Boring Portfolio

Boring Portfolio Report
Tuesday, June 3, 1997
by Greg Markus (TMF Boring)

BOSTON, Mass. (June 3, 1997) -- The Dow managed to post a 23 point gain Tuesday (+0.31%), but the S&P 500 finished down fractionally and the Nasdaq tumbled 1.42%, hit by across-the-board weakness in technology stocks.

The Boring Portfolio lost a third of a percentage point, despite winning issues outnumbering losers five to three, with PRIME MEDICAL SERVICES (Nasdaq: PMSI) unchanged. A somewhat abbreviated Borefolio recap comes to you tonight courtesy of a delayed flight into Logan Airport and typical Boston rush-hour traffic.

Shares of CISCO SYSTEMS (Nasdaq: CSCO) fell along with other networking stocks after CABLETRON SYSTEMS (NYS: CS) warned last night that their second quarter results would not meet analysts' expectations. Sluggish sales in Europe, weakening demand for some of Cabletron's older product lines, and production delays associated with some newer products all hurt Cabletron.

What's interesting (to me, anyway) is not that CISCO SYSTEMS (Nasdaq: CSCO) dropped on the news, but that it dropped only 4.5% (-$3 1/16). For its part, Cabletron fell $15 1/2, losing more than a third of its market capitalization in a matter of minutes.

An analyst at J.P. Morgan observed that Cabletron's problems may well be company-specific, since Cisco and ASCEND COMMUNICATIONS (Nasdaq: ASND) are enjoying increasing demand for their products. The specter of weak sales in Europe continues to haunt networking stocks and those of related companies -- such as our ORACLE CORP (Nasdaq: ORCL), for example. Oracle slipped $2 7/16 despite First Albany's upgrade of the stock to "strong buy" from "buy."

Cisco turned up the heat on its competitors today by announcing the availability of Cisco AccessPath, its first carrier-class dial access system. The system is intended for Internet service provider Point of Presence (POP) and large enterprise customer.

I haven't had time to study the specs carefully, but AccessPath appears to be a fully configured, big-league "POP in a box," complete with a high-speed router and interconnect system that, according to the press release, sports a switching capacity of up to 3.6 Gbps and can be configured to connect more than 700 ports simultaneously. All system components are integrated in a self-contained rack cabinet complete with cabling, a rack component patch panel, and a comprehensive network management system.


A mere $133,000. Get two.

On the upside, ATLAS AIR (Nasdaq: ATLS) ascended $1/4, and BORDERS GROUP (NYSE: BGP) booked a $5/8 gain, to hit an all-time high of $23 5/8.

OXFORD HEALTH PLANS (Nasdaq: OXHP) also hit a new high, gaining $3/16 to close at $72 9/16. A story in today's Wall Street Journal reported that HMOs might fare better than had been anticipated under a Medicare spending plan being worked out between Republican Congressional leadership and the Clinton White House.

The compromise plan would trim Medicare payments to healthcare providers who covered Medicare recipients, particularly in urban area -- such as Oxford's key markets. On the other hand, the government would step up efforts to move seniors off fee-for-service coverage and into managed care plans.

On balance, this could well redound to the advantage of Oxford, which has strong internal cost control in place in order to bolster profit margin and ample capacity to serve new Medicare customers.

Oh, yeah: GREEN TREE FINANCIAL (NYSE: GNT) continues to bloom, helped by moderating interest rates.

That's it from the banks of the Charles.

(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   28.63
BGP   +  5/8   23.63
CSL   -  1/8   30.38
CSCO  -3 1/16  64.69
GNT   +  1/4   35.88
ORCL  -2 7/16  46.50
OXHP  +  3/16  72.56
PMSI  ---      11.38
TDW   +  1/8   44.25
                   Day   Month    Year  History
        BORING   -0.33%   1.83%   7.99%  24.26%
        S&P:     -0.10%  -0.33%  14.14%  36.01%
        NASDAQ:  -1.42%  -1.10%   7.27%  33.04%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     23.63   109.88%
  5/24/96  100 Oxford Hea    48.02     72.56    51.09%
   3/5/97  150 Atlas Air     23.06     28.63    24.14%
  6/26/96  100 Cisco Syst    53.90     64.69    20.01%
   2/2/96  200 Green Tree    30.39     35.88    18.06%
  8/13/96  200 Carlisle C    26.32     30.38    15.38%
   3/8/96  400 Prime Medi    10.07     11.38    12.97%
 11/21/96  100 Oracle Cor    48.65     46.50    -4.42%
 12/23/96  100 Tidewater     46.52     44.25    -4.89%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   9450.00  $4947.51
  5/24/96  100 Oxford Hea  4802.49   7256.25  $2453.76
   2/2/96  200 Green Tree  6077.49   7175.00  $1097.51
  6/26/96  100 Cisco Syst  5389.99   6468.75  $1078.76
   3/5/97  150 Atlas Air   3458.74   4293.75   $835.01
  8/13/96  200 Carlisle C  5264.99   6075.00   $810.01
   3/8/96  400 Prime Medi  4027.49   4550.00   $522.51
 11/21/96  100 Oracle Cor  4864.99   4650.00  -$214.99
 12/23/96  100 Tidewater   4652.49   4425.00  -$227.49

                             CASH   $7788.54
                            TOTAL  $62132.29