NEW YORK Walston &Co. Inc. Members New York Stock Excha.nge SAN FRANCISCO LOS ANGELES PHILADELPHIA OffiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER July 3, 1958 The averages have again rallied back into the heavy overhead supply area at 480-520 in the Dow-Jones Industrials and 45-49 in the Standard & Poor's 500-Stock Index. The highs for the week were 482.26 and 45.53 as compared with the June ,I \ 17th highs of 482.11 and 45.57. I am of the opinion that the general market averages will not push through this heavy supply of stock on the first attempt and some backing away is needed in order to enlarge the base and build up sufficient momentum to ab- sorb the overhead offerings. This may take considerable time and result in a continued broad trading area in the averages. ''If the'market-is to 'continuein- a broad trading'area 'for the-4'oreseeabl-efuture;-' -. the wise course is to ignore the averages as much as possible and concentrate on in- dividual issues with a combination of an attractive fundamental background and a po- tentially constructive technical pattern. The issues below seem to meet these quali- fications and probably will be added to the recommended list at what I consider the proper timing from a technical viewpoint. AMERICAN DISTILLING (34 ) is one of the largest of the independent distillers. Distilling stocks, in general, have shown improved relative strength of late as investors have recognized the fact that population figures favor growth in liquor consumption over the next decade. American Distilling has one of the best technical patterns in the group with an upside obj ective of 45-47 and support at 29-26, just under the current market. The company's emphasis on popular priced brands has enabled it to increase sales during the current recession, and earnings for the six months ended March 31st were 1. 85 a share vs. 1. 63 in the Earn- ings for the fiscal year to end this September ih – 4.00 range, and the current 1.60 dividend could be increased tl n t ure. The stock is selling well below the indicated book value of 4 a sha . -F-EDERAL…P-AP-ER BOAR boxboard, converting around one-h t . .9f folding 0 cartons. Acquisitions in recent years have benefited the product line. The lat t of t s integration and broadening of the q sitt.)tts is Federal Glass Company, a producer of low-priced hou e I r. hough earnings will probably be off slightly from the pro for 9 ,the 2.00 dividend is well covered and affords an excellent yield. St s ca ,the stock is selling at around nine times average earn- ings for the past five s and future growth of convenience packaging should provide for increase in ear gs over the longer term. The stock has an upside objective of 50, with strong support just under current levels. GIMBEL (29) has been engaged in an aggressive program of suburban store expansion and modernization with additions to property in 1957 totaling over 7 million. Suburban stores were opened in Bayshore, Long Island; Upper Darby, Pennsylvania; North Hills Shopping Center, Pittsburgh; Springfield, New Jersey and Stamford, Connecticut. A shopping center outlet in Milwaukee is scheduled to be opened shortly. The expansion of facilities has caused pressure on profit margins and earnings for the second quarter were down to 26' per share. A moderate decline in full-year earnings, perhaps to 3.25 from 3.69, may be in prospect, but the enlarged sales base should produce ….better earnings to come. The 1. 60 .dividend, which provides a 5 .5l'ayield, does not ap—pear in jeopardy and the stock has an excellent technical pattern with a possible upside objective of 43-45. PARAMOUNT PICTURES (41) has appeal as a special situation based on the eventual liquiClation of its surplus assets, for the most part old movies together with some real estate. The company has already sold its pre-1948 film library for 50 millio payable through 1973. The first payment on this sale amounted to 3.69 per share after tax. Paramount will ultimately receive close to 20 per share from this source, and it can be assumed that post-1948 films are worth equally as much, if not more. Meanwhile, the 2.00 dividend is covered by operating earnings which should be up in 1958 from the 2.47 shown in 1957. The stock has a possible upside objective of 60, with good sup- pOI t at the 36-35 level. E.nMTT'U TH 'T'A '0 T ThlK mnrkellc\tcr IS not, and under no clrcumstnnees IS to he eonstrued as, an offer to 1LIlW.l .. to herem The informnl1on is not guaranteed os to accuracy or completeness and the furmshmg tbl;l;C\j;f is IS to be construed us, n rcprcsenta- .I.(jnn hyWiiljton & Co. Inc All e'CpresslOns of OPInion arc suh)!!'Ct to change )o,mployees thereof, ;ell and may nn Interest In the securities mentlOncd herem r an IS murke 0c Qfficers, Dlrectora. Stockholders and let r IS m en eJ and prC'lcnted merely nil n general, mrurmnl cnmmentllry on rlny to day mnrket ne\\-s and nnt as a complete nnalys!''' Additional mformntu.n With respect to any secunbes referred to herem \\-111 be rm upon rCluCl \\ 101 , – – –,……

