DRIP PORTFOLIO

<THE DRIP PORTFOLIO>
Our Drip Book
Plus, Campbell Soup news

by Jeff Fischer (TMF Jeff)

Alexandria, VA (August 11, 1999) -- We'll begin our look at PepsiCo (NYSE: PEP) tomorrow. Today, after an announcement, we'll cover news from food company and current Drip holding, Campbell Soup.

First...

:::picture people approaching with trumpets:::

:::they stop walking and raise their trumpets in the air:::

Da-da-da-Dum! Da-da-da-Dum!

The Drip Port and The Motley Fool are proud to announce the publication of their direct investment book, called The Motley Fool's Investing Without a Silver Spoon. (That's a mouthful.) The book's subtitle: How anyone can build wealth through direct investing.

This 450-page beauty sells in FoolMart and is also available at Amazon or Barnes & Noble online, as well as in off-line book stores. The text of the book, which I wrote, is a comprehensive 100 pages. (If only my brother had agreed to write the second half, it would be at least 200 pages like other Fool books!) Following the text, over 300 pages of the book is a complete list of information on more than 1,000 direct (DRP and DSP) investment plans, compiled by The Moneypaper.

Investing Without a Silver Spoon is ideal for beginning investors and for those who have yet to invest in direct investment plans. (It also makes a good gift for friends or family who you believe should start investing.) For experienced direct investors, the book's tax and accounting chapter and direct plan guide should prove useful, while the compounding chapter may be inspirational and the "industries and companies to embrace" chapter is a reminder of what we look for in great investments.

The book's chapters are:

Part I, Intro: An Introduction to Direct Investing
  Chapter 1: Why You Should Invest Sooner Rather Than Later
  Chapter 2: Advantages of Direct Investment Plans
  Chapter 3: How to Enroll in Direct Investment Plans
  Chapter 4: Industries and Companies to Embrace
  Chapter 5: Company Valuation and Performance Measures
  Chapter 6: Portfolio Tracking, Recordkeeping, and Taxes
  Chapter 7: When Not to Invest
  Chapter 8: Selling Stock
  Chapter 9: Frequently Asked Questions about Direct Investing
Part II, A complete directory of direct investment plans

To read reviews of the book and my comments on it as well, please visit it here at Amazon.com. (Other reviews exist at www.bn.com.) If you have questions about the book, please ask. My e-mail is JeffF@fool.com. I hope the book helps many direct investors.

News, News, News

Despite being ensconced in a new industry study, we will continue to keep current with our investments. Last week one of our companies shared significant news.

Change can be tiring, so Campbell Soup (NYSE: CPB) management must be exhausted. The company has been reconfiguring itself for years, selling off businesses like so many heads of a hydra. At this time in 1998, it was hoped that organic sales growth would be on tap for Campbell. An inventory glut and slow sales have so far killed that hope. Now Campbell is instituting several new initiatives.

This month, management raised prices 6.5% on several best-selling condensed soups, including chicken noodle. This is a larger price increase than usual. Campbell is also trying new marketing approaches. It will target specific groups including men, women, the nutrition attentive, and so on. Advertising and promotions will expand, and Campbell might even redesign labels on its condensed soup.

Management also has several new products in the pipeline, many of them focused on the ready-to-eat (RTE) market in which Campbell has seen recent success. It is estimated that 55% of meals require very little preparation time (in the U.S., not Europe). This ready-to-eat market is called "Simple Meals" by Campbell, and it is estimated to be $38 billion in size. Management believes this market represents its largest growth potential.

For fiscal 2000, management outlined three priorities:

1) Fuel and fortify existing growth products such as V8. To do so, Campbell will leverage leading brands. V8 will be launched in new apple and grape blends. Godiva Chocolates will continue to open new stores. Packaging will continue to be tweaked for Pepperidge Farm and new twists will be done with old products. Pepperidge Farm has declined from double-digit sales growth to 4% to 5% sales growth. With increased cost savings, profit growth should still hit 10%.

2) Increase productivity in order to fund new products. Last year management created $150 million in cost savings. This year savings should increase even more, in part due to the recent merger of U.S. and Canadian operations.

3) Strengthen the sauce products. Pace salsa, Prego sauce, and Franco-American pasta account for about 13% of sales and profits, but growth has been disappointing. New advertising, packaging and promotions are on tap, as well as new Prego sauces.

Many questions remain that we hoped would have been answered in the last year. Growth is a question mark. Condensed soup, at 60% of earnings, remains the key business and its growth has been slow despite management's best efforts. Will the ready-to-eat market fuel growth? Campbell's stock trades at 22 times year 2000 earnings estimates of about $1.85 per share, putting it at a premium to industry peers of about 13%.

Fool on!

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8/11/99 Close

Stock   Close     Change
JNJ     92 1/2      +1/4
INTC    76        +4 1/4
CPB     44 1/8     -3/16
MEL     32 5/8     +5/16
               Day     Month       Year     History
Drip         2.81%     3.98%      9.81%      24.89% 
S&P 500      1.60%    (2.02%)     6.49%      38.69% 
Nasdaq       3.01%    (2.79%)    16.98%      60.93% 


Last Rec'd  Total #   Security   In At   Current
 05/03/99    8.134       CPB   $52.793   $44.125
 07/01/99   21.066       INTC  $41.861   $76.000
 03/09/99    9.076       JNJ   $74.910   $92.500
 06/07/99   22.453       MEL   $33.488   $32.625


Last Rec'd  Total #  Security   In At    Value    Change
 05/03/99   8.134      CPB    $429.42   $358.91  ($70.51)
 07/01/99  21.066      INTC   $881.84  $1601.01  $719.17 
 03/09/99   9.076      JNJ    $679.89   $839.53  $159.65 
 06/07/99  22.453      MEL    $751.91   $732.54  ($19.37)


Base:  $2800.00
Cash:    $24.29**
Total: $3556.28

The Drip Portfolio has been divided into 113.904 shares with an average purchase price of $24.582 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. Due to the slow nature of dollar-cost-averaging, we don't expect to seriously challenge the S&P 500 for the first 3 to 5 years as we build an investment base. The long-term advantages of dollar-cost-averaging still overcome the short-term disadvantages, however. (NOTE: our investment in Campbell Soup is all but frozen due to fees instituted in its DRP plan.)

**Transactions in progress:

7/26/99: Sent $100 to buy more JNJ.



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