FOOL PLATE SPECIAL
An Investment Opinion by MF Templar

Only One AOL

AMERICA ONLINE (NYSE: AOL) continued to climb this morning after news of a deal with TEL-SAVE HOLDINGS (Nasdaq: TALK) gave investors a new appreciation of the firm's power as a marketing vehicle. In a press release yesterday, Tel-Save announced it was giving America Online a $100 million up front payment to market its local, wireless and long-distance services exclusively to America Online users. Tel-Save will begin constructing its online service area this quarter to enable online sign-up, billing information and payment via credit cards, removing the cost of traditional billing methods. Given that America Online currently has negative working capital, getting a $100 million slug of cash will bring the company's working capital position to a positive $63.5 million, net the payments of $17.2 million due under terms of the agreement.

New information received this morning reveals that the initial $100 million payment, contrary to reports here yesterday, has been structured in a manner similar to a loan. America Online will repay $43 million of the money over a 10-quarter period, with the rest of the money coming due at the end of the agreement. However, Tel-Save will count commissions based on a percentage of the profits it makes from America Online customers towards the payments, suggesting that America Online will not have to pay back the loan if its customers adopt Tel-Save's service. Rumors put the split of the profits around 50-50, although this has yet to be confirmed by either company. What is the likelihood of America Online subscribers adopting Tel-Save's long-distance service? Considering that Tel-Save will offer America Online customers long-distance service for less than 10 cents a minute, there seems to be a pretty good chance at least some might find this sub-AT&T rate attractive -- particularly if it removes the headache of monthly check writing.

Tel-Save stressed it was doing the deal because it wanted access to a "higher-income, technology savvy consumer audience" for its entry into consumer services. "There is only one AOL and they are the only one that has this unique base," Tel-Save Chief Executive Dan Barislow said. This agreement brings to mind the old valuation methodology for America Online, which used potential revenues from each customer to come up with an overall price for the company. At a share price of $39 1/2 this morning, each America Online subscriber is being valued at $468, which compares to roughly $600 to $1000 for the average cellular subscriber and $1500 to $2000 for the average cable subscriber, based on acquisitions in those industries done over the past 24 months.

UPS

Radio and TV broadcaster CLEAR CHANNEL COMMUNICATIONS (NYSE: CCU) jumped $3 3/8 to $47 1/2 after announcing it will acquire billboard company Eller Media for $750 million in cash and $400 million in stock.

Electronics components maker MAXWELL TECHOLOGIES (Nasdaq: MXWL) rose $1 1/2 to $20 on announcing a development contract and a volume production agreement with a "major telecommunications partner."

Insider buying at voice mail company OCTEL COMMUNICATIONS (Nasdaq: OCTL) seems to be giving off a "buy signal" as its shares climbed $1 1/2 to $18 1/4.

PHILIP MORRIS (NYSE: MO) added $3 3/8 to $136 5/8 after announcing a three-year $8 billion share buyback authorization as well as a three-for-one stock split.

Indianapolis power company IPALCO ENETERPRISES (NYSE: IPL) gained $3 1/8 to $31 1/4 after announcing a 12 million share buyback, winning accolades from Prudential and Goldman Sachs.

DELL COMPUTER (Nasdaq: DELL) moved up $2 3/8 to $74 1/2 after reporting Q4 sales of $2.4 billion and earnings of $1.01 per share, smashing the Zacks' mean estimate of $0.83.

Specialty chemicals and equipment company PETROLITE (Nasdaq: PLIT) jumped $10 3/8 to $58 3/8 after agreeing to merge with oilfield equipment and services company BAKER HUGHES (NYSE: BHI) in a stock swap valuing Petrolite at $61 per share.

DOWNS

MCDONALD'S (NYSE: MCD) fell $2 1/2 to $44 3/4 as company's vice-chair is expected to suggest a new Big Mac price of $0.55 in an address to franchisees today. WENDY'S (NYSE: WEN) is down $2 1/8 to $20 1/8, and Burger King franchisor GRAND METROPOLITAN (NYSE: GRM) fell $1 1/8 to $30 1/2 in expectation of pricing pressures.

