Boring Portfolio

Boring Portfolio Report
Tuesday, March 5, 1996

by Greg Markus (MF Boring)

It was an un-boring day for the Borefolio: one stock leaping ahead with a multi-point advance while another dropped faster than a 50-lb. sack of fertilizer.

First the good stuff. This morning, Borders issued a news release stating that the company expects FY 1995 earnings to come in at $0.85 per share (excluding non-cash charges). This exceeds analysts' consensus estimates of $0.80 to $0.83 a share and represents an increase of about 30% over FY '94 EPS, excluding charges. Borders also said it expects to report 4Q earnings of $1.33 per share, excluding charges, representing a 56% gain over 1994 4Q earnings. The company attributed the earnings increases to solid sales at both Borders and Waldenbooks, strong expense control, and increased "operating leverage resulting from growth in Borders units to 116 from 75 during 1995."

Borders' FY '95 ended on January 28, 1996. Sales for the year saw a 66% rise for the Borders superstores, to $683.5 million. Sales at Waldenbooks dropped 5%, to $1.03 billion. The company reiterated that it is comfortable with analysts' consensus earnings estimates of $1.05 to $1.06 a share for FY96 before adjusting for the effects of an FASB accounting change. As a result of the accounting change, Borders said it expects analysts' earnings estimates for 1996 to be adjusted upward.

In response to this news, BGP surged $2 1/2 to close at yet another record high: 26 bucks, bid. The press release didn't mention whether the company's optimism about the coming year is attributable to the impressive sales of _The Motley Fool Investment Guide_ at Borders and Waldenbooks across America.

Green Tree Financial tacked on another $1 3/8 today to continue its run into uncharted territory. After the market closed, it was announced that GNT would be moved from the S&P Mid-Cap index to the S&P 500 after the close of market on March 12. As I write this, I honestly don't know for certain that this will be a net plus for GNT as the various index funds re-jigger their holdings; but my strong suspicion is that this news has just got to help the stock. (I'll follow-up on this tomorrow.)

And Lam Research finally halted its slide into the sheep dip, picking up 3/4 today. There's a semiconductor industry book-to-bill number looming on the horizon. Let's hope that news doesn't take a chunk out of Lam's hide. Regardless, Lam's story remains bright for the longer run.

Now for the less good stuff. After a nice gain Monday--possibly attributable a tout for "fertilizer stocks" on Rukeyser's show last Friday--shares of Potash Corp. of Saskatchewan fell $3 on heavy volume.

On at least three occasions recently I've called the company to find out what insight they might have into the activity in their stock. To be quite blunt, PCS (as the company is called) is not particularly forthcoming with information--not to me and not in the recent conference call with analysts in which I participated. I guess the word hasn't made it up to Saskatoon yet that the Information Revolution's been fought, and information won.

In any event, I have calls placed to a couple of analysts who follow the global potash market very closely, and I expect to be able to provide a follow-up to the PCS story tomorrow evening. So be sure to click on over here then. Long term, $100 per share remains a possibility for POT.

Today's Moves

BGP +2 1/2
GNT +1 1/4
KLIC - 1/2
LRCX + 3/4
POT -3
TXI - 3/8

                   Day   Month    Year  History
        BORING   +0.78%   2.78%   0.73%   0.73%
        S&P 500  +0.77%   2.40%   5.50%   5.50%
        NASDAQ   +1.10%  -0.29%   5.37%   5.37%

    Rec'd  #   Security     In At       Now    Change

  1/29/96 100 Texas Indus    54.52     64.00    17.38%
  2/28/96 200 Borders Gro    22.51     26.00    15.50%
   2/2/96 200 Green Tree     30.39     34.25    12.71%
   2/9/96 100 Potash Corp    76.27     73.50    -3.63%
  1/29/96 200 Kulicke & S    23.89     20.75   -13.13%
  2/23/96 100 Lam Researc    48.02     36.50   -23.99%

    Rec'd  #   Security      Cost     Value    Change

  1/29/96 100 Texas Indus  5449.99   6400.00   $950.01
   2/2/96 200 Green Tree   6077.49   6850.00   $772.51
  2/28/96 200 Borders Gro  4502.49   5200.00   $697.51
   2/9/96 100 Potash Corp  7627.49   7350.00  -$277.49
  1/29/96 200 Kulicke & S  4774.99   4150.00  -$624.99
  2/23/96 100 Lam Researc  4802.49   3650.00 -$1152.49

                             CASH  $16765.06
                            TOTAL  $50365.06