NEW YORK Walston &- Co. Inc Members New YOk Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S MARKET LETTER July 11, 1958 The market closed the week on a strong tone with the rails showing particular strength. The Dow-Jones Rail Average reached a new high of 122. 74, as compared with 120.44 on June 17th. The Industrial Average also advanced into new high territory, but the heavy overhead supply existing in the lower third of the two-year 525-460 range is slowing the pace of the advance. The June 17th intra-day high was 482.11 and the average reached only 483.76 on Monday and 484. 23 on Friday. While the industrials are deep into a supply area, the rails are still below the comparable 138-180 range,and,therefore, finding it easier to advance, as witness the past month. –' . around present levels. The advance from the October lows has lasted almost nine months and the average time duration of the first advance after a major decline like that wit- nessed last year is eight and a half months. Also, the Industrial Average has recovered about 60'70 of the decline from the 1956 high to the October 1957 low. This is also about average. This added to the fact that the In dustrial Average has a heavy overhead supply of stock to penetrate makes the possibility of a decline more probable. However, at present writing, the market gives no indication of the probability of a sharp decline from present levels. If such a decline occurs it will, in my opinion, take more of the form of consolidation rather than a sharp decline with the Industrial Average drifting down to the 460-450 level. Percentagewise, this would be rather mild and might have little effect on many stocks. As I have stated before, I believe the general market will continue a broad ac- cumulation similar to 1946 to 1949 for a long period of time. Different groups are in different stages of their accumulative patterns. Some are edvanced and some have just started, while others may make new lows te ation begins. Therefore, under such selective conditions it would .sa 0 concentrate new purchases on issues in groups that appear to be nearNl1Ei star to avoid those issue.'U!l.-grouRs . mM advancing phases and bas.e. o,ut. ' .. , Some of the-g'roups that appar- – 'e I -7 ced stage of accumulation, derlined are already in my re ome of the others may be added during market declines. – e c i ' s, Pan American World Airways, United Airlines. BUILDING MATER m e, National Gypsum, Gupsum. COAll Pittston Co. CONTAINERS Amentan , Anchor Hocking, Container Corp. and Lily Tulip. DEPARTMENT Federated Dept. Stores, Gimbel, Marshall Field, May Depart- ment Stores. FERTILEER. Amencan Agncultural Chemical, International Mmerals & Chemical. FINANCE' Family Finance, Household Finance. LI;'UOR Amencan Distilling, Schenley. MEAT PPCKING Wilson & Co. MOTION PICTURES Paramount, Twentieth Century-Fox. NATURAL GAS El Paso Natural Gas, Northern Natural Gas, Panhandle Eastern. – -OIL British Petroleum, Cities Service, Getty 011, Gulf Oil, Phillips Petroluem, Royal Dutch, Shell Transport, Socony Mobil, Standard Oil of Calrfornia, Te xas Gulf Producing. . . PAPER Paper, Kimberly-Ciark -Mead Corp', -Union Bag7'West Virginia Pulp & Paper. PHOTOGRAPHY Bell & Howell. RADIO-TELEVISION Zenith. TOBACCO PhIlip Morris. I would use the above issues as a buying lrst if a decline in the general market occurs. Groups I would avoId would include Aluminums, Automobiles, ChemIcals, Electrical Machmery, Machine Tools and Rubber. EDMUND W. TABELL ThIS market letter 15 not, Ilnd under no CIrcumstances 15 to be contrued as, an offer to ,RYI to herem The mformation contained herem lS not guaranteed as to accuracy or completeness and the furnlshml'! thereor IS not. and under no Circumstances IS to be construed ae, a representa- tIOn b. Walston & Co.. Inc All expressions of opmion are subject to chan)!e Ithout notice 'Valston & Co., Inc. Bnd Officers, Dircctors, Stockholders and thereof. purchae, sell and may ha\'e an mterest in the securities mentlOnoo herem Thls market letter IS mtended and presented merely as a general, mfurrnal commentary on day to day market news and not as a complete analYSIS Addlt10nal mfOrmat10n WIth respect to any seCUritIes referred to herem wlll be f111 mhed upon request \\.. 301

