Boring Portfolio

Boring Portfolio Report
Friday, August 8, 1997
by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (Aug. 8, 1997) -- Your Boring Portfolio manager returned from a ten-day vacation in Hawaii this morning to find that Mr. Market had a "welcome home" surprise all prepared.


Stocks tumbled harder than a boogie-boarder caught inside at Makaha on Friday. After being shoved down as much as 220 points, the Dow ended Friday's session off 157 (-1.91%). The S&P 500 submerged 18 points (-1.86%), while the Nasdaq sank 26, or -1.58%.

For its part, the Boring Portfolio dived 0.91% -- not nearly as spectacular a wipeout as the benchmark averages, but a sand-in-the-suit El Floppolo all the same. Three Borefolio holdings actually managed to make headway against the undertow Friday, while five were sucked under. OXFORD HEALTH PLANS (Nasdaq: OXHP) stayed put on the beach, recuperating after suffering a series of nasty falls the past three days.

TIDEWATER (NYSE: TDW) ebbed $2 11/16 along with a weak oil services sector, and GREEN TREE FINANCIAL (NYSE: GNT) shed $1 3/8 as financial stocks were hit by rising bond yields. On the upside, CARLISLE COMPANIES (NYSE: CSL) rose $1 5/16 to $43 after the company announced an increase in its quarterly dividend to $0.14 per share, which annualizes out to around 1.3%. ORACLE (Nasdaq: ORCL) picked up $1/2, and PRIME MEDICAL (Nasdaq: PMSI) gained $1/8.

For the week, the Borefolio fell 1.28% -- not quite as bad as the S&P 500 (-1.44%) but well back of the Nasdaq (+0.26%).

On Tuesday, Oxford Health and CISCO SYSTEMS (Nasdaq: CSCO) both posted their quarterly results -- and fine results they were, too. Yet both stocks sold off. Cisco ended the week off $2 3/4 (-3.4%), while Oxford slumped nearly 11%, to $74.

Momentum investors may have jumped ship when Oxford announced that founder Stephen Wiggins was stepping down as CEO and that company president William Sullivan would assume that title. When certain reporters suggested on a possible tie between the management shuffle and a recent agreement between Oxford and NY Attorney General Dennis Vacco requiring that Oxford pay interest to doctors and hospitals on any medical claims left unpaid longer than 30 days, the selloff accelerated.

As an article in the Aug. 25 issue of Business Week reports, sellers may have "missed the point."

Sullivan had been running day-to-day operations at Oxford for nearly a year already. Tuesday's announcement simply formalized the status quo. Wiggins stays on as chairman and a company officer to focus on ventures that could offer tremendous payoffs for Oxford down the road, including expansion into new markets and the further development of Oxford Specialty Management, which, according to Business Week, Wiggins says will become "far bigger than the health-plan business."

Not one to waste any time, Oxford announced on Thursday that it has agreed to purchase Riscorp Health Plans, a Sarasota, Florida health insurer that offers point of service (POS) and HMO health plans to 15,000 members in the Orlando, Tampa, Jacksonville, Miami and southwest Florida area. In the press release, new CEO Sullivan is quoted as saying that Riscorp offers "an ideal platform" for Oxford to grow its commercial and Medicare business in Florida.

Appearing on CNBC at midweek, Sullivan stated that the company's goal is to grow by 35% annually over the next five years. With expansion into the Chicago and Florida markets already well under way, with the Medicare reform agreement in Congress opening up major new opportunities for Oxford, and with plans being implemented to grow the specialty care business dramatically, the Borefolio will hang on tightly to its investment in Oxford, thanks.

As for Cisco, company CEO John Chambers was asked in the conference call following its earnings report whether he was being "more conservative than usual" in providing guidance to analysts about Cisco's new fiscal year which a little more than a week ago.

"No," said Chambers. In fact, he continued, he feels better about the industry and Cisco's future now than he did a quarter or two ago. Much of the conference call focused on Cisco's strategy to capitalize upon recent acquisitions, new home-grown technology, and strategic partnerships to dramatically step up the company's sales to Internet service providers.

Next up on the earnings report calendar is Borefolio leader BORDERS GROUP (NYSE: BGP). Borders will probably report late in the coming week. Analysts are looking for a penny loss for the July quarter, versus a three-cent loss in the year-ago period. For the fiscal year ending January 1998, the current consensus estimate is for earnings of $0.92 per share, which would be a 31% improvement over last year.

Drip Portfolio-- Criteria for long-term buys, part 2.
Fool Message Boards -- Speak your mind!
Evening News -- The Media's Wild Ride.
Daily Double
-- Yahoo! this weekend.
Daily Trouble -- Value in this butchered stock?
The Fool Portfolio -- Fool Port tied with Boring.
Fool Four -- 23% annualized.

(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 3/16  25.94
BGP   -  1/4   23.88
CSL   +1 5/16  43.00
CSCO  -1 3/4   77.06
GNT   -1 3/8   44.19
ORCL  +  1/2   57.38
OXHP  ---      74.00
PMSI  +  1/8   11.25
TDW   -2 11/16  51.06
                   Day   Month    Year  History
        BORING   -0.91%  -2.58%  20.30%  38.44%
        S&P:     -1.86%  -2.18%  26.03%  50.18%
        NASDAQ:  -1.58%   0.30%  23.82%  53.56%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     23.88   112.10%
  8/13/96  200 Carlisle C    26.32     43.00    63.34%
  5/24/96  100 Oxford Hea    48.02     74.00    54.09%
   2/2/96  200 Green Tree    30.39     44.19    45.41%
  6/26/96  100 Cisco Syst    53.90     77.06    42.97%
 11/21/96  100 Oracle Cor    48.65     57.38    17.93%
   3/5/97  150 Atlas Air     23.06     25.94    12.49%
   3/8/96  400 Prime Medi    10.07     11.25    11.73%
 12/23/96  100 Tidewater     46.52     51.06     9.75%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   9550.00  $5047.51
  8/13/96  200 Carlisle C  5264.99   8600.00  $3335.01
   2/2/96  200 Green Tree  6077.49   8837.50  $2760.01
  5/24/96  100 Oxford Hea  4802.49   7400.00  $2597.51
  6/26/96  100 Cisco Syst  5389.99   7706.25  $2316.26
 11/21/96  100 Oracle Cor  4864.99   5737.50   $872.51
   3/8/96  400 Prime Medi  4027.49   4500.00   $472.51
 12/23/96  100 Tidewater   4652.49   5106.25   $453.76
   3/5/97  150 Atlas Air   3458.74   3890.63   $431.89

                             CASH   $7890.00
                            TOTAL  $69218.13