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—– — Walston &reo. Inc ;;…;;;….;….;… MUNICIPAL BONDS UNDERWRITERS MUTUAL FUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST to COASt AND OVERSEAS lABELL'S MARKET LETTER December 8, 1967 MEDUSA PORTLAND CEMENT COMPANY Current Price Current Dividend Current Yield Long- Term Debt 3 Conv. Pfd. Stock Common Stock Sales-1967-E Sales-1966 Earn.Per Sh. 1967-E Earn. Per Sh. 1966 Mkt. Range -1967-66 28 1/2 1. 20 4. 20/0 25,005,000 74,936 shs. 55,000,000 47,650,006 2.60 3.01 203/8 – 30 5/8 be on the less critical list. The patient recorded itS peak year of healthful profitability in 1959. Since then alingering illness set in that has been diagnosed as acute excessive capacity with the result being a withering away in operating ratios, bringing them down to —the-tlangerously'low'niid-700/0 a'rea– This' was accompanied by varying pressures on price structure that made it difficult for the patient to sustain any rallying tendencies. With the illness correctly diagnosed major alterations in operating methods have been undertaken, and a period of intensive examination indicates that the ill- ness is subsiding and the patient soon rna The patient is the cement industry and no one can question the rough time it has undergone for almost a decade. The improvement we favorable projections currently being made for residentia n e is premised on the residential construction over the coming years. Our population has just ffsons and their progeny will require shelter, sugges e2 0 i ark. All these per- m r' ease 'in household for- mations that in turn should translate into a in . sidential construction ex- penditures. In addition, increasing funds wi oca 0 highway building programs, expenditures for which will-be 1 conclusion'ef Vietnam-hostilities. All this indicates a sharp rise in c If these prognostications prove. ac- curate, we feel one of the would be Medusa Portland Cement. Medusa isfje e producer, but one that has had a superior oper- ating record in th y . It was the only major company able to report record earnings last year, . mo mpanies underwent a sharp drop in operating income. Much of Medusa's rec nt cess can be attributed to the geographical area served, which includes WisconSin, ois, Ohio and Pennsylvania. A new plant in Mbhigan is undergOing trial runS and should benefit from the expanding Michigan economy. Other favorable factors that have contributed to Medusa's better-than-average showing include its major position in the more profitable and somewhat less competitive white cement market and an sive cost-conscious management. The company has established good marketing and distribution procedures and diversification into the aggregate business is proving highly profitable. Medusa has avoided the ready-mix business, which has proven quite costly to other companies and yields an unsatisfactory return on invested capital. In the current year, Medusa is expected to report a slight drop in earnings from 1967's 3.01 a share, to around the 2. 60 level. This reflects the generally unfavorable economic climate that has characterized this year. However, 1968 is fully expected to witness a swift return to favorable rates of return and an earnings projection of 3.25 a share, a new record, now seems reasonable. Looking further ahead, industry analysts suggest that Medusa's efficient operation could be realizing earnings in the area of 4. 00 to 4. 50 a share. Now selling for little more than eleven times earnings, these shares appear to have substantial appreciation potential. Recently added to the Price Appreciation section of our Recommended List, Medusa has formed a substantial base in the 25 area suggesting a price objective at 66, and continues to be suitable for purchase at prevailing market levels. Dow-Jones Ind. 887.25 Dow-Jones Rails 234.51 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. A WT' HWI ,'amb Thill market le feomrpmloaytieoens mW&IU1I tter is pubUebed for obtai ba.VI!! naend infrtoemre sts oIunr coyersopuwUr eFceohbnaevsheeenvaIenendtcoe&eballentdhreeIlnilaIfbeoclreum,riatbJteiuoltlnrwefelf.hedrdroeIsdntnooot t an offer hgeUreaimn.ntee to Bell or a solicitation to buy any it's accuracy Walston & Co.Inc aanedt'uIrtistieosmd.cJeJrJac,uued Th J ……… onr WN.lOl a ….