FOOL PLATE SPECIAL
An Investment Opinion
by Randy Befumo

Oxford Hemorrhages

Long the industry holdout, OXFORD HEALTH PLANS (Nasdaq: OXHP) has finally called in sick. The Norwalk, Connecticut Health Maintenance Organization (HMO) shocked investors this morning when the company announced that it will report a surprise loss in the fiscal third quarter. Oxford projected a loss of $0.83 to $0.88 per share in the quarter, the direct result of taking a massive charge to bulk up its reserves against medical claims. Once invulnerable, Oxford is now experiencing some competition, as the company also stated that revenues will be about $111 million below previous expectations. Shares tumbled $37 1/4 to $31 1/2, off more than 50% in morning trading.

While UNITED HEALTH CARE (NYSE: UNH), AETNA (NYSE: AET), and CIGNA (NYSE: CI) have all been complaining about higher utilization, many investors viewed innovative Oxford Health Plans as an exception to the rule. A leader in quality of service, Oxford has until recently focused completely on providing coverage in the New York Metropolitan area. The Oxford advantage has been to give customers what they want in order to avoid sheer price competition. With the company's write-down of accounts receivable and its admission revenues coming in about 10% below expectations, it appears that price competition has finally taken its toll. Oxford is now getting the double whammy from higher utilization and paying more in costs for coverage it mispriced. This "big bath" of write-downs and reserve building is an attempt to cleanse the balance sheet of the mistake.

With Oxford now experiencing higher medical utilization, the company joins United Health Care, Aetna, and Cigna in the dumper for the second year in a row. Although once a darling of growth investors, HMOs have been supremely disappointing for two years running. Cigna and Aetna both announced they would report disappointing earnings a month ago, stating that they were experiencing higher-than-expected costs for healthcare delivery. With magical Oxford finally admitting it has a problem too, investors are again fleeing the group. United Health Care was off $4 1/4 to $47 3/8 this morning, dropping below the August lows it reached after reporting the earnings disappointment and well below the $54 it sold for in September of 1995. Aetna tumbled $2 3/8 to $73 and Cigna slumped $2 3/8 to $167, both also heading below the lows they hit when they initially announced they would disappoint. Although eventually these companies should figure out the pricing, the low margins in health insurance leave little room for error. Bargain hunters may want to think twice before fecklessly plunging in.

UPS

TELE DANMARK (NYSE: TLD), Denmark's premiere telephone utility, was given a $3 boost to $28 7/8 this morning after regional bell operating company AMERITECH CORP. (NYSE: AIT) announced that it will invest $3.2 billion in the company, acquiring 45 million shares for a 34.4% stake.

EAGLE FINANCIAL CORP. (Nasdaq: EGFC) soared $8 to $51 after reporting that it will be acquired by the second-largest bank in Connecticut, WEBSTER FINANCIAL CORP. (Nasdaq: WBST). The deal is a tax-free exchange fixed at 0.84 shares of Webster stock for each share of Eagle stock, for an approximate value of $362 million.

Metal stamping die systems company RIVIERA TOOL CO. (AMEX: RTC) rose $5/8 to $7 3/8 after reporting Q4 EPS of $0.60 compared to EPS of $0.25 in the prior year period .

Vision correction products company KERAVISION INC. (Nasdaq: KERA) gained $11/16 to $7 15/16 as far-sighted investors jumped on the news that Phase III trials of the company's "Keravision Ring for low myopia" showed that 97% of near-sighted patients achieved 20/40 vision or better when treated with the product.

Home mortgage company HOMESIDE INC. (NYSE: HSL) rose $2 5/8 to $26 7/8 after announcing that it will be acquired by National Australia Bank for $1.23 billion. National Australia will pay $27.825 in cash for each HomeSide share.

DOWNS

Financial services software company PHOENIX INTERNATIONAL (Nasdaq: PHXX) crashed $9 3/4 to $14 1/4 after announcing that it expects to record Q3 EPS below last year's $0.14 level and at least 33% below the First Call mean estimate of $0.21. The company said shipments will be weak despite the momentum of the its marketing efforts.

RACING CHAMPIONS CORP. (Nasdaq: RACN) skidded $1 1/2 to $8 3/8 after the maker of die-cast models of NASCAR race cars reported flattish Q3 revenues and earnings per share (on a pro-forma basis) of $0.26, in line with estimates.

Electronic commerce software firm OPEN MARKET (Nasdaq: OMKT) slid another $1 3/8 to $12 1/8 following last Thursday's earnings report.

HMO companies had a tough morning in the wake of Oxford Health Plans announcement that it will take a large quarterly loss (see Fool Plate Special above). SIERRA HEALTH SERVICES (NYSE: SIE) dropped $2 3/8 to $36 1/2 and HUMANA INC. (NYSE: HUM) fell $1 to $21 5/8.

Argentinean bank BANCO FRANCES DEL RIO (NYSE: BFR) dropped $ 2 3/4 to $26 3/4 on reporting Q1 EPS of $0.48, below the First Call mean estimate of $0.52. TELECOM ARGENTINA (NYSE: TEO) also slid $2 11/16 to $26 11/16 as the Merval index was down about 4% at mid-morning.

