THE CASH-KING PORTFOLIO
by Phil Weiss ([email protected])
Towaco, NJ (Dec. 7, 1998) -- I've got a tough act to follow. Tom's Eyes on the Wise series last week was excellent. If you missed it, you really ought to consider taking the time read it now. In this series, some of the ways in which Sales Analysts -- they'll never be called brokers or stock analysts in this space again -- put fee generation well ahead of the financial well-being of their clients were laid out for all to see.
One of the posters to our Strategies Board, wjp, went to great lengths to document the performance of a number of members of the Wise community in 1998. He documents the performance of the January 1998 stock selections of the Wise panelists of Wall $treet Week through October 30th. If you check out the post, you'll see just how poorly this group performed over that period.
If you want to join in the continuing discussion on the Eyes of the Wise, you can check out the new Message Board dedicated to the topic.
Tomorrow night I'm going to share some of my own experiences in dealing with Sales Analysts, but as is our custom in Cash-King (soon to be Rule Maker) land, tonight I'll focus on the news of the week. We'll kick off that discussion with this table showing the performance of our holdings last week:
Cash-King Last This Change Microsoft $128.06 $127.38 - 0.5% Gap Inc.(*) $51.09 $50.56 - 1.0% Cisco $79.81 $78.25 - 2.0% S-Plough(+) $54.88 $54.75 + 0.2% T. Rowe $36.75 $37.53 + 2.1% Pfizer $114.00 $112.63 - 1.2% AmEx $103.44 $98.63 - 5.6% Coca-Cola $71.69 $69.00 - 3.8% Intel $110.00 $116.31 + 5.7% Fool Four Last This Change Chevron $85.63 $81.69 - 4.6% Exxon $74.38 $71.50 - 3.9% GM $71.44 $69.50 - 2.7% Kodak $74.75 $73.56 - 1.6% S&P 500 1192 1177 - 1.3% (history 16.95%) Total C-K $27,422 $27,138 - 1.0% (history 24.16%) (*) Stock split 3 for 2 on 12/1 (+) Stock split 2 for 1 on 12/2
As you can see, it's the kind of week where we can take some solace in widening our lead over the S&P, but we're not going to crow too loudly as we still did post a loss.
We'll start the news coverage with our big gainer for the week -- Intel (Nasdaq: INTC). On Monday, our company announced it would acquire privately held iCat for an undisclosed amount of cash. iCat will join Intel's new internet business unit. Its customers are primarily small and mid-sized companies looking for an easy way to set up web storefronts. iCat has an online mall that hosts 6,000 catalogs. The acquisition is Intel's latest expansion in the area of e-commerce.
A good deal of Intel's price increase for the week can probably be attributed to Friday's announcement that it now sees fourth quarter sales up 8% to 10% over the same quarter last year. This was the second announcement by our company this quarter about its currently improved business prospects. Once again the company is making Merrill Lynch sales analyst Tom Kurlak's prediction of Intel's near-term price hitting $60 per share look foolish.
Next up is the company that's performed the best of all our holdings -- Microsoft (Nasdaq: MSFT). This past week the company's anti-trust trial moved into the Java stage. On Wednesday, it was reported by The Washington Post that our company's chairman plans to donate $100 million to help immunize children in developing countries. Typing this in the report reminded me that I hadn't yet made my donation to the Fool's Share Our Strength campaign, so I immediately took care of that online. If you haven't made your contribution yet, why not consider taking a minute or two and doing it right now.
If you think that Microsoft is the only one that plays hardball with its competitors or the only one that gives things away for free in an effort to squash the competition, you might think again after reading this article in Forbes Magazine. Once again it looks as if many of our company's competitors are guilty of setting some double standards when it comes to what is and isn't allowed in the marketplace.
