Boring Portfolio

Boring Portfolio Report
Friday, January 3, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (Jan. 3) -- Yesterday, technology was dead, CompUSA apparently couldn't give computers away, and the Boring Portfolio lost 1.65% in a matter of hours. Today, technology is king, computer sales are projected to be robust in '97 (according to Erika Klauer at Salomon Brothers), and the Borefolio rose a very unboring 2.50%. Some days the bear eats you, and some days you eat the bear, I guess.

By comparison, the S&P 500 advanced 1.50% (11 points), the Dow 1.58% (102 points), and the Nasdaq 2.35% (30 gorgeous points). Despite today's fine gains, the S&P 500 and Borefolio closed down for the week: the S&P by 1.15% and the Borefolio by 0.54%. The Nasdaq, however, finished the week higher by 1.49%.

Seven Boring holdings advanced on Friday, while Borders Group and Tidewater declined fractionally.

Borders's share price is undoubtedly feeling some of the effects of ambient bad-mouthing of holiday retail sales. On Thursday, CompUSA and some department stores indicated that their Christmas selling had been soft. This morning, a Wall Street Journal story noted that 1996 appears to conform to a pattern of December sales becoming progressively less dominant as a proportion of annual retail spending. In the story, David Wyss, an economist at DRI/McGraw-Hill, was quoted as saying "There is a clear trend of Christmas becoming less important."

In a commercial sense, I assume he meant.

What's all this mean for Borders? I rung 'em up today and was informed that the company is in a quiet period prior to their report of quarterly earnings to date on January 9, prior to market open. For what it's worth, Christopher Vroom, a retail analyst at Alex. Brown, told Reuters the other day that "specialty retailers were a bright spot this season," and he specifically mentioned Borders as an example.

I also note a new SEC filing indicating that Bruce Quinnell, President and COO of the Waldenbooks division of Borders Group, made an open-market purchase of 12,000 shares of BGP in early December for $36 5/8 to $36 7/8 per share. If my math is right, that works out to around $441,000.

After checking in with Borders, I followed up with Carlisle Companies to confirm when CSL would begin trading at it's split-adjusted price. I was informed by Carlisle's corporate counsel's office that the NYSE would commence trading the stock at the new price the day after the new shares had been mailed out. That mailing is scheduled for Jan. 15, so look for CSL's nominal share price to get halved on the 16th, assuming all goes according to plan. Shares of Carlisle gained $1 1/8 today, to close at $60 even.

Oxford Health rose $2 7/8 (on the bid side) today, in the wake of Thursday evening's news that the Ox would join the ranks of the 400 companies comprising the S&P Midcap Index after the close of market on January 7. Since mutual funds that mirror the Midcap Index will now be obliged to add OXHP to their holdings, this will add to demand for the shares.

In a story in yesterday's Los Angeles Times, a crew of California stock-pickers offered up some of their favorites for 1997. Todd Bakar, computer industry analyst at Hambrecht & Quist, named Compaq, Read-Rite, and... Solectron. The story noted that, "even though Solectron has already been one of the best technology investments of the decade, Bakar expects another 50% jump in the share price, to $75 from $50."

A journey of a thousand miles begins with but a single step... or maybe even 7/8ths of a step. In any event, that's how much SLR moved today toward that $75 mark. Analysts are expecting Solectron to earn $2.73 per share for the fiscal year ending in August. Tack onto that a multiple of 27 -- in line with the company's projected earnings growth over the next 3 to 5 years -- and you're there.

I close tonight, and this week that launched 1997, by mentioning that Cisco soared $2 3/4 today, Oracle rose $2 5/8, Green Tree gained $5/8, and Prime Medical rocketed $7/8 (bid), or 7.6%. I don't have anything to report on any of those stocks, but I sure enjoyed rattling off the stats.

Happy New Year!

Today's Numbers


Stock  Change    Bid
--------------------
BGP   -  3/8   34.75
CSL   +1 1/8   60.00
CSCO  +2 3/4   65.50
GNT   +  5/8   37.50
ORCL  +2 5/8   44.50
OXHP  +2 7/8   59.00
PMSI  +  7/8   12.38
SLR   +  7/8   52.63
                   Day   Month    Year  History
        BORING   +2.50%   0.80%   0.80%  16.00%
        S&P 500  +1.50%   0.99%   0.99%  20.34%
        NASDAQ   +2.35%   1.53%   1.53%  25.92%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     34.75    54.36%
   2/2/96  200 Green Tree    30.39     37.50    23.41%
   3/8/96  400 Prime Medi    10.07     12.38    22.91%
  5/24/96  100 Oxford Hea    48.02     59.00    22.85%
  6/26/96  100 Cisco Syst    53.90     65.50    21.52%
  8/13/96  100 Carlisle C    52.65     60.00    13.96%
 10/15/96  100 Solectron     54.52     52.63    -3.48%
 12/23/96  100 Tidewater     46.52     44.38    -4.62%
 11/21/96  100 Oracle Cor    48.65     44.50    -8.53%


    Rec'd   #  Security     In At     Value    Change

  2/28/96  200 Borders Gr  4502.49   6950.00  $2447.51
   2/2/96  200 Green Tree  6077.49   7500.00  $1422.51
  6/26/96  100 Cisco Syst  5389.99   6550.00  $1160.01
  5/24/96  100 Oxford Hea  4802.49   5900.00  $1097.51
   3/8/96  400 Prime Medi  4027.49   4950.00   $922.51
  8/13/96  100 Carlisle C  5264.99   6000.00   $735.01
 10/15/96  100 Solectron   5452.49   5262.50  -$189.99
 12/23/96  100 Tidewater   4652.49   4437.50  -$214.99
 11/21/96  100 Oracle Cor  4864.99   4450.00  -$414.99


                             CASH   $5999.08
                            TOTAL  $57999.08



Transmitted: 1/3/97