-.. 301 2