VIMPEL COMMUNICATIONS (NYSE: VIP) fell $2 7/16 to $36 5/16 and TEMPLETON RUSSIA FUND (NYSE: TRF) lost $4 5/16 to $44 5/8 as holders of Russian stocks and speculators wonder if the Russian government hasn't had just a bit of a hand in the performance of the ruble over the last couple years.

Canadian telecom company TELEGLOBE INC. (NYSE: TGO) fell $2 3/16 to $33 1/4 on announcing last Friday that it has filed to sell 5.2 million shares, 1.7 million from the company and the rest from a corporate holder.

TELEFONOS DE MEXICO (NYSE: TMX) lost $3 5/8 to $42 15/16 and consumer products and electronics retailer GRUPO ELEKTRA (NYSE: EKT) was slammed for $3 1/8 to $28 as the Mexican Bolsa index was down approximately 3.5% at mid-day.

MICRO WAREHOUSE (Nasdaq: MWHS) crumpled for a $8 11/16 loss to $12 after the catalog retailer of PCs pre-announced Q3 EPS of $0.16 (before a charge), higher than the First Call mean estimate but below the more optimistic estimates of the analysts following the company. The company also announced the resignation of its CEO.

Flash memory manufacturer SANDISK CORP. (Nasdaq: SNDK) tumbled $4 1/4 to $23 1/4 on announcing that it intends to issue and sell from 3.0 to 4.5 million shares of common stock.

Following the rest of the HMOs down, WELLPOINT HEALTH NETWORKS (NYSE: WLP) lost $8 1/16 to $47 13/16.

Mexican broadcaster GRUPO RADIO CENTRO (NYSE: RC) tumbled $2 1/2 to $13 1/8 as the Mexican stock market roughs it out today.

CONFERENCE CALLS

PC DOCS GROUP INTL (Nasdaq: DOCSF)
(416) 695-5800 (code: 723627) -- replay

WILD OATS MARKETS, INC. (Nasdaq: OATS)
(800) 633-8284 (reservation # 3247180) -- replay through 10/27 @ 7:00 pm EST

RAPTOR SYSTEMS, INC. (Nasdaq: RAPT)
(402) 220-4216 -- replay through 10/27

FORTE SOFTWARE (Nasdaq: FRTE)
(402) 280-9000 -- replay through 10/27

SEAGRAM COMPANY and HSN, INC.
Regarding combination of television assets
(800) 558-5253 (password: 330 9589) -- replay through 10/28
(416) 626-4151 (password: 330 9589) -- replay for international callers

AVID TECHNOLOGY (Nasdaq: AVID)
(402) 220-0105 -- replay through 10/29

GENZYME (Nasdaq: GENZ) and GENZYME TRANSGENICS (Nasdaq: GZTC)
(800) 633-8284 (code: 3265950) -- replay through 10/30
(303) 248-1201 (code: 3265950) -- replay number for international callers

10/27/97 (Monday)
FORCENERGY (NYSE: FEN)
(800) 411-5828 (code: 362389) -- replay through 11/3
(612) 321-9419 (code: 362389) -- replay for international callers

10/27/97 (Monday)
BJ SERVICES CO (NYSE: BJS)
3:00 pm EST
(913) 661-0896 -- live
(402) 220-9379 -- replay through 10/30

10/27/97 (Monday)
CYBERCASH INC. (Nasdaq: CYCH)
(888) 566-0175 -- replay through 10/29

10/29/97 (Wednesday)
BANCO FRANCES DEL RIO (NYSE: BFR)
3:00 pm EST
(719) 448-2082 -- live (code: 394466)

THIS WEEK'S CONFERENCE CALL SYNOPSES

RAINFOREST CAFE (Nasdaq: RAIN) Call
TIDEWATER (NYSE: TDW) Call
IOMEGA (NYSE: IOM) Call

FOOL PORTFOLIO                  BORING PORTFOLIO

AMZN down $4 1/8 at $56 3/16    ATLS down $1 1/2 at $24 1/2
AOL down $6 15/16 at $80 1/4    BGP down $3/4 at $25 1/4
CHV down $1 at $82 1/2          CSCO down $3 5/8 at $76 5/8
COMS down $4 3/16 at $41 5/8    CSL down $1 1/8 at $43 11/16
DJT down $3/16 at $9 1/2        GNT down $2 3/8 at $43 1/4
GM down $1 5/16 at $66 3/4      ORCL down $1 5/8 at $32 5/16
INVX down $2 3/4 at $25         OXHP down $39 1/2 at $29 1/4
IOM down $2 5/16 at $26 3/16    PMSI down $5/8 at $12 3/4
KLAC down $2 5/8 at $49 3/4     TDW down $1 15/16 at $63 3/4
LU down $3 5/8 at $78
MMM up $3/4 at $96 1/2
T down $1 9/16 at $48 3/4