Boring Portfolio

Boring Portfolio Report
Monday, December 22, 1997
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (Dec. 22, 1997) -- The Boring Portfolio slumped more than 1% in generally listless trading on this Monday of Christmas week. Benchmark averages closed higher.

News that holiday sales are shaping up to be something less than jolly is causing many retailing stocks to head south for the season. That includes Borders Group (NYSE: BGP), which fell $1 1/8 to $29 7/8.

I admit it: I've done hardly any shopping thus far. Looks like I'd best head uptown to Borders and see what I can do to contribute to their quarter.

Speaking of shopping, Cisco Systems (Nasdaq: CSCO) bought a little something for itself today. The Kid signed a definitive agreement to acquire privately held LightSpeed International of Sterling, Va., for approximately $160 million in Cisco stock.

The acquisition is the latest move in Cisco's strategic initiative to help customers integrate voice and data communications. According to the press release, LightSpeed is involved in voice signaling translation technology that allows different telephone and communications systems to work together over a variety of networks.

For large corporations, this means eventually integrating their PBX telephone systems and LAN data networks. For communications providers, it will facilitate the transition from circuit-switched telephony to voice-over-ATM and voice-over-IP. For Cisco shareholders, it means potentially vast new markets for Cisco stuff.

LightSpeed's approximately 70 employees will remain in the greater Washington D.C. area and will become part of Cisco's Service Provider line of business headed by senior vice president Don Listwin.

As a result of the deal, Cisco said it expects to take a one-time, after-tax charge of between $0.11 and $0.15 per share for purchased-in-process R&D expenses in the second quarter of fiscal 1998 (ending January).

Cisco stock rose $1 1/16 to a bid of $54 1/2.

Also on the upside, Green Tree Financial (NYSE: GNT) posted its fifth consecutive gain, growing $7/16 to $25 1/2 in trading in excess of 2 million shares. SEC filings show that four insiders, including CFO Ed Finn, purchased a total of 12,000 shares of Green Tree between Dec. 8 and Dec. 16. Insiders also were buyers last month. According to a Green Tree spokesman, the company also recently bought back 1.7 million shares.

Among today's losers, shares of Tidewater (NYSE: TDW) continued to ebb. After falling $1 on Friday, the stock lost $2 1/8 today as oilpatch stocks continue to slip in tandem with energy prices.

Tidewater is now trading at 12.7 times projected earnings per share of $4.08 for FY98 (ending in March) -- plus you get small dividend. Even without any expansion of this puny multiple, EPS projections in the neighborhood of five bucks for FY99 suggest a $64 target price. And although oil and gas prices have come down appreciably from their recent highs, they are still well above the levels that would trigger any slowdown in exploration and production activity. It's just one guy's view, of course, but perhaps this sell-off has been just a tad overdone?

Do your Foolish gift shopping now, in time for the Holidays. And consider the Fool's Industry Focus '98 book -- to learn not only about industry-leading stocks, but about the industries in which they operate as a whole -- and see which one company in each industry that our news and analysis team favors most.


TODAY'S NUMBERS
Stock  Change    Bid
CGO   -  11/16 23.56
BGP   -1 1/8   29.88
CSL   -  3/4   41.75
CSCO  +1 1/16  54.50
FCH   -  5/16  36.69
GNT   +  7/16  25.50
PMSI    ---    13.00
TDW   -1 7/8   52.25

                   Day   Month    Year  History
        BORING   -1.14%  -5.65%   6.54%  22.60%
        S&P:     +0.73%  -0.18%  28.75%  53.42%
        NASDAQ:  +0.48%  -4.28%  18.67%  47.18%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     29.88   165.41%
  8/13/96  200 Carlisle C    26.32     41.75    58.59%
  6/26/96  150 Cisco Syst    35.93     54.50    51.67%
   3/8/96  400 Prime Medi    10.07     13.00    29.11%
 12/23/96  100 Tidewater     46.52     52.25    12.31%
   3/5/97  150 Atlas Air     23.06     23.56     2.19%
  11/6/97  200 FelCor Sui    37.59     36.69    -2.40%
   2/2/96  200 Green Tree    30.39     25.50   -16.08%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  11950.00  $7447.51
  8/13/96  200 Carlisle C  5264.99   8350.00  $3085.01
  6/26/96  150 Cisco Syst  5389.99   8175.00  $2785.01
   3/8/96  400 Prime Medi  4027.49   5200.00  $1172.51
 12/23/96  100 Tidewater   4652.49   5225.00   $572.51
   3/5/97  150 Atlas Air   3458.74   3534.38    $75.64
  11/6/97  200 FelCor Sui  7518.00   7337.50  -$180.50
   2/2/96  200 Green Tree  6077.49   5100.00  -$977.49

                             CASH   $6427.47
                            TOTAL  $61299.35