Boring Portfolio

Boring Portfolio Report
Wednesday, May 21, 1997
by Greg Markus (TMF Boring)


ANN ARBOR, Mich. (May 21, 1997) -- The Nasdaq continued higher (+0.7%), thanks in part to an upbeat earnings report and conference call from DELL COMPUTER (Nasdaq: DELL). The Dow (-0.2%) and S&P 500 (-0.3%) gave back some of yesterday's exuberant gains, though.

The Boring Portfolio continued to plod ahead, adding just under $500, or +0.8%, to its net asset value. It was the Borefolio's 15th advance in the past 17 trading sessions. Five stocks rose, three fell, and one was unchanged.

Boring technology holdings carried the day. CISCO SYSTEMS (Nasdaq: CSCO) tacked on $1 1/4, while ORACLE (Nasdaq: ORCL) extended its impressive recovery by gaining $2.

One more day like that would put ORCL in the black for the Borefolio once again, thereby rescinding the little port's distinction as one of the vanishingly few entities that has ever managed to lose money from acquiring an equity stake in the second-largest software company on Earth.

Oracle announced today the availability of its Internet Commerce Server, previously code-named Project Apollo. The new product is a Java-based system that facilitates Web commerce by making it easy for businesses to market their wares and for customers to shop, purchase, and pay in a secure online environment.

For its part, Cisco announced it has purchased a minority stake in TIBCO Software Inc., a subsidiary of REUTERS HOLDINGS (Nasdaq: RTRSY). TIBCO develops "push" Internet technology. As part of the deal, Cisco chief technology officer Ed Kozel will become a member of TIBCO's board of directors.

Also today, Prudential Securities reiterated its "strong buy" recommendation for CSCO and raised its price target to $79 from $70 a share. According to First Call, Cisco is projected to earn in the neighborhood of $2.61 a share in the fiscal year that begins August 1. A multiple of 30 -- i.e., in line with Cisco's long-term earnings growth rate -- thus gets you to Pru's target.

Financial sector stocks were generally soft today, as the yield on the long bond approached 7%. The bond market may have been reacting to trade data released today that showed a surge in U.S. exports. If so, then yesterday's non-action by the Fed appears already to be ancient history, as the vigil continues anew for signs of exceptionally well-hidden inflation. In any event, GREEN TREE FINANCIAL (NYSE: GNT) shed $1/8 to close at $34 1/2 after a delayed opening to the upside.

PRIME MEDICAL SERVICES (Nasdaq: PMSI) added $5/8 to yesterday's $1/2 gain. Volume was a bit above average on both days. I've seen no relevant news since Prime's announcement on May 14 that it had purchased an interest in a mobile lithotripter business operating in Georgia and Tennessee and the announcement on May 12 that Prime had finalized its Prostatron joint venture with EDAP Technomed.

BORDERS GROUP (NYSE: BGP) advanced $1/2 to $21 7/8. With the company projected to earn $0.92 this year and with earnings growth pegged at around 26% into the next millennium, a case could be made for a near-term fair value of around $24, with further appreciation of the share price in line with EPS growth from there. By way of contrast, shares of AMAZON.COM (Nasdaq: AMZN) shed nearly 13% today to close at $17 1/8. Last Thursday, some folks in pursuit of a quick buck were lining up to pay $30 for a share of AMZN in its red-hot IPO. There's a lesson in there someplace, I think.


(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.


TODAY'S NUMBERS
Stock  Change    Bid
ATLS  -  1/8   27.38
BGP   +  1/2   21.88
CSL   ---      30.50
CSCO  +1 1/4   65.63
GNT   -  1/4   34.38
ORCL  +2       46.88
OXHP  -1 1/4   65.75
PMSI  +  3/8   10.88
TDW   +  1/8   41.13
                   Day   Month    Year  History
        BORING   +0.83%   8.15%   3.90%  19.56%
        S&P:     -0.27%   4.74%  13.31%  35.03%
        NASDAQ:  +0.72%   8.96%   6.41%  31.97%

    Rec'd   #  Security     In At       Now    Change
           400 Borders Gr    11.26     21.88    94.34%
  5/24/96  100 Oxford Hea    48.02     65.75    36.91%
  6/26/96  100 Cisco Syst    53.90     65.63    21.75%
   3/5/97  150 Atlas Air     23.06     27.38    18.72%
  8/13/96  200 Carlisle C    26.32     30.50    15.86%
   2/2/96  200 Green Tree    30.39     34.38    13.12%
   3/8/96  400 Prime Medi    10.07     10.88     8.01%
 11/21/96  100 Oracle Cor    48.65     46.88    -3.65%
 12/23/96  100 Tidewater     46.52     41.13   -11.61%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   8750.00  $4247.51
  5/24/96  100 Oxford Hea  4802.49   6575.00  $1772.51
  6/26/96  100 Cisco Syst  5389.99   6562.50  $1172.51
  8/13/96  200 Carlisle C  5264.99   6100.00   $835.01
   2/2/96  200 Green Tree  6077.49   6875.00   $797.51
   3/5/97  150 Atlas Air   3458.74   4106.25   $647.51
   3/8/96  400 Prime Medi  4027.49   4350.00   $322.51
 11/21/96  100 Oracle Cor  4864.99   4687.50  -$177.49
 12/23/96  100 Tidewater   4652.49   4112.50  -$539.99

                             CASH   $7660.41
                            TOTAL  $59779.16