'Valston &- Co. / / INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OFFICES COAST TO COAST .A.NO OVERSEAS TABELL'S RECOMMENDED LIST January 5, 1966 . TI1i!redition' bf ou'i' Recommended List tallies the price performance of all recommended stocks over the past year. As usual, the list is divided into three categories Quality and Long Term Growth, Price Appreciation, and Speculative Price Appreciation. Included a t the bottom of the tabulation in each category are all stocks on the list on December 31, 1964 which were removed during the year 1965. Thus, the list below covers only stocks on our recommended list a year ago and all stocks recommended during the year. The first column shows the price as of December 31,1964, or on the date the stock was first recommended, if later. The second column shows the price on December 31,1965, or on the date removed if the stock is not now on the list. The third column shows the percentage change, and the fourth column shows the percentage change in the Dow-Jones Industrial Average during the same time period. The tabulation speaks for itself. In the Quality and Long Term Growth section the average appreciation is 6 vs. 9 for the Dow. In the Price Appreciation section the average appreciation is 25 vs. 9 for the Dow, and in the Speculative Price Appreciation section the average appreciation is 49 vs. 9 for the Dow. For the entire list taken as a whole the average appreciation is 29 vs. 9 for the Dow. These summaries are, of course, not meant to imply that such results could have been obtained by purchase of issues in the recommended list, or that similar results will be obtained by purchase in the future. Commissions are, of course, not included. QUALITY & LONG TERM GROWTH Price 12/31/64 or date Recom. Price 12/31/65 or date Removed Alum. Co. Amer. 71 7/8 765/8 American Can 43 55 5/8 Amer. Tel & T. 9/7 67 , Chesa. & Ohio 9/7 73 3/8 ;. Guff Oil 58 1/2 60 3/4 77 7/8 58 Inter'l Paper 6/29 31 30 3/4 Nat'l Cash R. 5/21 88 3/8 77 1/4 Radio Corp. 7/6 34 1/8 47 1/4 Reynolds Tob. 38 7/8 44 Royal Dutch 45 3/8 42 1/2 General Elec. 93 1/4 120 1/4 Norfolk & West. 132 1/8 127 AVERAGE Change 7 29 – 10 6 -1 -1 – 13 38 13 -6 29 -4 6 Change DJIA same Time Period 5 11 — 7 7 11 15 5 11 11 11 7 5 9 Current Comment Buy for Obj. 79 – Support 50 Hold. Support 58 Buy for 102-150 Buy for 63-92 Buy on dips. Obj. 72 Buy for 144-188 Hold JBuy-Dips. 52 wouldind 112 Buy for 82 Removed from list 10/11' Removed from list 9/27 PRICE APPRECIATION Price 12/31/64 or date Recom. Amer. Hosp. S. 6/29 25 Amer. Potash 6/29 39 Atch. Top.S.F. 33 1/8 Beaunit Corp. 37 Cenco Instrum. 1/29 29 3/4 Clevite Corp. 40 7/8 Cluett Peabody 60 3/4 Copperweld S 26 3/8 Crowell- Collie r 25 1/8 Denver R. G. 21 3/8 Disney, Walt 45 1/2 Price 12/31/65 or date Removed 39 3/4 43 1/2 33 1/4 45 3/8 37 3/8 51 3/4 78 7/8 31 3/4 43 20 3/4 59 1/4 Change 59 12 – 23 26 27 30 20 71 -3 30 0/0 Change DJIA same Time Period 15 . 15 11 11 7 11 11 11 11 11 11 Current Comment Hold. Buy-Dips. Obj. 60 Buy for Income Hold for 60 Hold Buy for 63-100 Hold Hold for 52 Hold for 64 Hold for Income Buy for lHl This Bulletin 11 pt.luhsherl for \our l'onm …n('c lind mforml.tlon Rnd I not un to ….1 n 51111.'lt.ltlOn to I,u\ IIn\ ,,h……as obtfl.lned Clom …. 1.' to I.. 1.,fllll,le, hut 'e do not It! nCUrlC'\ \\'R(sfon K Co In….in ..1 lhL' 'InrUllIl.ItlnrJ or.. ,hl lon,, .'mpl.,\t't 111,1\ hnvc mterelSt In or Jluld'l,lH IIUt! ,ell the ….