———- – – NEW YORK W—a-lsItnocn.&–C-o-. Members New York Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFfiCES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO fABELL'S MARKET LETTER July 18, 1958 As war clouds loomed over the Middle East, the stock market gyrated sharply last week reaching a high of489.89 on the Dow-Jones Industrials and 46.09 on the Standard & Poor's Stock Index on Friday. At a time like this, when nervousness and excitement is reaching a peak, the best course for the market technician is often to take the detached view provided by his charts. A study of market graphs, entirely apart from the Middle East situation, leads to the same conclusions which have been re- iterated in this letter over the past month. The Dow-Jones Industrial Average is still bumping against the heavy overhead sUrPly that exists between and 520. It remains extremely doubtful that the market able-to push through-thiS supply at -As -ofthis;riting,p-racticallyno tops have been formed, although further action around these levels could build up a broad distributive area. There seems to be no indication that the policy of buying stocks of favorably situated industries on minor weakness and of using strength to dispose of unfavorable commitments should be altered. As has been mentioned in previous letters, some market leaders over the nearer term may be stocks that were laggards in the 1949-1956 bull upswing. Among these leaders may be the department store stocks which, for the most part, have shown little in the way of either increased earnings or favorable market action over the past decade. The years since the war have not been easy ones for these companies. Although consumer disposable income has increased sharply, the percentage spent on non-durable goods declined from 55.1 in 1947 to 46.4 in 1956. Meanwhile, the shift to the suburbs put heavy pressure on downtown stores and necessitated the building of suburban outlets, causing heavy startup expenses. ThuE, total net income department 1t7..stores showed practically no change from 1948 to is l'aMJof owth led to com- paratively desultory market action and the stocks e I 'ng companies held in relatively narrow trading ranges during the periq'q.v.J\ The net result of all this is that been-formed,,,.,Moststoekschave-not- e-t ing companies, Federated De art t have already done so. Relati a1 accumulation bases have K- – s (Bl d May Department Stores (42), W'9' others is improving and it is possible that they may break out on hus, a favorable buying opportunity is presented. This co ated improvement in the fundamental background for the industry. c an be made that a major shift in consumer spending habits is taking plac a at the percentage of disposable incomes spent on non-durabl goods may increase. is percentage increased slightly in 1957 and will almost certainl increase further in 958, marking the first time since the war that it has risen two years in a row. With the maJor stores having completed their expansion programs, it is possible that some of the heavy pressure on profit margins will be relieved and that the retail companies will be able to show an earnings improvement paralleling the expected future rise in consumer income. Since the stocks are, in general, priced cheaply in relation to earnings, and provide generous yields at current prices, the fundamentals for a worthwhile advance seem to be present. Listed below are a few of the major com- panies in the field, together with breakout points and upside potentials which would be effective if these breakouts are reached; Stocks Current Price Upside Breakout Upside Potential Allied Stores Associated Dry Goods Federated Dept. Stores Gimbel Macy Marshall Field May Dept. Store Already Broken Out. 44 35 41 28 33 38 42 – 48 – -36 32 36 39 57-66 47-50 52-59 43-45 48 50-65 58 One or more of these companies will probably be added to our recommended list when the time appears most propitious for new buying. 10; not. nnd under no Circumstances 18 to be construcon a9, un offer to a1s tu Ion ' to herem The mformatIon IS not us to or completeness nnd the furnlshmg J, tHIll loy Wnlston & Co, Inc All expressions of opinIon nre 6ubJc('t to chonge wlthoWt whffibJln cb- 'ill' i9 to be constlued as, a reprcsenta Stockholders and Elllllloycl.''1 ttwrf'OC, plllchnse, sell and may haH' an Interest In thc 8cclIritH!9 mentioned helem ThIS market letter IS mtcnded Iud rrcscnted meTely a'J a geneTal, IlIf. mill ('ommentnry on (jay to day maTket news and not as a complete analYSIS Addlttonal lnformatlnn WIth Tespect to any securlbes reCeI red to herem Will be fllllllth,d up.m request \\;\ 30J …. –

