Independent Research Firm Founded 1934. Staff of 2

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Argus Research Company
Navigating the Volatility Argus Best Ideas
PRESENTED BY
John Eade Director of Research
Legent Clearing Conference May 17, 2007
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Argus Research Group
Argus Research Company Independent Research Firm
Founded 1934 Staff of 27 Analysts, Covering 700
Stocks Global Settlement Participation Instituti
onal Services Vickers Stock Research Data
Company Focused on Institutions,
Insiders Database of 8,900 Institutional
Portfolios, 190,000 Insiders, 30,000
Securities Filings include 13-Ds, 13-Gs,
13-Fs Argus Investors Counsel Registered
Investment Advisor Clients Include Endowments,
Pension Funds, Hospitals
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Economic Outlook
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Economic Outlook
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Economic Outlook
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Economic Outlook
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Economic Outlook
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Interest Rate Outlook
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Interest Rate Outlook
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Interest Rate Outlook
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Stock Market Outlook
? Bull Market at 4 Years ? Well Above-Average
Profit Growth since 2003 ? Profit Margins Still
Near All-Time Highs ? Interest Rates Still Low
Across Yield Curve ? Balance Sheets Strong, Cash
Levels High ? Risk Premiums are Low ? Stock
Valuations are Average
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Stock Market Outlook View for 07-08

• ? Expect Profit Growth to Slow
• ? Expect Profit Margins to Fall from Peak
• ? Stock Price Gains Track EPS Growth
• ? Flat PE Multiples for Stocks
• ? PE Expansion when Fed Rate Cuts Start

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Stock Market Outlook
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Stock Market Outlook
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Stock Market Outlook Net Profits
Margins(TTM/10-Year Median)
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Stock Market OutlookSP 500 (International
Revenue as of Total)
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STOCK MARKET OUTLOOK
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Argus ResearchSP 500 Targets for 2007

• ? EPS 98 (8 growth)
• ? Target Price 1475
• ? Target Range 1300-1550
• ? Sector Allocation Strategy
• Favored Industrial, Healthcare, Consumer
  Staples
• Avoid Consumer Discretionary, Telecom

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Argus ResearchTimely Ideas

• ? Portfolio Selector Focus List High Conviction
  Ideas
• ? Special Situations New Products
• ? Activist Analysis Turnaround Ideas
• ? New Coverage Small Mid-Caps
• ? Recent Upgrades
• ? Stocks to Avoid

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Argus ResearchPopular Products

• ? Portfolio Selector Focus List
• ? Analyst Reports
• ? Weekly Staff Report/Economy at a Glance
• ? Model Portfolios
• ? Conference Calls
• ? ArgusVision 2008