quote.fool.comToday's FeaturesQuotes, News, Charts, Data

 

 

 

 

 

 

   
Free Home Delivery!

Cash-King Port

The Cash King Portfolio has been renamed the Rule Maker Portfolio.

Report
Archives
Information
Messages
Companies Messages

11 Steps:
 1: Philosophy
 2: Mastering Finances
 3: Allocating Savings
 4: Finding Ideas
 5: Getting Information
 6: Cash-King Criteria
 7: QuaVa & Flow
 8: Ownership
 9: Putting It Together
10: Retirement
11: Getting Answers

What's our next portfolio pick? Our trade alerts let you know when the Fool makes a move. Read about our Fool PortTracker too.

Related Items

• Hall of Portfolios
• Rule Breaker Port
• Rule Maker Port
• Boring Port
• Drip Port
• Foolish Four Port
• Harry Jones


Monday, April 27, 1998

Cash-King Portfolio Report
by Tom Gardner
(TomG@fool.com)

Alexandria, VA (Apr. 27, 1998) -- The Cash-King Portfolio notched another strong week last week, with Pfizer and Intel leading the charge, and with ongoing strength from our Foolish-Four holding, Eastman Kodak. It was just one week, but we did wallop the averages, as the S&P 500 fell 1.3%.

In a poignant reminder that short-term thinking gets punished in the public markets, the S&P 500 fell today and our stocks fell sharply along with it. At market close, Pfizer had fallen more than $4 13/16, T. Rowe Price was off $4 5/8, and Microsoft had given up $1 11/16. So, this week is off to a slow start. Thankfully, we're going to be managing this portfolio for two decades, and more.

It's my charge to report on the news and performance of our holdings last week, not today, so let's take a look at the stock-by-stock performance for the week ending April 24, 1998:

            Last    This    %-  
 Cash-King   Week    Week    Change 
 Pfizer     $105.19 $117.63 + 11.8% 
 Intel       $75.19  $82.00  + 9.1% 
 T R Price   $75.38  $76.38  + 1.3% 
 Microsoft   $92.13  $92.06  + 0.0% 
 Coca-Cola   $77.00  $73.63  - 4.4% 
  
             Last    This    %-  
 Fool-Four   Week    Week    Change 
 E Kodak     $70.63  $72.19  + 2.2% 
 Exxon       $72.13  $73.50  + 1.9% 
 Chevron     $83.38  $82.44  - 1.1% 
 GM          $68.94  $67.50  - 2.1% 
  
 S&P 500    1122.72 1107.90  -1.3% 
 

All told, it was quite a fine week, as seven of our nine investments beat the market. Let's look at some of the news starting with our best-performing investment to date.

Pfizer (NYSE: PFE) announced, at its packed-house shareholders meeting on Thursday, that it would spend in excess of $2 billion on research & development this year to fund 170 research ventures. CEO William Steere gave an upbeat report on the performance of the company's leading drugs while repeatedly emphasizing the great potential for Pfizer to heal infirmities with new treatments in the years ahead.

Earlier in the week, Pfizer announced that it had been granted a temporary restraining order in a Viagra trademark-infringement lawsuit filed in U.S. District Court in Atlanta. The lawsuit, filed April 20 against American Urological Clinic and related parties, challenges the organization's marketing of "Vaegra," a vitamin and herbal supplement, as a treatment for erectile dysfunction. Fighting ridiculous trademark infringements like this is an unfortunate consequence of success.

Finally this week, Pfizer announced its quarterly dividend of 19 cents per share, payable to shareholders on June 11. We, of course, would welcome any dividend reductions from our Cash-King companies... since we'll be taxed on them at the end of the year and since we believe each of our companies has huge opportunities for growth around the world (toward which they can direct these funds).

Ringing up an extremely strong week was Intel (Nasdaq: INTC), which announced on Wednesday 1) that it saw its business strengthening in Asia, 2) that growth in China's personal computer market was robust, and 3) that Taiwan would boost Intel's growth in the East.

Intel's Asia-Pacific general manager John Davies told Reuters, "There's no doubt that the market became smaller in South Korea, Indonesia, and Thailand. But China and India are strong." Interestingly, Davies went on to say that Asia now makes 60% of the world's motherboards, 40% of the world's notebook computers, and 50% of the world's graphics cards. Asia, he added, has emerged as the world's PC development center.

T. Rowe Price (Nasdaq: TROW), our third best performer of the week, had a busy time of it. The company announced first quarter earnings of $41.3 million on sales of $210.4 million. The performance marked a rise in net margins to 19.6%. One of the features we look for in our businesses is earnings rising more rapidly than sales, which of course makes for net margins rising into growing demand.

T. Rowe finished the quarter with total assets under management of $139 billion, up 36% over the same quarter last year. Over 50% of the new assets landed in T Rowe's stock funds. Finally, TROW closed the quarter with $215 million in cash on the balance sheet.

(Editor's Note: We could mention that T. Rowe's stock split will take effect on May 1st, but we don't consider that news!)

Microsoft (Nasdaq: MSFT) also announced earnings this past week, posting extraordinary numbers, which were reviewed in Friday's report (cf. Microsoft's Money). Microsoft's chief financial officer Greg Maffei did say Wednesday that he expects fourth-quarter revenues to run flat with the $3.77 billion reported in the third quarter. Further, he noted that earnings would actually be down slightly from the 50 cents per share reported for the third quarter, due to higher sales and marketing expenses.

