DRIP PORTFOLIO

<THE DRIP PORTFOLIO>
The Fish is Out of the Bag
Plus, Touchstone Friday

by Vince Hanks (TMFElwood@aol.com)

NORTHVILLE, MI (Feb. 5, 1999) -- The CatDog fish has been harpooned! Campbell Soup's (NYSE: CPB) Pepperidge Farm division has won an early battle in its attempt to protect its Goldfish cracker brand as Nabisco Inc. was ordered by a federal judge not to include a goldfish-shaped cracker in its proposed CatDog snackfood mix.

U.S. District Judge Shira A. Scheindlin ruled that the new fish-shaped cracker would unfairly take advantage of the success of Pepperidge Farm's established product.

Nabisco plans to ask the judge to stay the effect of her ruling while it seeks an emergency appeal because the product that was ready to be shipped this week is perishable, said company spokesman Hank Sandbach.

A short while ago on our Drip message boards, I referenced an article on investing in non-Drip companies through what was described as "Synthetic Drips." Since then I've received numerous requests for more information on this Drip alternative, so I thought I'd answer those requests here tonight.

The "Synthetic Drip" is actually the National Association of Investors Corporation (NAIC) Stock Service Plan. It shares many of the attributes of Drip investing that make Drips appealing to us Fools, plus a few additional features. The plan may be particularly attractive to those seeking to invest in some high tech companies in a Drip-like manner. Among the 200 stocks offered are: Microsoft, 3Com, Amgen, Oracle, and many more.

Here are some highlights of the plan:

  • Buy fractional shares in any of the 200 stocks offered (many of which do not offer Drips).
  • Reinvest all dividends, if any.
  • Invest as little as $10 monthly in any of the 200 stocks.
  • Receive a consolidated statement (including year-end tax statement) for all stocks purchased through the plan.
Sounds great, eh? Sure, but there are some costs involved. First, you must be a member of the NAIC in order to participate. The annual membership fee is $39.

Next, you may choose from one of three plan options. They are as follows:

Platinum: Annual fee of $200. Purchases and dividend reinvestment costs are 3 to 8 cents per share.

Gold: Annual fee of $60. A tiered purchase scheme of: 1-6 at $4.50 each, 7-25 at $4.00 each, and 26 or more at $3.50 each (per purchase date), plus the 3 to 8 cent per share fee. Dividend reinvestment costs are 3 to 8 cents per share.

Silver: Annual fee of $36. Purchase costs are $8.00 each, plus the 3 to 8 cent per share fee. Dividend reinvestment costs are 3 to 8 cents per share.

Looking at the Platinum membership for a minute: At one purchase a week (52 per year), it would break down to $3.85 per purchase, plus 8 cents per share (the per-share fee is 8 cents for 1 to 500 shares purchased). If you add the $39 membership fee, the cost per purchase would be $4.60. Is it worth it? That's for you to decide. It does, however, offer another option for the small investor looking to invest limited funds on a weekly or monthly basis. (Note: Stocks in the plan are purchased on a monthly basis, the third week of each month. Funds deposited reside in a money market account until used for purchase.)

Touchstone Friday. Our analysis of individual oil and gas companies is underway. Hooray! Before jumping right in, though, we began the week on Monday with Jeff focusing on what lies ahead. Click back to see what we're looking at in the near term.

On Tuesday, Jeff was back in the saddle with a review of our Drip accounting methods and why they can sometime be misleading in the early going.

Wednesday was the day many Fools have been hoping and praying for as Brian led the charge into a company-by-company analysis of the oil and gas industry. First up was Apache Corp. (NYSE: APA). If you missed it, you'll want to click back for this concise overview of our first oil & gas suitor.

Then on Thursday, Baker Hughes Inc. (NYSE: BHI) came on down and went under the knife as Jeff surgically dissected the second of our contestants in the "Oil & Gas Stock is Right!" game.

That does it for another week of Dripping Foolishly. Have a great weekend!

[To discuss these columns, please visit the Drip Companies message board on the Web.]

Call Your Boss a Fool.

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2/5/99 Close

Stock    Close     Change
JNJ     84         +  1/8
INTC   127 9/16    -2 9/16
CPB     43 3/8     +  1/16
MEL     65 3/8     +  1/2
            Day     Month    Year    History
Drip      (0.77%)  (5.89%)  (0.24%)   13.46%
S&P 500   (0.73%)  (3.14%)   0.83%    32.12%
Nasdaq    (1.51%)  (5.28%)   8.25%    48.93%

Last Rec'd  Total #  Security   In At    Current
 11/02/98    8.055     CPB     $52.880   $43.375
 12/01/98    9.731     INTC    $80.248  $127.563
 12/08/98    8.605     JNJ     $74.109   $84.000
 01/04/99    3.994     MEL     $62.227   $65.375

Last Rec'd Total # Security  In At     Value    Change
 11/02/98   8.055    CPB    $425.95   $349.39  ($76.56)
 12/01/98   9.731    INTC   $780.89  $1241.30  $460.41
 12/08/98   8.605    JNJ    $637.71   $722.82   $85.12
 01/04/99   3.994    MEL    $248.56   $261.13   $12.57

Base:  $2300.00
Cash:   $162.89**
Total: $2737.53

The Drip Portfolio has been divided into 96.509 shares with an average purchase price of $23.832 per share.

The portfolio began with $500 on July 28, 1997, adds $100 to invest every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress:
10/24/98: Sent $40 to buy more INTC.
01/22/99: Sent $100 to buy more MEL.


</THE DRIP PORTFOLIO>