Boring Portfolio Report
Monday, June 16, 1997
by Greg Markus (TMF
Boring)
ANN ARBOR, Mich. (June 16, 1997) -- Wonder of wonders, the Dow actually fell 10 points on Monday on a relatively uneventful session. The S&P 500 inched less than a point higher into record territory (+0.07%), while the Nasdaq gained 9 (+0.63%) to close at 1432, also a new record.
The Boring Portfolio rose 0.49% in net value. Seven holdings moved higher, while two declined.
With more than 9.5 million shares traded on Monday, ORACLE CORP. (Nasdaq: ORCL) was the most active stock on the Nasdaq. ORCL gained $5/16 to close at a record high of $52 1/4 (bid).
The leading database software company will report its fiscal third quarter results tomorrow after the close of trading. According to First Call, the consensus forecast is for earnings of $0.54 per share, with a range running from $0.52 to $0.57. The Motley Fool will cover the earnings with a special collection, and Oracle's follow-up conference call as well.
CISCO SYSTEMS (Nasdaq: CSCO) was the second most actively traded Nasdaq stock today. Cisco rose $13/16 on the bid. I saw no significant news on Cisco to pass along -- which is worthy of note in itself.
OXFORD HEALTH PLANS (Nasdaq: OXHP) was the only Borefolio stock to decline appreciably today, losing $1 5/8. Merrill Lynch lowered its near-term ratings on a number of healthcare stocks, including UNITED HEALTHCARE (NYSE: UNH), WELLPOINT (NYSE: WLP), PACIFICARE (Nasdaq: PHSYA), and Oxford competitor AETNA (NYSE: AET). Oxford Health was noticeably absent from the list, but the stock presumably fell in sympathy with the group.
GREEN TREE FINANCIAL (NYSE: GNT) grew $5/8, to $35 3/4. A story in the current issue of Barrons relates how the market for securities backed by home equity (HE) loans has exploded recently. (HE) securitizations in the first quarter of this year totaled $10.2 billion -- double the year-ago figure.
A central theme of the article is that as the rate of delinquencies creeps up, investors are at last beginning to differentiate between deals offered by the larger, better-capitalized companies and those offered by smaller, riskier competitors.
Although it is not mentioned by name in the article, Green Tree is, of course, well-ensconced among at the tippy-top of the quality tier. And if the trend follows the path described in Barrons -- a path that Green Trees management has also described, by the way -- it should redound to the benefit of the St. Paul-based financial services company.
In that regard, earlier this month Fitch Investors Service rated Green Tree's $281 million HE-backed offering 'AAA.' Fitch also awarded ratings ranging from AA+ to BBB+ to a series of smaller HE offerings by Green Tree.
TIDEWATER (NYSE: TDW) rose $1/2 as crude prices moved modestly higher on Monday. Last week, I had the pleasure of corresponding with Jim Rollyson about the outlook for marine services companies. Jim helps cover that group for Raymond James & Associates. In his opinion, the recent slide in the share prices of a number of stocks in the group -- including SEACOR (NYSE: CKH) and TRICO MARINE (Nasdaq: TMAR), as well as Tidewater -- was overdone.
Traders are concerned about the impact on dayrates of new vessels that are being built. But Jims view (which corresponds to Tidewaters, by the way) is that the new capacity could be readily absorbed by new drilling rigs scheduled to come on line in the next few years. Attrition of older vessels is another factor that the market has possibly underestimated, as well as the conversion of some existing vessels for 3D seismic exploration.
Rollyson concludes: This all adds up to the fact that we will need another 75 to 100 vessels in the oncoming three to five years just to keep up with demand.
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Stock Change Bid ATLS + 1/16 34.81 BGP + 3/8 23.38 CSL - 1/8 33.75 CSCO + 13/16 67.50 GNT + 5/8 35.75 ORCL + 5/16 52.25 OXHP -1 5/8 69.13 PMSI + 1/8 11.63 TDW + 1/2 41.13
Day Month Year History
BORING +0.49% 4.75% 11.08% 27.82%
S&P: +0.07% 5.38% 20.68% 43.80%
NASDAQ: +0.63% 2.26% 10.92% 37.56%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 23.38 107.66%
3/5/97 150 Atlas Air 23.06 34.81 50.98%
5/24/96 100 Oxford Hea 48.02 69.13 43.94%
8/13/96 200 Carlisle C 26.32 33.75 28.21%
6/26/96 100 Cisco Syst 53.90 67.50 25.23%
2/2/96 200 Green Tree 30.39 35.75 17.65%
3/8/96 400 Prime Medi 10.07 11.63 15.46%
11/21/96 100 Oracle Cor 48.65 52.25 7.40%
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 9350.00 $4847.51
5/24/96 100 Oxford Hea 4802.49 6912.50 $2110.01
3/5/97 150 Atlas Air 3458.74 5221.88 $1763.14
8/13/96 200 Carlisle C 5264.99 6750.00 $1485.01
6/26/96 100 Cisco Syst 5389.99 6750.00 $1360.01
2/2/96 200 Green Tree 6077.49 7150.00 $1072.51
3/8/96 400 Prime Medi 4027.49 4650.00 $622.51
11/21/96 100 Oracle Cor 4864.99 5225.00 $360.01
12/23/96 100 Tidewater 4652.49 4112.50 -$539.99
CASH $7788.54
TOTAL $63910.42