NEW YORK Walston &Co. —–Inc —– Membe.-s New York Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM CHICAGO TABELL'S'MARKET LETTER July 25, 1958 The occupational disease of market letter writers, one to which we must plead partially guilty, is a compulsion to talk about the stock market in terms of the Dow-Jones Industrial Average. In this connection it would be very easy to compose a long letter abou how the average in crossing the 500 level on Friday is running into the overhead supply at 480-520, and how at least a minor correction from these levEls should be required. Such a discourse would be perfectly valid, but it detracts from what is, after all, the main function of security analysis — to find securities which appear undervalued from a funda- mental viewpoint and which appear technically ready to show positive price action. these lines;–the following tabulation-may'be ofinterest.- It divides,the mar- ket,into'the four major phases which have existed from August 1956 to the present day. (1) ,The decline from 523.33 to 453.07 in February 1957. (2) The rise to 523.11 in July 1957. (3) The decline to 416.15 in October 1957, and (4) the rise to an intra-week high of 502.64 this week. each of these phases the percentage change in the Dow-Jones Industrial Aver- age is listed together with tHe percentage rise or fall of the three best acting industry groups as measured by Standard & Poor's Industry averages. For the two advancing phases, the three worst acting groups are also tabulated. Table I August 1956 – February 1957 Dow-Jones Ind. Aver. Aircraft Mfg. Agricultural Mach. Machinery, Gen'l – 130/0 50/0 – 1 – 1 Table III July 1957 – October 1957 Dow-Jones Ind.Aver. Cigarettes – 20lo 7lo 4lo 4lo Table II . -J r -''1'957 J' euruary ' – u y l\- Do'-JOnes Ind. Aver. 150/0 Business & Off. Equip. BElectrical – \). yo ,\y ('Y Oil — — — – — Agricultural Mach. 1 Air Transpcrt – 10/0 Cigar ette s – 1lo 2 … J;957 – Jfti-r23-J!'l58 IndAwer.' 210/0 Utilities 310/0 Ci gqrettes 290/. –/–Radio & TV 28lo — — — — — Aluminum 2lo Electric!al Equip. Autos I 40/0 5lo The above tables give rise to some interesting assumptions. Let us assume that Investor A had been abiilllutely correct in predicting the course of the Dow-Jones Average since l;;tos.t bought at the absolute bottom and, in addition, sold short at the absolute top on evefy one of the major moves. Unfortunately, however, he was so busy' guessing the averages he did'not have time to try to pick the right stocks and was unlUCKY enough to divide his investment among the three worst acting groups in the bull marketS and the three best acting groups in the bear .. Resp,ite the hI called' every market turn ,correctly, his would have e'trty the period. -Investor 'B;on'the'other'hand, forgot about the market and–concentrated-only on -'- buyin,g the groups he lon.g the entire perio Desplte the fact that the ,.&omts 'et' day he started, his capital has m-a-l-agecl-4e in years. It is obvious that the two above instances represent extremes which are unattain- able. They nevertheless pOint up the fact that a good deal of energy is wasted in predict- ing the course of the averages which could more profitably be devoted attract- ive stock commitments. In the type of market we foresee for the it can be expected that this will continue to be the case. EDMUND W. TABELL WALSTON & CO.INC. market letter is not, and under no circumstances IS to be construed (lS, an offer to sell ot a sohcltntlOn to buy any aecuntlecJ referred to herein mformatiOn ('ontnmed is not gunranteed as to accuracy or completeness and the thereof is not, nnd under no ClrC\lmstances is to bc construed as, a representa han by WHiston & Co. Inc All epresslons of OPlmon arc subject to '\Ithout nOlice Walston & Co. Inc. and Officers. Directors. Stockholders and Empioy('Cs thereof, purchH'Ic. sell and mH)' have an Interest In the securities mentiOned herem Thl'l market letter 18 Intended and merely as a general. lnfnrmnl commentary on dH) to day market news Rlld not as a complete anah'sis AdditiOnal Information with respect to any securities referred to herein Will be fllrnlllh((1 upon r e q u e s t . ' 'YX 301