Microsoft also announced this week that, along with Sony Corporation, it would soon open Microsoft SF, the first Microsoft-branded store. (Disney Stores look out?! NikeTown, beware?!) The store, where consumers can have a hands-on experience with Microsoft and other computer-related products, will be located on the second floor of a huge Sony Entertainment Center now under construction in San Francisco's South of Market area. Get out your checkbooks.

Additionally last week, in a sharp reminder of Microsoft's authority in the software industry, Israel's Check Point Software Technologies (NASDAQ: CHKPF) swiftly fell more than 20% after Mr. Softy warned that it would compete with the network security company. Microsoft's Steve Ballmer said that Check Point should coordinate development of its products with Microsoft if it wanted to avoid direct competition. "If they want to cooperate, to create products for our platforms, we will be happy to tell them our plans," said Ballmer. "If they wish to compete, they are invited to compete with us."

Yikes.

Finally, this past week we had a live discussion on America Online with CFO Greg Maffei. If you're a shareowner of Microsoft today or considering it, and even if you hate Microsoft, you should take five minutes to read through the transcript (cf. Maffei Talks to The Fool). The talk turned up some interesting information about its business model and approach to the industry.

Coca-Cola (NYSE: KO) announced this past week that sales volumes in Mexico, via its bottler Coca-Cola Femsa, grew 25% over the same period last year. Demand continues to grow swiftly abroad as Coca-Cola balances its bottlers' domestic demands versus the need to continue sparking worldwide addiction to caramelized, carbonated corn syrup.

Elsewhere in Cokeville, SunTrust Banks, among the largest holders of KO stock, announced that Coca-Cola CEO M. Douglas Ivester had been elected to the Board of Directors of SunTrust.

To close, Fools, tomorrow evening we'll be announcing our sixth Cash-King purchase. Please look for the report after 6 p.m. tomorrow. As always, we will be purchasing the stock within five days of our announcement. How Foolish -- announcing buys before making them. What would the Wise say to that?

See you tomorrow evening,

Tom Gardner


TODAY'S NUMBERS
Stock  Change    Bid 
 ---------------- 
 CHV   +  15/16 83.38 
 KO    -  7/8   72.75 
 EK    -  15/16 71.25 
 XON   +  13/16 74.31 
 GM    +  7/16  67.94 
 INTC  -2       80.00 
 MSFT  -1 3/4   90.31 
 PFE   -4 3/16  113.44 
 TROW  -4 1/2   71.88 
 

                  Day   Month    Year  History 
         C-K      -1.41%   3.51%   7.59%   7.59% 
         S&P:     -1.93%  -1.38%   8.51%   8.51% 
         NASDAQ:  -2.60%  -0.84%  10.13%  10.13% 
  
     Rec'd    #  Security     In At       Now    Change 
    2/3/98    22 Pfizer        82.30    113.44    37.84% 
    3/12/98   20 Exxon         64.34     74.31    15.51% 
    2/3/98    24 Microsoft     78.27     90.31    15.39% 
    3/12/98   20 Eastman Ko    63.15     71.25    12.83% 
    2/6/98    28 T. Rowe Pr    67.35     71.88     6.72% 
    2/27/98   27 Coca-Cola     69.11     72.75     5.27% 
    3/12/98   15 Chevron       83.34     83.38     0.04% 
    2/13/98   22 Intel         84.67     80.00    -5.52% 
    3/12/98   17 General Mo    72.41     67.94    -6.17% 
  
  
     Rec'd    #  Security     In At     Value    Change 
    2/3/98    22 Pfizer      1810.58   2495.63   $685.05 
    2/3/98    24 Microsoft   1878.45   2167.50   $289.05 
    3/12/98   20 Exxon       1286.70   1486.25   $199.55 
    3/12/98   20 Eastman Ko  1262.95   1425.00   $162.05 
    2/6/98    28 T. Rowe Pr  1885.70   2012.50   $126.80 
    2/27/98   27 Coca-Cola   1865.89   1964.25    $98.36 
    3/12/98   15 Chevron     1250.14   1250.63     $0.48 
    3/12/98   17 General Mo  1230.89   1154.94   -$75.95 
    2/13/98   22 Intel       1862.83   1760.00  -$102.83 
  
                               CASH   $5801.16 
                              TOTAL  $21517.85 
   
 *The year for the S&P and Nasdaq will be as of 02/03/98 
       

</THE CASH-KING PORTFOLIO>

Are you a Foolish investor?
The Motley Fool Recommends...
Industry Snapshot
New format! A stock idea, industry overview, top players, and financials -- every two weeks! Get more info or order.

ValuTool 2.0
You give it the data, and it does the rest: PEG & Foolish 8 valuations, ratio valuations, and lots more. Get more info or order.

Motley Fool Workbook
The Fool Workbook -- put the Fools' lessons to work for you. Get more info or order.

Other Fool Products...
Subscriptions
Primers
Reports
Investing Tools
Books
Fool Gear

Shop FoolMart!

 

  home  | news  | specials  | strategies  | personal finance  | school  | help  

© Copyright 1995-2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. The Motley Fool is a registered trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us