PRIMUS TELECOM (Nasdaq: PRTL) lost $1 to $9 1/4 after saying Q1 revenues and margins will be hurt by customer fraud.

Fiber optics equipment maker ORTEL CORP. (Nasdaq: ORTL) fell $6 7/8 to $13 3/4 after reporting Q3 earnings per share (EPS) of $0.17, in-line with estimates. The company also said that broadband product order sluggishness will hurt results for the next two quarters.

PHYSICIAN CORP. OF AMERICA (Nasdaq: PCAM) fell another $1 5/8 to $3 1/2 after the Florida health services company said it expects its yearly loss to total $225- to $250 million, and that its worker's compensation insurance unit faces the possibility of being taken into rehabilitation by state regulators.

Software design firm INTEGRATED SYSTEM CONSULTING GROUP (Nasdaq: ISCG) slipped $5 1/4 to $8 1/8 after the company said certain development projects have been delayed and that Q1 EPS will come in at $0.06 to $0.07, below estimates of $0.10.

ETEC SYSTEMS (Nasdaq: ETEC) lost $5 3/8 to $39 3/4 after the electronics capital equipment company reported Q2 EPS of $0.35, beating estimates by 9% on a 70% increase in net sales.

Fiber channel company ANCOR COMMUNICATIONS (Nasdaq: ANCR) was hit for a $5/8 loss to $6 3/4 after reporting larger-than-expected Q4 losses due to product returns from SEQUENT COMPUTER (Nasdaq: SQNT), recognizing a reserve for potential future returns, and an inventory writedown.

UNITED AUTO GROUP (NYSE: UAG) fell $5 to $19 3/4 after Smith Barney cut its rating on the used car dealership company to "hold" from "buy" following yesterday's guidance from the company.

LUCENT TECHNOLOGIES (NYSE: LU) lost $3 3/4 to $55 after Smith Barney cut its rating on the company to "neutral" from "outperform" and lowered its 12-month price target from $67 to $62, saying the company's accounting treatments are more aggressive than those of its industry peers.

Clothing company GUESS? INC. (NYSE: GES) fell $2 5/8 to $10 3/8 after announcing Q4 EPS of $0.28 on a 12.3% increase in revenues, which was disappointing to Merrill Lynch, at least, which cut its rating to "near-term neutral" from "buy."

CONFERENCE CALLS

DELL COMPUTER (Nasdaq: DELL)
replay available until 7:30 Wednesday
(800) 633-8284 (reservation # 2454194)

LIMITED INC. (NYSE: LTD)
(800) 805-3502

MORROW SNOWBOARDS (Nasdaq: MRRW)
(201) 628-6885 replay until 2/28

ELTEK LTD. (Nasdaq: ELTKF)
(913) 661-0487 code: 314285

HOME DEPOT (NYSE: HD)
(402) 220-3005 -- replay after 12:00 noon until 2/28

ORTEL CORP. (Nasdaq: ORTL)
(402) 220-5186 -- replay through 3/7

NOVELL CORP. (Nasdaq: NOVL)
after 7:30 p.m. EST
(402) 280-9008 -- replay

02/27/97 (Thursday)
INTUIT (Nasdaq: INTU)
(800) 938-1160 -- replay

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO                 BORING PORTFOLIO

ATCT unch. at $5 1/2           BGP down $1/8 at $43 1/08
AOL up $2 1/2 at $39 1/8       CSL down $1/8 at $34
CHV down $3/4 at $67 1/4       CSCO up $1 1/2 at $58
COMS down $1/8 at $39          GNT down $3/8 at $37 3/4
GM down $5/8 at $59            ORCL down $1/4 at $40 5/8
IOM down $1/4 at $16           OXHP up $1/2 at $58
KLAC down $1/8 at $44          PMSI up $1/4 at $11 7/8
LU down $3 1/2 at $55 1/4      SLR down $1/4 at $55 7/8
MMM down $1/8 at $89 7/8       TDW up $1/2 at $43 7/8
T down $1/4 at $40 7/8