Boring Portfolio

Boring Portfolio Report
Friday, May 2, 1997
by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (May 2, 1997) -- Government employment data released this morning revealed that new jobs increased by a less than expected 142,000 in April and that average wages and working hours actually declined slightly. On the other hand, the unemployment rate dropped much more than anticipated -- to 4.9%, the lowest reading since November 1973.

The overall picture was thus a Rorshach inkblot that traders could interpret to suit their mood. At first glance, they apparently perceived the profile of a grinning Alan Greenspan, and bond prices fell. A closer look, however, suggested a charging bull, with lightning bolts firing from his nostrils. Clearly, that was a sign to buy stocks, and technology stocks (lightning... electricity?) in particular --which is precisely what they did.

And how. By day's end, the Dow rose 95 points, to put it within 15 of its all-time high. The S&P 500 fared better yet -- up 1.8% and just 4 points short a new record.

But it was on the Nasdaq -- which has been lagging the Dow and S&P so far this year -- that the truly eye-popping action occurred. The Nazz posted it biggest one-day point gain ever: up 35, or 2.7% -- to close at 1305. Nasdaq trading volume was enormous, approaching three-quarters of a trillion (with a "T") shares. As strong as that move was, it still leaves the Nasdaq Composite Index about 85 points shy of its old high.

The Boring Portfolio swelled by $1231 Friday, not counting interest on the $7660 sitting in cash. That works out to a 2.2% gain in the total value of the portfolio and a 2.6% gain in the portion of the portfolio invested in stocks. Seven holdings rose (boy, did they ever), while two fell fractionally.

One of the losing stocks was BORDERS GROUP (NYSE: BGP). Borders edged off $3/8 amidst a retail sector that failed to participate in today's party after the Commerce Department revised its March retails sales numbers downward slightly. The other loser was TIDEWATER (NYSE: TDW), which lost $1/8 along with most other oilpatch stocks -- about the only other slippery sector besides retail in Friday's trading.

Another day, another recommendation for GREEN TREE FINANCIAL (NYSE: GNT). After Morgan Stanley upped the stock to a "strong buy" on Thursday, analysts at JWCharles initiated coverage of Green Tree with a "buy" and set a 12-month price target of $42. GNT grew $1/2 and moved back into the profit column for the Borefolio.

After pausing briefly on Thursday, OXFORD HEALTH PLANS (Nasdaq: OXHP) resumed its sprint to new high ground. The stock gained $3 1/4 Friday to close at a bid of $68 1/4. Oxford reports its first quarter results Tuesday. News of a federal budget agreement in Washington probably helped buoy OXHP -- just as worries about the possible magnitude of cuts in Medicare reimbursements to HMOs clobbered the stock early in the year.

Quiet CARLISLE (NYSE: CSL) gained a buck, and ATLAS AIR (Nasdaq: ATLS) continued its ascent, rising $3/8 on the bid.

PRIME MEDICAL (Nasdaq: PMSI) gained $3/8, as well -- perhaps after folks had a chance to study the company's 10-Q report, which is now available at the SEC's EDGAR website, . I took a quick look myself and was delighted to see that cash flow (defined as net income plus depreciation and amortization) stood at $496 million at the end of the March quarter, a 62% increase over the year-ago period.

As noted earlier, some of the hottest action was in the tech stocks, and the Borefolio's two technology pure-plays participated fully.

ORACLE (Nasdaq: ORCL) advanced $1 7/8 on strong volume to close at $42 3/8. Oracle gained 12% this week.

Heck, that was nothing compared with the show CISCO SYSTEMS (Nasdaq: CSCO) staged. Aided by favorable comments from Merrill Lynch analyst Joe Bellace, Cisco added $3 3/4 to end the week at a bid of $57 1/8. According to my calculations, that's 23% above where it closed last Friday. Cisco reports quarterly results on Tuesday after the close of trading -- the same day that the Networld+Interop trade show opens in Las Vegas.

I wish I were in Vegas to see what the Cisco folks might unveil among the showgirls and Flying Elvis's. But something tells me we'll soon find out.

(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  +  3/8   28.50
BGP   -  3/8   20.75
CSL   +1       29.75
CSCO  +3 3/4   57.13
GNT   +  1/2   30.88
ORCL  +1 7/8   42.38
OXHP  +3 1/4   68.25
PMSI  +  3/8   9.75
TDW   -  1/8   39.00
                   Day   Month    Year  History
        BORING   +2.21%   3.01%  -1.04%  13.87%
        S&P:     +1.81%   1.45%   9.75%  30.78%
        NASDAQ:  +2.74%   3.54%   1.11%  25.40%

     Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     20.75    84.34%
  5/24/96  100 Oxford Hea    48.02     68.25    42.11%
   3/5/97  150 Atlas Air     23.06     28.50    23.60%
  8/13/96  200 Carlisle C    26.32     29.75    13.01%
  6/26/96  100 Cisco Syst    53.90     57.13     5.98%
   2/2/96  200 Green Tree    30.39     30.88     1.60%
   3/8/96  400 Prime Medi    10.07      9.75    -3.17%
 11/21/96  100 Oracle Cor    48.65     42.38   -12.90%
           100 Tidewater     46.52     39.00   -16.17%
Rec'd # Security In At Value Change 2/28/96 400 Borders Gr 4502.49 8300.00 $3797.51 5/24/96 100 Oxford Hea 4802.49 6825.00 $2022.51 3/5/97 150 Atlas Air 3458.74 4275.00 $816.26 8/13/96 200 Carlisle C 5264.99 5950.00 $685.01 6/26/96 100 Cisco Syst 5389.99 5712.50 $322.51 2/2/96 200 Green Tree 6077.49 6175.00 $97.51 3/8/96 400 Prime Medi 4027.49 3900.00 -$127.49 11/21/96 100 Oracle Cor 4864.99 4237.50 -$627.49 12/23/96 100 Tidewater 4652.49 3900.00 -$752.49
CASH $7660.41 TOTAL $56935.41