Boring Portfolio

Boring Portfolio Report
Tuesday, April 8, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (April 8, 1997) -- The Boring Portfolio rose for the fifth consecutive session on Tuesday, tacking on one-half percent in net value. That was in step with the broader market averages. Boring winners outnumbered losers five to four.

ORACLE CORP. (Nasdaq: ORCL) was among the losers, as the stock fell a quarter-point. In a press release from my home state of Michigan, Oracle said today that KELLOGG (NYSE: K) has adopted Oracle's CPG (Consumer Packaged Goods) software solution designed specifically for the consumer packaged goods industry.

While attention has been focused on Larry Ellison and his Network Computer revival tent show or on the battle between Oracle and INFORMIX (Nasdaq: IFMX) over who's Universal Server is more "universal," Oracle has been quietly rolling out a series of so-called "vertical" software packages aimed at specific industries, such as pharmaceuticals, finance, and -- in this instance -- consumer package goods. The verticals make good sense, and they appear to be attracting customers.

Oracle CPG is comprised of database applications that cover the range of business needs from ordering raw materials to production logistics to marketing to monitoring sales. Kellogg will reportedly use Oracle CPG as part of its "seed-to-shelf" business approach. From where I sit in Ann Arbor, the fit between Oracle and Kellogg in Battle Creek looks pretty good.

Turning to Borefolio winners, OXFORD HEALTH PLANS (Nasdaq: OXHP) added $1 5/8 to yesterday's $1 1/2 gain. For the past few weeks, word has been circulating that Oxford would introduce itself into a new regional market area by acquiring an interest in another company, probably in the Midwest. Oxford confirmed today that it will acquire a minority interest in Chicago-based Compass PPA, Inc., parent company of Compass Health Care Plans.

According to the press release, Compass Health Care is an Illinois-licensed HMO with 24,000 members in its commercial plans. Compass also acts as administrator for a preferred provider organization (PPO) plan with 15,000 members. Compass's provider network includes 1,800 primary care physicians and 74 hospitals in the Chicago metro area.

Under the agreement, Compass will be licensed to use Oxford's name and product names in its Chicagoland service area. Oxford will also provide management support in the day-to-day operations of the health plan, expand Compass's product offerings, and provide working capital and investment capital to build Compass' internal structure.

Terms of the transaction include an arrangement whereby Oxford would eventually fully acquire Compass. Additional details (such as the price) were not disclosed.

The Borefolio's other healthy stock, PRIME MEDICAL SERVICES (Nasdaq: PMSI), picked up two-bits on the bid. Trading volume was also healthy: 132,500 shares.

TIDEWATER (NYSE: TDW) added $3/4 to Monday's $1 1/8 surge. The stock has benefited from Tidewater's own recent acquisition of a fleet of formerly British-owned vessels to bolster Tidewater's existing navy and also from kind words from analysts about the oil-services group generally and Tidewater in particular. Oppenheimer & Co. initiated coverage of Tidewater with an "outperform" recommendation.

CISCO SYSTEMS (Nasdaq: CSCO) took another step on its road to recovery, gaining $7/8 on the bid.

A trade magazine today reported that INTEL (Nasdaq: INTC) will announce a new fiber-optic Fast Ethernet switch for linking corporate local area networks. The Express 100FX Switch is one of the first products to come from Intel's acquisition of Danish networking vendor Case Technology in January. According to the report, Intel will also announce two other products from the new Intel Denmark division: a 24-port desktop switch (called the Express 10) and a segment switch (the Express 10+) aimed at 10-Mbps networks. All three products will ship in May.

Uh-oh. Is this a sign that after gobbling up a good chunk of 3COM's (Nasdaq: COMS) network interface card business that Intel is now moving on to sample some of Cisco's lunch? Well, yes and no.

As the "old" boundaries dividing the desktop from the network, hardware from software, and voice from video from data become increasingly fuzzy, Intel, Cisco, MICROSOFT (Nasdaq: MSFT) and other biggies find themselves simultaneously competing and cooperating with one another as they accelerate the rush to new technologies and, not incidentally, grow revenues and profits at a phenomenal pace. Right now, the network is where the action is.

Consequently, at the same moment that Intel is about to unveil its suite of Fast Ethernet switches, the company is also announcing that it is partnering with Cisco to incorporate the Kid's

Gigabit Ethernet technology into Intel's server adapter cards in the future. The move could help bring Gigabit Ethernet to users sooner than expected. That's good for Intel and it's good for Cisco.

GREEN TREE FINANCIAL (NYSE: GNT) was the fifth Boring winner Tuesday, rising $7/8 to close at $33 7/8. Green Tree is slated to report its first quarter results next Thursday, April 17. According to First Call, the consensus analyst estimate is for EPS of $0.63. That would constitute a fine 31% year-over-year gain.

Which reminds me: don't look now, but its quarterly earning's season again. Traders will turn from obsessing with interest rates to obsessing with that other prime mover of stocks: earnings.

CARLISLE COMPANIES (NYSE: CSL) will report its results the same day that Green Tree does. The week after that comes ATLAS AIR (NASDAQ: ATLS) and Prime Medical. Cisco, Tidewater, and Oxford all report in early May.

The remainder of this week will see reports from networkers ASCEND (Nasdaq: ASND), on Thursday, and CASCADE COMMUNICATIONS (Nasdaq: CSCC), on Friday. Intel reports Monday, and then the gates really swing wide open.

Hang in there!

(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   26.38
BGP   -  3/8   20.88
CSL   -  1/2   29.25
CSCO  +  7/8   55.25
GNT   +  7/8   33.88
ORCL  -  1/4   39.38
OXHP  +1 5/8   61.13
PMSI  +  1/4   10.38
TDW   +  3/4   46.38
                   Day   Month    Year  History
        BORING   +0.50%   3.81%  -1.02%  13.90%
        S&P:     +0.52%   1.19%   3.43%  23.25%
        NASDAQ:  +0.48%   2.92%  -2.61%  20.79%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     20.88    85.45%
  5/24/96  100 Oxford Hea    48.02     61.13    27.28%
   3/5/97  150 Atlas Air     23.06     26.38    14.38%
  8/13/96  200 Carlisle C    26.32     29.25    11.11%
   2/2/96  200 Green Tree    30.39     33.88    11.12%
   3/8/96  400 Prime Medi    10.07     10.38     3.04%
  6/26/96  100 Cisco Syst    53.90     55.25     2.50%
 11/21/96  100 Oracle Cor    48.65     39.38   -19.06%
 12/23/96  100 Tidewater     46.52     46.38    -0.32%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   8350.00  $3847.51
  5/24/96  100 Oxford Hea  4802.49   6112.50  $1310.01
   2/2/96  200 Green Tree  6077.49   6775.00   $697.51
  8/13/96  200 Carlisle C  5264.99   5850.00   $585.01
   3/5/97  150 Atlas Air   3458.74   3956.25   $497.51
  6/26/96  100 Cisco Syst  5389.99   5525.00   $135.01
   3/8/96  400 Prime Medi  4027.49   4150.00   $122.51
 11/21/96  100 Oracle Cor  4864.99   3937.50  -$927.49
 12/23/96  100 Tidewater   4652.49   4637.50   -$14.99
CASH $7660.41 TOTAL $56929.16