Boring Portfolio

Boring Portfolio Report
Tuesday, June 17, 1997
by Greg Markus (TMF Boring)


ANN ARBOR, Mich. (June 17, 1997) -- -- A Labor Department report released Tuesday morning revealed that inflation in consumer prices remains well under control. The overall CPI rose only 0.1% for the month, with the so-called core rate (excluding food and energy components) rising 0.2%, in line with expectations. Stocks reacted by staging a replay of Monday’s results: the Dow edged lower by 11 points, while the S&P 500 inched less than a point higher into record territory (+0.06%), and the Nasdaq plowed ahead in a effort to make up lost ground, rising 0.78% to an all-time closing high of 1443.

The Boring Portfolio outpaced the market averages, gaining 0.83% to close at its own new high: $64,439. Borefolio gainers outnumbered losers two-to-one.

In Monday’s recap, I relayed one industry-watcher’s assessment of certain fundamentals affecting TIDEWATER (NYSE: TDW) and why he thought that stock still has legs. The bullish story focused on continued strong worldwide demand for drilling rigs and associated services -- a demand that would readily sop up any increased supply of rigs and boats and that would provide sustained support for leasing rates.

No sooner had our little story hit the wires than it was confirmed by a Reuters release, datelined Dubai. Reuters reported that “a worldwide rig shortage and stepped up exploration and development activity following last year's oil price rally have pushed daily drilling rates in the Gulf to their highest level for 15 years,” according to drilling contractors and energy firms in the region. The story went on to say that high rental rates were “leading companies to sign long-term rig contracts for ... up to eight years.”

Tidewater has a strong presence in the Persian Gulf, as it does in nearly all regions of the world where offshore drilling is active. It’s perhaps no coincidence, then, that the company’s stock swelled $2 7/8 on nearly triple its average trading volume today.

CISCO SYSTEMS (Nasdaq: CSCO) also made a good showing, gaining $1 3/16. Cisco reported Tuesday that the Beijing Telecommunications Administration (BTA) will be using Cisco’s StrataCom Asynchronous Transfer Mode (ATM) switches for the city's first metropolitan-area network. The new network will carry much of Beijing's Internet, corporate and intragovernmental data traffic. Earlier this month, Cisco won a contract to supply equipment for China Financial Network, a national data network that links banks and financial institutions in nearly 200 cities.

The big Borefolio story, however, is the report of fourth quarter and fiscal 1997 results by ORACLE CORP. (Nasdaq: ORCL). Oracle shares closed at a new high of $53 1/4. up $1, ahead of the release of that report late this afternoon.

Fourth-quarter revenues increased 33% over the year-ago period to a record $1.95 billion. Net earnings grew 35%, to $0.54 per share. That was in line with analysts’ consensus estimate. According to First Call, analysts’ estimates ranged from $0.52 to $0.57.

Overall license and other related sales increased 26% in Q4. Sales and license revenues for Applications increased 78% year-over-year in the quarter. Server revenues grew 22%, while Tools revenues fell 7%.

In its press release, Oracle reported that growth worldwide was “balanced,” despite a 4 percentage point negative currency translation during the quarter. Oracle Americas reported the greatest geographic revenue growth, up 44%, followed by Asia Pacific, up 25%, and EMEA (Europe, Middle East and Africa), up 20%, versus the same period last year.

An hour-long conference call began shortly after 5:30pm EDT. In it, company management expressed enthusiasm for the strong product line that Oracle will have as it begins fiscal 1998. In particular, Oracle8 will be released officially on June 24 at Radio City Music Hall in New York. Management was somewhat less happy with sales that were somewhat below expectations in certain global markets, including parts of Europe and Asia.

A recorded replay of the conference call is available for 24 hours at (402) 220-4217. The Motley Fool offers a special collection on the company and the earnings today, and The Fool will also provide a summary of the conference call as soon as possible.

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(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  +  1/16  34.88
BGP   +  1/4   23.63
CSL   -  1/4   33.50
CSCO  +1 3/16  68.69
GNT   -  3/8   35.38
ORCL  +1       53.25
OXHP  -  1/8   69.00
PMSI  +  1/8   11.75
TDW   +2 7/8   44.00
                   Day   Month    Year  History
        BORING   +0.83%   5.61%  12.00%  28.88%
        S&P:     +0.06%   5.44%  20.75%  43.89%
        NASDAQ:  +0.78%   3.06%  11.78%  38.63%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     23.63   109.88%
   3/5/97  150 Atlas Air     23.06     34.88    51.25%
  5/24/96  100 Oxford Hea    48.02     69.00    43.68%
  6/26/96  100 Cisco Syst    53.90     68.69    27.44%
  8/13/96  200 Carlisle C    26.32     33.50    27.26%
   3/8/96  400 Prime Medi    10.07     11.75    16.70%
   2/2/96  200 Green Tree    30.39     35.38    16.41%
 11/21/96  100 Oracle Cor    48.65     53.25     9.46%
 12/23/96  100 Tidewater     46.52     44.00    -5.43%

    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   6900.00  $2097.51
   3/5/97  150 Atlas Air   3458.74   5231.25  $1772.51
  6/26/96  100 Cisco Syst  5389.99   6868.75  $1478.76
  8/13/96  200 Carlisle C  5264.99   6700.00  $1435.01
   2/2/96  200 Green Tree  6077.49   7075.00   $997.51
   3/8/96  400 Prime Medi  4027.49   4700.00   $672.51
 11/21/96  100 Oracle Cor  4864.99   5325.00   $460.01
 12/23/96  100 Tidewater   4652.49   4400.00  -$252.49

                             CASH   $7788.54
                            TOTAL  $64438.54