(,11 …1 to ..herein ,I Walston &Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal and Commodity Exchanges OFfICES COAST TO'CQAST OVERSEAS TABELL'S RECOMMENDED LIST r PRICE APPRECIATION (Continued) Price 12/31/64 or date Recom. Eato'n Mfg. 43 1/4 El Paso Nail Gas 22 5/8 First Chart. Fin. 24 1/8 Gen'l Dynamics 35 Illinois Central 51 1/2 Inter. Motor F 6/29 28 Kansas City S. Koppers Co 44 1/4 55 Korvette 40 McDermott, J.R. 37 1/2 McGraw Edison 25 1/2 Metro-Gold. M 3/1 41 Perkin- Elme r 6/29 48 Revlon 5/3 45 1/8 Reynolds Metals 34 7/8 Riegel Paper 21 3/8 Schlumberger 71 Scovill Mfg. 36 7/8 Shell Oil Co 59 1/2 Signode Corp. 27 1/4 Southern Rwy ,57 3/8 Sundstrand Corp. 20 Swingline, Inc. 37 1/2 United Fruit 17 5/8 Wallace & Tier. 8/2 32 Warner Br.Co. 4/5 33 3/4 Clark Equip. Elec. Storage B. Fruehauf Corp. Inter. Min. Chern. Litton Ind. 2/19 Lykes Bros. Metromedia, Inc. Midland-Ross Newmont Mining North Amer. Car Rayonier, Inc. Stevens, J. P. Storer Broad. U. S. Plywood Vornado, Inc. AVERAGE 50 46 5/8 30 1/4 38 86 23 7/8 40 1/4 36 3/4 45 29 1/2 40 5/8 43 5/8 49 43 1/4 30 1/8 Price 12/31/65 or date Removed 60 1/2 19 3/4 22 5/8 56 3/4 69 1/2 35 3/4 43 7/8 61 1/8 26 118 54 1/2 39 46 3/4 79 3/4 43 1/4 49 3/8 22 1/8 70 63 1/4 64 3/8 33 57 7/8 36 1 4 60 3/4 32 1/4 42 1/2 40 1/4 45 1/4 48 3/4 32 3/8 60 118 7/8 20 3/8 35 3/8 44 58 7/8 27 1/4 41 7/8 58 1/2 65 3/4 44 54 114 Change 40 – 13 6 62 35 28 1 11 – 35 45 53 14 66 -4 42 4 1 72 8 21 1 81 62 83 33 19 -9 5 7 58 38 – 15 – 12 20 31 -8 3 34 34 1 80 25 '70 Change DJIA same Time Period 11 11 11 11- – – 11 15 1 11 11 11 11 8 15 5 11 11 11 11' 11 11 11 11 11 11 10 9 2 5 7 4 6 2 2 2 6 6 6 1 3 7 9 Current Comment Hold for 78 Hold for Income Hold Buy-Dips. Obj.88 Buy-Dips. Obj. 112 Hold for 45 Buy for Inc. & Apprec. Buy for 112 Hold Buy for 102 Hold Buy for 70 Hold for 100 Buy. 50 indicates 1rot Buy for 94 Hold for 34 Buy for 98-136 Hold Buy for 120 Buy for 50 Buy ,for ,108 Buy-Dips. Obj. 70 Hold for 82 Buy-Dips. Obj.42 Buy -Dips. Obj. 63 Hold for 49 Removed from list 8/.H Removed from list 9/8 Removed from list 10/11 Removed from list 9/8 Removed from list 10/n Removed from list 8/30 Removed from list 8/30 Removed from list 3/29 Removed from list lO/n Removed from list 8/30 Removed from list 5/3 Removed from list lO/n Removed from list 8/16 Removed from list 1/29 Removed from list 5/10 ThiS Willi hf\ye nu i'i rmbll;hc.1 f.11 onr tOIlH.'r1I1'rHI' Hut InfOlIn.lll( n Imd ' not tn ofT(r to 'lei! or 1\ SOhClt,ltlJn to I,u\ ,tlL\ '(I'UI LtlC'S The mform.ttlon from nUI(,' L h.II!\' tIl h, 1111,lhl., hut Y. In .,t mt .1(',urIUI allol1 – Co. n(' .\Il' II! ,,1111 . ollllo 01 .. m,IY OJ ImJ .. ,lnd .,11 IfI' ,,!,,'Utltl'1l.fJ.d to h'I'11I WH-916 ,fS. r;;- Walston &- Co. Inc INVESTMENT 8ANKERS MUTIJAl FUNDS MUNICIPAL 80NDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S RECOMMENDED LIST SPECULATIVE PRICE APPRECIATION Price 12/31/64 or date Recom. Ame-r. Bosch 4/5 18 7/8 Audio Devices – 171/8 Camp. Chib. 3 13/16 Foote Mineral 16 3/4 Great West. Fin. 11 1/2 Hewlett-Packard 22 5/8 Ling-Temco 3/22 24 1/2 Mesabi Trust 14 7/8 Microwave Assoc. 9 5/8 Mohasco 14 1/8 National Can 17 Pacific Pete 10 3/4 Seaboard W. Air 6 Universal Match 14 3/8 Varian Assoc. 13 Vulcan Mate. 17 3/8 Price 12/31/65 or date Removed 28 1/8 22 5/8 6 5/8 23 11 3/8 38 7/8 48 1/4 14 5/8 21 1/2 25 1/2 26 1/2 10 5/8 14 20 5/8 26 5/8 21 3/8 Change 49 32 73 37 1 72 97 -2 123 81 56 1 133 43 105 23 Change DJIA same Time Period Current Comment 9 — Buy-Dips. Obj. 50 – Buy for 30-40 11 11 11 11 8 11 11 11 11 11 11 11 11 11 Buy-Dips – Obj. 10 Hold for 29 Hold Buy-Dips. Obj.59 Hold Buy for Income Buy for 40-52 Hold for 29 Buy-Dips. Obj. 50 Hold for Long Term Hold for 20 Buy for 28-57 Hold Hold for 28 Amer.Metal Pro Amer.Rad. S. S. Braniff Air. Intern'l Packers Raytheon Co Reeves Bros. Spartans Ind. 1/29 Sperry Rand AVERAGE 19 1/8 25 20 3i8 20.7 /8 27 3/4 10 7/8 21 1/2 22 1/2 35 10 1/2 37 26 19 1/8 13 7/8 44 12 31 – 2 26 3 72 16 130 – 14 49 2 — — — 3 7 7 3 5 6 9 Removed from list 3/29 list 3/29- Removed from list 3/1 Removed from list 10/11 Removed from list 10/11 Removed from list 3/1 Removed from list 12/6 Removed from list 5/3 Average All Stocks \29 9 This Bulletm JH puhh&lwd 101 your co ,v,'llI.n,',' .lnt! 1l1f'llllloltWll .1111 not .m OfT('1 to or.l o.,ohrlt.ltion to bu) any Willi obtmned from hnve nn intercst m OJ we 1,h1n,t,!1.'…1.n0 j,( lell,llll,'. 1,ut WI' do til' .'Utltl'i fllul not j.!u.\.lntl.'l' to herein .It,'UI.lty, Wllston – Cn. Inl .Hld dlsl.ulI'I..'l.,Thc lnfOlm.ltion OIfiCel'1, (l1('('tors 01 t'mplo)ec! rna) WN-916

