Boring Portfolio Report
Friday, April 11, 1997
by Greg Markus (MF Boring)
ANN ARBOR, Mich. (April 11, 1997) -- A higher than expected March reading in the so-called core rate of inflation in prices paid by producers rocked the world of equities Friday. All major market averages dived, with the Dow closing lower by nearly 150 points (-2.3%), and the S&P 500 and Nasdaq Composite lower by more than 2%, as well.
For the week, the benchmark S&P 500 lost 2.7%, putting it below the point where it began the year. The Nasdaq slid 2.4% for the week and is now in the hole by more than 6.5% year-to-date. So much for irrational exuberance.
The story was pretty much the same for the Boring Portfolio as all nine holdings lost ground Friday, sending the Borefolio lower by 3.3%. Losses on Thursday and Friday more than erased gains achieved earlier in the week, resulting in a weekly net loss of 2.3%.
GREEN TREE FINANCIAL (NYSE: GNT) felt the blade yet again as stocks in the financial industry were axed on fears that the Federal Reserve might raise interest rates a second time when it meets next month.
Our once glorious king of the forest is starting to assume a distinctly bonsai appearance. The company releases its first quarter earnings results on Tuesday. That report, plus the company's commentary in the follow-up conference call should help provide some visibility about where Green Tree might go from here in the balance of 1997.
Shares of OXFORD HEALTH PLANS (Nasdaq: OXHP), gave back $3 7/8 of their recent gains, to close at a bid of $60 3/8. Oxford nevertheless clocked a healthy $2 3/8 increment for the week. The company was the focus of a feature article in the Friday issue of Investor's Business Daily (and available through IBD's site on AOL).
Michael Pachuta's article ably summarized how Oxford has achieved industry-leading growth and profitability by aligning customer, physician, and company interests in ways that reward health, healing, and customer choice. Pay docs and other healthcare providers according to the efficacy of the care they provide, and attract customers by respecting and encouraging their active participation in managing their health: what a concept.
ORACLE CORP (Nasdaq: ORCL) fell another $7/8 Friday. Donaldson Lufkin & Jenrette analyst Frank Michnoff removed the stock from the firm's recommended list. The Wall Street Journal revealed today that problems at Oracle's arch-rival INFORMIX (Nasdaq: IFMX) may be even worse than the company had let on when it warned investors recently about significantly slower sales and earnings. That news did nothing to bolster Oracle, however.
Finally, shares of CISCO SYSTEMS (Nasdaq: CSCO) lost $1 3/8. After the market closed Thursday, ASCEND COMMUNICATIONS (Nasdaq: ASND) and CASCADE COMMUNICATIONS (Nasdaq: CSCC) posted their first quarter results. Ascend announced EPS of $0.36, net of extraordinary items. That beat the analysts' consensus as reported in First Call by two cents and topped even the high-end estimate by a penny. Moreover, in its conference call last night the company emphasized that it continues to see very strong demand from Internet Service Providers for networking hardware.
Ascend's bullish report was tempered by Cascade's less enthusiastic results and guidance, however. And on a day like today, bad news trumps good.
Let's say we take the week-end to regroup and meet back here on Monday, okay?
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Stock Change Bid ATLS -1 24.00 BGP -1 20.00 CSL - 5/8 28.25 CSCO -1 3/8 51.13 GNT -1 5/8 30.50 ORCL - 7/8 36.50 OXHP -3 7/8 60.38 PMSI - 3/8 9.63 TDW -2 7/8 44.00
Day Month Year History Day Month Year History BORING -3.33% -1.46% -6.04% 8.12% S&P: -2.73% -2.57% -0.42% 18.67% NASDAQ: -2.33% -1.21% -6.52% 15.94% 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 60.38 25.72% 8/13/96 200 Carlisle C 26.32 28.25 7.31% 3/5/97 150 Atlas Air 23.06 24.00 4.08% 2/2/96 200 Green Tree 30.39 30.50 0.37% 3/8/96 400 Prime Medi 10.07 9.63 -4.41% 6/26/96 100 Cisco Syst 53.90 51.13 -5.15% 11/21/96 100 Oracle Cor 48.65 36.50 -24.97% 12/23/96 100 Tidewater 46.52 44.00 -5.43% 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 6037.50 $1235.01 8/13/96 200 Carlisle C 5264.99 5650.00 $385.01 3/5/97 150 Atlas Air 3458.74 3600.00 $141.26 2/2/96 200 Green Tree 6077.49 6100.00 $22.51 3/8/96 400 Prime Medi 4027.49 3850.00 -$177.49 6/26/96 100 Cisco Syst 5389.99 5112.50 -$277.49 11/21/96 100 Oracle Cor 4864.99 3650.00 -$1214.99 12/23/96 100 Tidewater 4652.49 4400.00 -$252.49 CASH $7660.41 TOTAL $54060.41