Boring Portfolio Report
Friday, May 23, 1997
by Greg Markus (TMF Boring)
ANN ARBOR, Mich. (May 23, 1997) -- As you've no doubt heard by now, the Dow, S&P 500, and Nasdaq all hit new closing highs on Friday. Some folks are trying to pin an asterisk next to the records, pointing out that thin pre-holiday trading volume on the NYSE together with a spate of short-covering exaggerated the strength of the advance.
Perhaps so. On the other hand, Nasdaq trading volume in excess of a half-billion shares was certainly respectable. And the advance was broad-based, with small-cap stocks beginning to show some life following a long dry spell.
A 1% daily gain by the Boring Portfolio didn't quite match the 1.3% and 1.4% increases in the Naz and S&P. For the week, however, the Borefolio's fine 4.4% easily bested the benchmark averages, more than doubling the S&P's performance. The weekly gain of $2,534 includes $128 in accumulated interest and dividends credited to the Boring account.
On Friday, the Borefolio's sole loss was a $1/8 dip in shares of OXFORD HEALTH PLANS (Nasdaq: OXHP). For the week, all nine holdings advanced, paced by a 12.7% rise in PRIME MEDICAL SERVICES (Nasdaq: PMSI) and a 9.3% hike in sizzling CISCO SYSTEMS (Nasdaq: CSCO).
Cisco picked up $1 7/8, as analysts at Donaldson Lufkin Jenrette and Utendahl Capital Partners seem to have found more to like about the stock in the mid-$60s than they did a few weeks ago when it was in the upper $40s.
For his part, DLJ analyst Stephen Koffler upgraded CSCO to "buy" from "market perform" and set a 12-month price target of $80 a share. In his report, Koffler argues that Cisco's recent introduction of its next-generation 5500 switch will help the company further increase its share of the LAN switching market. He also raised his fiscal 1998 estimate by a dime to $2.65 a share. That's four cents above the consensus shown in recent data from First Call, but still well within the range of estimates.
Meantime, Michael Davies at Utendahl Capital upped his FY 1998 estimate from $2.34 all the way to $2.61, maintaining his "buy" recommendation on CSCO. Davies also cited Cisco's introduction of several new products, as well as broader industry drivers, including "the Internet usage, deregulation in the global telecommunications industry, the demand for remote LAN access, the need for network security, carrier network congestion, and increasing enterprise bandwidth constraints."
The Borefolio's other Nasdaq tech stock, ORACLE (Nasdaq: ORCL), added $1/4. We're one month away from the scheduled launch of Oracle8 on June 24.
Quiet CARLISLE (NYSE: CSL) picked up $1/8. The company announced Friday that its Carlisle Tire & Wheel division will purchase assets of Neilson Wheel, a privately held company located in Milwaukee. Neilson Wheel manufactures and distributes -- what else? -- tire and wheel assemblies. Its products are sold primarily to makers of original equipment for the industrial and lawn and garden markets. Terms of the transaction, which is expected to close within a few weeks, were not disclosed.
Acquiring companies that fit its core competencies and then increasing their efficiency and productivity is Carlisle's modus operandi. So I expect the integration of Neilson Wheel will go smoothly.
GREEN TREE FINANCIAL (NYSE: GNT) grew $7/8, as the bond market held steady and the yield on the long bond remained under the psychologically significant 7% mark, although by the thinnest of margins.
All in all, a fine week. I trust you'll put the long week-end to good use, and I'll see you back here on Tuesday.
(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 28.00 BGP --- 21.88 CSL + 1/8 30.50 CSCO +1 7/8 67.25 GNT + 7/8 34.25 ORCL + 1/4 46.88 OXHP - 1/8 65.00 PMSI --- 11.13 TDW + 1/8 41.50
Day Month Year History BORING +0.97% 8.92% 4.63% 20.40% S&P: +1.37% 5.70% 14.35% 36.26% NASDAQ: +1.25% 10.23% 7.64% 33.50% Rec'd # Security In At Now Change 400 Borders Gr 11.26 21.88 94.34% 5/24/96 100 Oxford Hea 48.02 65.00 35.35% 6/26/96 100 Cisco Syst 53.90 67.25 24.77% 3/5/97 150 Atlas Air 23.06 28.00 21.43% 8/13/96 200 Carlisle C 26.32 30.50 15.86% 2/2/96 200 Green Tree 30.39 34.25 12.71% 3/8/96 400 Prime Medi 10.07 11.13 10.49% 11/21/96 100 Oracle Cor 48.65 46.88 -3.65% 12/23/96 100 Tidewater 46.52 41.50 -10.80% 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 6500.00 $1697.51 6/26/96 100 Cisco Syst 5389.99 6725.00 $1335.01 8/13/96 200 Carlisle C 5264.99 6100.00 $835.01 2/2/96 200 Green Tree 6077.49 6850.00 $772.51 3/5/97 150 Atlas Air 3458.74 4200.00 $741.26 3/8/96 400 Prime Medi 4027.49 4450.00 $422.51 11/21/96 100 Oracle Cor 4864.99 4687.50 -$177.49 12/23/96 100 Tidewater 4652.49 4150.00 -$502.49 CASH $7788.54 TOTAL $60201.04