Walston &- Co. —-Inc —-INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS January 7, 1966 The Dow-Jones Industrial Average rolled ahead to a newall-time peak last week, reach ing an intra-day high of 991. 59 on Friday. Wednesday's session was particularly impressive with a rise of over twelve points being recorded. There was, actually, little reason not to anticipate such a move in the first week of the new year. As last week's letter pointed out, the combination of year-end selling and January reinvestment demand has caused such a rally in everyone of the years that the Dow-Jones Industrial Average has been available for inspection. This week's phenomenon, therefore, was simply the sixty-seventh annual recurrence of a familiar seasonal spectacle. The rally, however, had a different flavor than the others in the series of upswings which had brought the-market to tliis 'week'speaIC-fro-m theJ'ii'ne low'of 832 Perhaps the — – following table best tells the story June Low DJIA 832.74 Delta Airlines 37 1/4 Boeing 63 1/4 Polaroid 51 1/8 Magnavox 355/8 Texas Instrum. 981/4 Parke Davis 27 3/8 U. S. Steel 46 Bethlehem Steel 341/2 Alum. Co. Amer. 69 1/8 Swift & Co. 443/8 Berkey Photo 155/8 Chromalloy 12 3/4 Kaiser Ind. 67/8 .. Nov. High 969.98 697/8 1401/2 119 84 1847/8 31 7/8 525/8 40 743/4 517/8 31 1/8 29 3/8 /0 Change 16 88 122 133 136 88 15 14 16 8 /(n 1/6/66 Close 985.46 67 1343/4 113 1/4 78 1/2 166 1/2 34 55 1/4 0 99 I.J . 33 111/8 ;! /0 Change 2 -4 -4 -5 -7 -10 7 5 5 5 4 26 12 . 20 .-'..-, As every rs during the last six months of 1965 were stocks in the airlines, e, o' and color TV fields, and the first 'five stocks shown in the table as rep. h 0 ose fields all appreciated five or more times as much as the Dow from June intQ ov er. Yet, as of Thursday night's close with the Dow in new high territory, all wer mewhat below their November peaks. Meanwhile, the ext five stocks in the table, typical investment-grade blue chip issue, most of which had advanced somewhat less than the Dow in 1965, all participated in the most recent rise and were, as of Thursday, above their November highs by a bit more than the Average. Yet, the weakness has not spread in many cases to the extremely speculative portion of the list. The latter five stocks in the table are all in the high r i s k category and all ad- vanced much more than the Dow from June to November. However, they have continued their strength and their technical patterns at the moment show no sign of deterioration. This trend, if it continues, could pose a serious dilemma for investors, espec ially those heavily committed to stocks which had been market leaders in 1965 and which now . may be in need of consolidation. Such an investor has the choice of either upgrading his I holdings in the hope that performance of hitherto laggard blue chips will improve, or of downgrading in an attempt to continue to achieve above-average capital gains performance with, of course, greater attendant risk. Such a choice actually is not new, but one which generally confronts equity buyers in the rnatu,e stages of a bull rna rket. It is, of course, the province of each individual to decide on the amount of risk he wishes to take. There are a number of secondary and tertiary quality situations which still have good technical pattern and could sell somewhat higher. However, those moving into such stocks at this late stage should do so with their eyes open and fully aware of the accompanying risk. Otherwise, they are perhaps better off in seeking capital protection in higher grade issues. Dow-Jones Ind. – 986.13 Dow-Jones Rails – 248.20 ANTHONY W. TABELL WALSTON & CO. INC. This market Irlter IS published for your convenumce lind IDformation and IS not an offer to sell or II. solicitAtion to buy Rny 8e'CUritlt'!; dlseu!lsed. The In. formation wns obtamed from sourCe!! we believe to k' T4hable. but e do not guarAntee Its accuracy. Walston & Co., Inc. and Its OfficelS dIrectors or emJllloyees may have an Interest In or purchase and sell the securltJcs to herein. ' I .. -..';—.,.,.MI 1

Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER January 14, 1966 At a stage of the'm-arket such as the present, when a large number of hitherto in- active low-priced are beginni(lg to dominate the headlines and theIpost-a,ctive lists, there often develops among Wall Street savants what could be called the tch-tch complex, As each new low-priced stock chalks up fantastic percentage gains on turnover, the natural reaction of the professional security analySt seems to be to deplore the poor idiots who, not sharing the analyst's professional capability, are blithely falling all over themselves to push speculative issues into new high territory. Enough of this sort of thing usually leads the analyst to proclaim, in dire tones, that the public is back in the market and that, therefore, Armageddon must indeed be at hand. A case in point can be found-in the recent-gyrations-i-n-Ank'en-Cnemicar& Film Corpo ration which,as recently as November,was selling for 8 7/8. Through this year, the compan has had a four-year record of decreasing earnings; capped by at least four successive quar- ters in which it showed a deficit, but, on January 7th, it announced that it would attempt to market a new device for developing black-and-white film at home. Despite the fact that ther was absolutely no rational way of projecting what the market success of this product might be and that, due to competition in the photographic field, there were, at least, grounds for doubt whether it could be successfully marketed at all, t he stock, selling for 16 on the day before the announcement, proceeded to move to a high of 383/8 over 5 days, trading 1, 127,700 shares or 106 of the capitalization in the process. It is, of course, only one example of the sort of thing that has been hitting the headlines with increasing frequency of late. It is, of course, very easy to make a case that himself in the current speculative orgies is a stock illiterate. It q iwoth r thing, however, to draw, therefrom, portentious conclusions about the a e tear as a whole. There is, indeed, a distinct relationship between the action of rice ks and major stock mar- ket peaks, but tha t relationship is a good to believe. Low-priced stocks, are, indeed, Ie – n many analysts seem wont cator, but it is worthwhile asking just wha Br.iefly,eit activity generally occur well which can be demonstrated by e r s' ow-priced–issues-and- in declines. This is a relationship to any chart. That there are peaks in any index is easy t dicting a peak bef i is not while it is sti .. g, b 13 i ight. There is, however, absolutely no way of pren l' words, the time to worry about a leading indicator ter it turns down. This, of course, has not yet occurred in most low-priced sto k a speculative activity indices. This is not to s t there are no grounds for concern about the current action of the stock market. There are, and most of them center on the length of the most recent up- swing without any noticeable interruption. The Dow-Jones Industrials have advanced from a sharply oversold condition at 832.74 in June to this week's high of 994.09, with the most drastic correction in the entire process being one of less than 5 in November-December. In this sense, at least, the situation is highly reminiscent of last May when