The last of our technology companies, Cisco Systems (Nasdaq: CSCO) announced this week that it will acquire PipeLinks, a company it previously held a minority stake in, for $126 million in stock. This is another example of what we like about the way Cisco runs its business. Rather than acquire large companies with difficult integration issues that could slow the overall momentum of its business, our company makes smaller acquisitions of vital technology that it hasn't been able to develop. This is what helps keep Cisco ahead of its competition.
The acquisition will help Cisco in its battle with the telecom companies in the quest to provide service providers such as phone companies and ISPs network services that integrate data and voice. This is particularly important because of the fact that there are a number of service provider contracts up for bid this quarter.
Gap Inc.'s (NYSE: GPS) 3-for-2 stock split occurred after market close on Monday. On Thursday, our company released its sales figures for the month of November. As has been the case all year, they were strong. Same store sales for the month grew by 16%. Overall, they were up 40% over the comparable period in 1997. Go, Gap Go!
Gap wasn't the only company in our portfolio to split this week. Schering-Plough (NYSE: SGP) stock split 2-for-1 after market close on Tuesday.
Our other pharmaceutical company received some good news last week. Celebrex, which is a product that Pfizer (NYSE: PFE) will be helping Monsanto Corp. (NYSE: MTC) market, received recommendation for FDA approval from the Arthritis Advisory Committee of the Food and Drug Administration. Pfizer's agreement with Monsanto is similar to its very successful agreement with Warner-Lambert (NYSE: WLA) to market Lipitor. Our company has high hopes for this pain reliever's future prospects.
That's it for the news wrap-up this week. Tomorrow night I'm going to relay some of my own experiences in dealing with Sales Analysts -- believe it or not, they haven't all been bad.
Phil Weiss, Fool
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Day Month Year History C-K +1.94% 3.96% 26.62% 26.62% S&P: +0.95% 2.07% 18.06% 18.06% NASDAQ: +1.87% 4.67% 22.46% 22.46% Cash-King Stocks Rec'd # Security In At Now Change 2/3/98 24 Microsoft 78.27 133.56 70.65% 5/1/98 55.5 Gap Inc. 34.06 53.81 57.99% 2/13/98 22 Intel 84.67 118.94 40.47% 2/3/98 22 Pfizer 82.30 114.38 38.97% 6/23/98 34 Cisco Syst 58.41 80.19 37.28% 8/21/98 44 Schering-P 47.99 54.38 13.30% 2/6/98 56 T. Rowe Pr 33.67 37.31 10.81% 2/27/98 27 Coca-Cola 69.11 68.63 -0.70% 5/26/98 18 AmExpress 104.07 100.19 -3.73% Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Eastman Ko 63.15 74.00 17.19% 3/12/98 20 Exxon 64.34 73.00 13.47% 3/12/98 15 Chevron 83.34 82.19 -1.39% 3/12/98 17 General Mo 72.41 69.50 -4.01% Cash-King Stocks Rec'd # Security In At Value Change 2/3/98 24 Microsoft 1878.45 3205.50 $1327.05 5/1/98 55.5 Gap Inc. 1890.33 2986.59 $1096.26 2/13/98 22 Intel 1862.83 2616.63 $753.80 6/23/98 34 Cisco Syst 1985.95 2726.38 $740.43 2/3/98 22 Pfizer 1810.58 2516.25 $705.67 8/21/98 44 Schering-P 2111.7 2392.50 $280.80 2/6/98 56 T. Rowe Pr 1885.70 2089.50 $203.80 2/27/98 27 Coca-Cola 1865.89 1852.88 -$13.02 5/26/98 18 AmExpress 1873.20 1803.38 -$69.83 Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Eastman Ko 1262.95 1480.00 $217.05 3/12/98 20 Exxon 1286.70 1460.00 $173.30 3/12/98 15 Chevron 1250.14 1232.81 -$17.33 3/12/98 17 General Mo 1230.89 1181.50 -$49.39 CASH $120.62 TOTAL $27664.53 *Please note: On 8/4/98 $2,000 cash was added to the
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