Boring Portfolio

Boring Portfolio Report
Friday, May 24, 1996

by Greg Markus (MF Boring)

PHOENIX, AZ, May 24, 1996 -- A dreary week for the Borefolio ended with an equally dreary Friday, as the port' sustained a 1.22% loss, with six holdings down (including the newly acquired shares of Oxford Health Plans) and only one up (Green Tree Financial).

For the week, the Borefolio lost 1.74%, including transaction commissions associated with Tuesday's sale of 100 shares of Lam Research and today's purchase 100 shares of OXHP but excluding accrued interest on cash reserves. That loss drops the Boring Portfolio behind the S&P 500 benchmark, based on performance since the Borefolio was established back on January 29. Gosh, maybe I should give Jeff Vinik a call and we could commiserate?

Nah. Actually, I'm quite satisfied with this week's adjustments in the Borefolio. LRCX has continued to erode since I closed my position on that stock, ending the week at $36 1/2). And although OXHP fell a fraction in Friday's trading, I anticipate great things from this high quality stock of an equally high quality company.

I elected to move the 100 OXHP into the Borefolio right away. I managed to break my tradition of acquiring new stocks at their intra-day highs -- but not by much. The Borefolio paid $47 3/4 per share, while OXHP's high on Friday touched $48. The stock closed at a bid price of $46 1/2 on volume of over 1.4 million shares.

Friday yielded no news on any Borefolio stocks. The questionable-move-of-the-day award goes to LCSI, which continued a descent that it began the day before, and on above-average volume of 108,200 shares.

Shortly after LCS Industries reported disappointing earnings on May 7, I wrote a fairly long letter to CFO Pat Frustaci, asking him why the the company was so tight-lipped in communicating with shareholders (like us) who want to understand how their business works and what management's long-term strategy is.

What I received in reply was a FedEx packet (good sign) containing the standard investor info kit I already had (no help), along with a letter from him basically reiterating what we already know -- i.e., the company is "conservative" in its public communications (less help yet).

Frustaci did say, however, that an institutionally-based analyst may initiate coverage of the stock soon and that an additional acquisition by LCSI over the remainder of this year is also a good possibility.

Well, at least we've got a conversation going with the company. I plan to continue it when I get back from vacation. Until then, my position is that at a price equal to approximately 10-times EPS for the FY ending in September, the stock certainly appears to be undervalued.

I leave for Sonora in the morning. Next week will bring you a series of guest Fools in this spot. Who knows what they'll say with Boring off in the boonies communing with geckos and scorpions?

Enjoy your long week-end.

Transmitted: 5/24/96


BGP - 5/8 ...GNT + 5/8 ...LCSI -1 1/2 ...OXHP -1 1/4

...PMSI - 1/8 ...SHAW - 3/8 ...TXI - 1/2 ...

*Scroll down or expand screen for full portfolio accounting

Day Month Year History

BORING -1.22% 1.77% 7.72% 7.72%

S&P 500 +0.37% 3.72% 9.15% 9.15%

NASDAQ -0.07% 4.81% 19.87% 19.87%

Rec'd # Security In At Now Change

3/8/96 400 Prime Medic 10.07 17.38 72.54%

2/28/96 200 Borders Gro 22.51 36.13 60.48%

1/29/96 100 Texas Indus 54.52 66.13 21.28%

2/2/96 200 Green Tree 30.39 33.38 9.83%

5/24/96 100 Oxford Heal 48.02 46.50 -3.17%

4/12/96 300 The Shaw Gr 18.84 17.50 -7.11%

3/25/96 200 LCS Industr 26.14 16.00 -38.79%

Rec'd # Security Cost Value Change

3/8/96 400 Prime Medic 4027.49 6950.00 $2922.51

2/28/96 200 Borders Gro 4502.49 7225.00 $2722.51

1/29/96 100 Texas Indus 5449.99 6612.50 $1162.51

2/2/96 200 Green Tree 6077.49 6675.00 $597.51

5/24/96 100 Oxford Heal 4802.49 4650.00 -$152.49

4/12/96 300 The Shaw Gr 5652.49 5250.00 -$402.49

3/25/96 200 LCS Industr 5227.49 3200.00 -$2027.49

CASH $13299.52

TOTAL $53862.02