a long protracted rise in the market was suddenly broken by a sharp decline which took a great many analysts by surprise. Yet, even in the May-June decline, a great many stocks had relatively mild reactions. The reason was, in most cases, simply that they represented, at the time, relatively good value. Having mentioned one specific instance above, let us cite another. Reynolds Metals (54 1/2) which happens to be in our recommended list, has, generally, risen over the past three years from a 1962 low of 20 1/2 and a low of 36 as recently as June. The point is, how- ever, that the rise in the price of the stock has been roughly coincident with the rise in the company's earnings so that at its current price Reynolds is now selling at less than nineteen times 1965 earnings, a ratio not too far different from the sixteen times latest twelve-month earnings it was selling at at its 1962 low. Clearly, the stock represents value at the present time, and, with further e-rnings gains in prospect, we have nO hesitation about retaining it in our recommended list for purchase. The point of all this, of course, is that,despite the flurries in low-priced issues, goo values continue to exist. The sensible investors' reaction to the activity in low-priced issues will be, simply, to ignore it, and to concentrate his efforts on a search for those many stock which still appear technically and fundamentally attractive. Dow- J ones Ind. – 987 . 30 Dow-,Iooes Rails – 257.48 ANTHONY W. TABELL WALSTON & CO. INC. ThiS market letter IS pubh&hed for our COn\Ct'llCn(.c Hnd Information and not an offer to '1dl or R ooIlcltRtion to buy any eeeuritu.'s The in- (olmntion waS obtained (rom /IOurce; we bLheve to L.' rehahlt. but \\c rio not guarmtee Its 1I('t'urar\. \\'al..ton & Co.. Inc lind It.. officcl!. d,rt'(.tors or -…..cmJ'loyCl may have an mterest In or purehasc I\nd sell the ;,ceUillno''' Icfl'rr,d to herein. WN3(H -I

Walston &Co. —–Inc INVESTMENT' BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 21, 1966 The Dow-Jones Industrial Average continued to move ahead impressively the first part of this week, penetrating the 1000 level on Wednesday with an all-time intra-day high of 1000.55 being recorded. The expected decline in short interest announced on Wednesday by the New York Stock Exchange arrested any further net advance for the week. Based on an average daily trading volume of 8. 03 million shares, the short interest of 10,106,791 represented 1. 26 trading days, down from 1. 36 in December. The significance of this 13. 8 decline in short interest – the largest month -to-month decline on record – we feel can be discounted due to the artificial seasonal effect created by investors short selling against the box to lock in profits, but postpone realizing them until 1966. An inspection at this time of the monthly, short interest barome ter is extremely interesting. A 'drop substantially below 1. 00 in this barometer would be a cautionary signal. Penetration of 0.75 would indicate a signal. It is interesting to note thll-t this has not occurred since the Spring of 1961 when, coupled with a majority of our breadth-of-the-market indices, vulnerability in the stock market was indicated. These indices, maintained to forecast stock market peaks, are leading indicators which normally tend to peak out anywhere from six to twelve months before major market weakness sets in, as experienced in the 1962 correction. Conversely, the ability of this figure to reach 1. 75 would place this barometer in oversold territory and would be considered bullish. This occurred in the Fall of 1962, prior to the longest rise in the stock market in the post-war period. The present reading of this short interest barometer is neutral. It is. the practice of this letter to periodically on our recom- mended list in which significant technical changes have oc r tly, a number of these securities have either reached or are 'tg J1e 1 i al u e objectives. To this end we are making some changes in our recomm lis cepting long term profits in a number of securities which have moved r mmendation. 