Estate of Dorothy B. Foote - Page 10




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          report also noted slightly increased sales for the first 9 months            
          of Applied Power's 1993 fiscal year and higher pretax income.                
               On November 19, 1993, Baird issued another research note on             
          Applied Power (the Baird November report), captioned "Story                  
          Improving, But Earnings Aren't".  This report gave a rating of               
          "Hold-3, higher risk" (again, a recommendation to hold the stock)            
          for the Applied Power stock.2  The Baird November report stated              
          "Positive Developments Are Emerging" and cited six points as "good           
          news" to support a belief that "Applied Power will see its day."             
               On January 4, 1994, Baird issued yet another research note              
          (the Baird January report) for Applied Power, raising Applied                
          Power's stock's rating to a "Buy-2" rating.                                  


               2    The research note stated in pertinent part:                        
                   current business trends are still weak, not                         
                   yet suggesting annual top-line growth of even                       
                   2-3%.  Given that the first quarter will most                       
                   likely fall short of consensus estimates of                         
                   $0.25-$0.26 and the lack of visibility as to                        
                   any meaningful recovery, we are reducing our                        
                   fiscal year 1994 earnings estimate to $1.15                         
                   and maintaining our Hold-3 rating.                                  
                   *     *     *     *     *     *     *                               
                   Quite simply, Applied Power will not recover                        
                   until Europe and Japan improve, and Aerospace                       
                   markets at least stabilize.  Applied Power is                       
                   hoping for stability in Europe and Japan by                         
                   the end of this year, but sees substantial                          
                   recovery postponed until the 1995-96 period.                        
                   Thus, Applied Power, while not extremely                            
                   expensive, is not a compelling value.  While                        
                   the time to buy Applied Power will occur                            
                   before these recoveries actually begin, it                          
                   remains too early.                                                  


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