Boring Portfolio Report
Wednesday, April 2, 1997
by Greg Markus (MF Boring)
ANN ARBOR, Mich. (April 2, 1997) -- The Boring Portfolio managed a decent 0.55% advance Wednesday, helped by strong gains in shares of BORDERS GROUP (NYSE: BGP) and PRIME MEDICAL SERVICES (Nasdaq: PMSI). TIDEWATER (NYSE: TDW) held fast at $46 1/2 against unfavorable currents. Other Boring stocks fell fractionally, with the notable exception of GREEN TREE FINANCIAL (NYSE: GNT), which dropped another dollar, to $32, as it continued to wither along with the financial services group generally.
The Borefolio's gain contrasted with a 94-point drop in the Dow (-1.42%) and only slightly less substantial declines in the S&P 500 and Nasdaq. In a nutshell, precious few buyers are willing to step into the arena ahead of Friday's monthly jobless claims report, particularly while various Federal Reserve members are mouthing off to national newspapers about how they just might (or then again, might not) be inclined to hike rates again come their May meeting.
Once the dust settles -- and it will, eventually -- there will be some terrific bargains available among stocks. Indeed, there are already.
A $1 1/4 gain by Borders came after Merrill Lynch selected BGP as its "Focus One Stock of the Week" and suggested a price target of $27. Oh, yes: that's post-split. BGP began trading this week at its 2-for-1 stock split price. In all the hubbub this week, I guess I forgot to mention that.
As for Prime Medical, the company announced yesterday that NationsBank and Bank of Boston approved the company's request to increase its senior credit facility from $90 million to $135 million. According to the press release, the total facility consists of three separate loans: a $45 million term loan with quarterly payments, a $50 million revolving credit line, and a $40 million loan with annual principal payments of $800,000 and a balloon payment of $36 million in April 2003. The floating interest rate for each of these loans currently equates to between 7.9 and 8.7 percent.
Prime Medical pointed out in its recent quarterly conference call (summarized elsewhere in The Motley Fool) that it intended to use a combination of debt and cash flow to accelerate acquisitions of lithotripter operations as well as the development of new operations such as the recently announced lithotripsy partnership in Hawaii and the formation of partnerships to offer mobile Prostatron services for treating benign prostate enlargement.
CISCO SYSTEMS (Nasdaq: CSCO) fell only $7/8 today. I say "only" because the loss could have been larger in light of earnings warnings from network industry companies ADTRAN (Nasdaq: ADTN) and WANDEL & GOLTERMANN TECHNOLOGIES (Nasdaq: WGTI). Dare I suggest that Cisco is finding the bottom finally?
In that regard, First Call shows that analysts' consensus earnings estimates for Cisco are unchanged this week: $2.05 per share for the fiscal year ending in July and $2.73 per share for FY98. If achieved, the former number would represent "merely" a 51% gain over last year, while the FY98 number suggests that 31% growth over the coming year is the current consensus projection.
What would almost any other company on earth be willing to do to achieve that kind of growth?
Finally tonight, a news note on OXFORD HEALTH PLANS (Nasdaq: OXHP). The company reported yesterday that founder, Chairman, and CEO Steve Wiggins was appointed by President Clinton to serve on the Advisory Commission on Consumer Protection and Quality in the Health Care Industry. The Commission of 32 leading healthcare professionals is charged with making recommendations to Congress and the President on ways to improve the delivery and quality of healthcare in America.
Oxford's press release also contained the following
information, which I reproduce here, as you may find it of interest: "Oxford
serves 1.7 million members in six states through its health plans and related
businesses. The company's revenues exceeded $3 billion in 1996 and are expected
to exceed $4 billion in 1997. Oxford was recently recognized as the fifth
fastest growing public company in the United States. The Wall Street Journal
also reported in February that Oxford ranked second over the past five years
in total return to shareholders among all U.S. public companies."
(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.
Stock Change Bid ATLS - 1/4 25.88 BGP +1 1/4 20.00 CSL - 1/8 29.38 CSCO - 7/8 47.38 GNT -1 32.00 ORCL - 1/4 36.75 OXHP - 3/4 56.25 PMSI + 5/8 10.63 TDW + 1/8 46.50
Day Month Year History BORING +0.55% -0.19% -4.84% 9.51% S&P: -1.25% -0.93% 1.26% 20.67% NASDAQ: -1.31% -1.70% -6.97% 15.37% Rec'd # Security In At Now Change 2/28/96 400 Borders Gr 11.26 20.00 77.68% 5/24/96 100 Oxford Hea 48.02 56.25 17.13% 3/5/97 150 Atlas Air 23.06 25.88 12.22% 8/13/96 200 Carlisle C 26.32 29.38 11.59% 3/8/96 400 Prime Medi 10.07 10.63 5.52% 2/2/96 200 Green Tree 30.39 32.00 5.31% 6/26/96 100 Cisco Syst 53.90 47.38 -12.11% 11/21/96 100 Oracle Cor 48.65 36.75 -24.46% 12/23/96 100 Tidewater 46.52 46.50 -0.05% Rec'd # Security In At Value Change 2/28/96 400 Borders Gr 4502.49 8000.00 $3497.51 5/24/96 100 Oxford Hea 4802.49 5625.00 $822.51 8/13/96 200 Carlisle C 5264.99 5875.00 $610.01 3/5/97 150 Atlas Air 3458.74 3881.25 $422.51 2/2/96 200 Green Tree 6077.49 6400.00 $322.51 3/8/96 400 Prime Medi 4027.49 4250.00 $222.51 6/26/96 100 Cisco Syst 5389.99 4737.50 -$652.49 11/21/96 100 Oracle Cor 4864.99 3675.00 -$1189.99 12/23/96 100 Tidewater 4652.49 4650.00 -$2.49
CASH $7660.41 TOTAL $54754.16