'e;c4x'Radio Corporation of America is approa'chin'g its-technicllupside-ob o' in recommended July 6, 1965 at 341/8 o'-J;,o e-ar-e -removing-this stock fI'om the -, – ' Quality & Long Term QJ'd List and would suggest using strength toward stock's side t a cept profits. Possible switch candidates would include Aluminum Co a r s WAmerican ri nd Royal Dutch. 1/8), originally recommended at 25 on June 29, 1965, may be held for long m u e objective of 52, but we are removing the stock from the Price Appreciation se n of our Recommended List as a certain degree of technical vulnerability does exi , due to the stock's recent sharp price advance. Switch candidates might include Sundstrand or Reynolds Metals. Cluett Peabody (78 3/8), originally recommended on June 5, 1959 at 28 3/8 (adjusted) indicates a technical upside objective of 90. Retention can be advised for long term holding. However, on strength we feel switch could be made into possibly Illinois Central Industries, Shell Oil or ReynOlds Tobacco. The stock is being removed from our Price Appreciation section of the Recommended List. McGraw Edison (363/4), originally recommended at 25 3/8 (adjusted) on November 13, 1964, has reached all technical upside objectives and is being removed from the Price Appreciation section of our Recommended List. We would use strength in issue to accept profits. Might suggest switch into Walt Disney or Gene ral Dynamics which were recently reviewed by this letter on November 29, 1965. Scovill Manufacturing (72), originally recommended at 35 3/4 on May 6, 1964, has ha an excellent price performance. Stock, however, has exceeded all technical upside objectives and sale Cin strength is recommended. The stock is being removed from the Price AppreI ciation section of our Recommended List. Might suggest switch to Schlumberger or Clevite. Ling-Temco-Vought (52 7/8)' originally recommended on March 22, 1965 at 24 1/2, has exceeded all technical upside objectives, and we are removing the stock from the Specu- lative Price of our Recommended List. We would use profits to switch into Microwave. Dow-Jones Ind. – 988. 14 Dow-Jones Rails – 257.29 ANTHONY W. TABELL WALSTON & CO. INC. Thl mnTket letter ig JlUblishcn for I'OnVCllll'nCC .tnd InfOrmatIOn and nfit an olf..r to sell or ,fI, '1ohritRtlon to buy Any l!e('urities dl'lrU'Ised 'fht' m fnrmnt.lOn obt.mn.t\I'rom.!';(''UTu…. we l\lhv to but C ,if) nOlt j(UlIT1mtl'e ltS lI'(;ur.-\p) Wnhton F.. Co. Inp. nn.l1t'l officl'ls. dUl',tors or t'mf'!loYNs rnn)' hnve an or pUrchR'l ' and 'lell thl' '1ll'Ulltll'S rd.rred to h…ltlfl. …, WN301 ,

Walston &Co. —….;;….; Inc – …..- – INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL 60NnS Members N!'w York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 28, 1966 AMERICAN BOSCH ARMA CORPORATION Current Price Current Dividend Current Yield Long Term Debt Common Stock 33 . 60 1. 8 None 1,692,540 shs. American Bosch Arma, originallyrecommen ded on April 5, 1965 at 20 3/8, is again reviewed by this letter in order to reflect a 'number of substantial improvements that have taken place within the company. In order to completely understand the significance of these changes, it Sales -1966-E 80,000,000 becomes necessary to first examine its past Sales-1965 72,000,000 approx. history. From 1957 through 1964 net sales have Earn. per sh. 1966-E Earn. per sh. 1965 –declined from 134milliciil to 70 million.Earn- 2.50 ings during this period experienced the same 1.85-1.90 approx. downward trend from a record high of 2. 67 in Current Range 1966-65 341/4-151/2 1957 to 91 a share in 1964. A new management team assumed command in the Fall of 1964 and has, in a short period of time, arrested the downward trend in sales and earnings, indicating a reversal in these areas for the year 1965. The present structure of this turn-about situation has been tremendously changed durin this period. Two divisions of the company nOw account for over 90 of total 1965 net sales. They are AMERICAN BOSCH DIVISION – (55). This division is the largest independent manufac- turer of diesel fuel injection equipment. Recent within the indus- try have significantly increased the potential markets for mrnwal d military applica- tion. Manufacturers are projecting an optimistic 1 l e e trucks continue to become increasingly competitive with gasoline mode s.Gfi1itial of a diesel engine is high er. However, through maintenance and of ra, a substantial saving is ac- crued over the life of the truck. arc cu-rrent-Iy ustngthcsc system-s;-La s ac uck,and other major producers, c h' enditurcs-have-placed in a commanding technological is coupled with low-cost production, should deter other manufacture s fro n own systems. Also, the replacement equipment market continues to b i ab . 'urther growth potential for this division can be ex pected due to the is division's successful fuel injection system. ARMA DIVSIO 5) vy dependence on one major defense contract (Atlas Missil y 1960's resulted in greatly reduced sales as the contract was eventually phased out is logically lead to excess plant capacity and a subsequent decrease in profits. Faced with this problem, management consolidated the experienced research and technological abilities of the division, then instituted a marketing sales effort which has placed the division in the position. to better sell their products. A diversified product line of electro-mechanical devices for military electronic systems has now been established. Over twenty various government programs now have contracts with the Arma Division. Conse- quently, any phasing out of business will nOw have nowhere near the relative adverse effect it once had in the past. Emphasis continues to be placed on the development of defense busi- ness. The division is once again contributing to profits, although profit margins continue to remain low. Special consideration is now bei.ng given to non-defense business. Along these lines a new but undisclosed patented electronic product in a major commercial market is to be announced shortly. This could be extremely beneficial to revenues, possibly improving overall profit margins. Revenues for 1965 are estimated at 72 million and earnings will approach 1. 85, dou- bling 1964's figure. Earnings could approximate 2.50 per share this year (1966). With a debt free balance sheet, the acquisition-oriented management believes it is in a position to acquir companies which would supplement their current earnings improvement and growth rate beyond fiscal 1966. We feel a conservati.ve rate of 15-20 yearly improvement can be anticipated. Therefore,benefits may be reflected to investors through an increase in earnings,8.td an increase in the pricel earnings multiple. Technically, the stock continues to indicate an upside objective of 50 with support in the 30-28 area. Despite the sharp rise that has already taken place in recent months at less tha 14 times 1966 estimated earnings, we feel the stock continues to have merit as a capital ANTHONY W. TABELL Dow-Jones Ind. – 985.35 WALSTON & CO. INC. DOlJ'r,tSJi0tltft ('onVlntt.'nt'c ,end Information .uut I'! not .w ofT('r to eell or R Aohlltatlon to buy E1ny securltws 01lCU'lcwti Tnt' .11- tormatlOn Will 'IOur('('!l we tIv, to I…. rdinl,le. hut WI.. ,10 not guarRnte Its .,J.('cur.H'\ \V,II'Iton & Co. Inc anI! ,I … du .dor-, or emJ'lloyees may have an mterest In or purchase and sell the ,crulllleS ref. rn'(l to hO;'rt'!1l. \\ N301 .-