Boring Portfolio

Boring Portfolio Report
Thursday, January 9, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (Jan. 9) -- The Dow closed higher by 76 points today, establishing yet another record: 6625.67. Stocks were buoyed by news from the U.S. Labor Department that the so-called "core rate" of inflation in wholesale prices remained inert in December.

The Nasdaq Composite rose 6 points, as did the S&P 500. That translated into gains of 0.44% and 0.86% for the two benchmarks, respectively. NYSE volume was once again well over a half-billion shares. Nasdaq volume was even heavier: 600 million shares. If this pace continues, January could end up as the busiest month ever for U.S. stocks.

Meantime, the Boring Portfolio recovered from yesterday's thrashing, rising 1.08% in net asset value. The day would have been even brighter had it not been for losses in the two "O" stocks: Oxford Health and Oracle.

OXHP fell a dollar today. If you've followed the stock for any time, you know that it's highly volatile, and trying to read deep meaning into its day to day movement is futile.

Just how volatile is it? Well, it so happens that the current issue of Value Line contains an updated report on Oxford Health. Among the many useful bits of information Value Line provides, it rates stocks on a 0 to 100 scale in terms of their "price stability," where 100 means "most stable" of all 1,700 stocks the research service covers. Oxfords rating is 5.

Why is such a volatile stock in the Boring Portfolio, you might ask? Well, the report I wrote back in May when I added the stock to our basket provides the full answer; but a second Value Line index number sums the story up pretty well. That second index -- also calibrated as 0 to 100 -- measures a stocks "price growth persistence" -- that is, the degree to which the stock keeps on keepin' on, despite short-term wiggles and waggles. Oxford's rating for price growth persistence? One hundred. Ciento. Ein hundert.

This afternoon, Oxford issued a statement to the effect that analysts' estimates of $1.75 to $1.80 in earnings per share for 1997 "are accurate." The company also said that membership will top the two million mark by the end of the year. What I find interesting about the statement is that the current consensus of "analysts estimates" is not for $1.75 to $1.80, but for $1.72, according to First Call and IBES. Should anyone think that Oxford Health was unaware of what the latest analyst estimates were, I suggest they think again.

As for Oracle, the stock currently finds itself under a cloud as investors worry about whether that company can continue to grow earnings at the furious pace it set the past few years. Oracle's hardly alone in that regard. Microsoft, Computer Associates, Netscape, and a bunch of other biggies are all getting rained on.

A news item today reported that Oracle and Informix had settled out of court their running dispute over the use of the "Universal Server" brand name. Under the agreement, Informix will continue to use the name for its next-generation database software -- a name that Oracle had previously registered and has been using to refer to its collection of applications for managing diverse kinds of data, including video, sound, and graphics as well as your basic alphanumeric stuff.

Whatever. As a newbie Oracle shareholder, I must say that this kind of news is not exactly the kind of stuff that thrills me. Nor does the 14% loss the Borefolio has incurred since purchasing 100 ORCL stubs on Nov. 21. I await more substantial news from the company.

Enough of the gloomy stuff on such a fine day! Surely a few words of praise are in order for Borders Group. Although many other retailers would just as soon forget the 1996 holiday shopping season, Borders Group reported this morning that their seasonal sales rose 13.8% over 1995, to $618 million. The Borders superstores saw sales leap 39.1%, with comparable store sales up 11.3%. As for the mall-based Waldenbooks, the numbers revealed that Waldens have stemmed their slide in sales; seasonal revenues of $331.3 million were up slightly from last year's $331.1 million.

In light of the results, Borders Group said that "it expects to exceed analysts consensus earnings estimate of $1.29 per share for 1996." Those full-year results will be released in mid-March.

Prime Medical Services rose a quarter-point, also. In the latest installment in its continuing story, PMSI reported today that it had increased its ownership stake in yet another lithotripsy operation -- this time in its home state of Texas. Prime paid $2.2 million to up its stake in Texas Lithotripsy, LP II to 46%, from 21%.

The company also said it expects to report three more such moves in the near future and that "each of these acquisitions will make a favorable contribution to earnings growth in 1997 and beyond."

Now *that's* the kind of substantive news I like to hear!

Today's Numbers

Stock  Change    Bid
BGP   +2 1/8   36.88
CSL   -  1/4   59.88
CSCO  +  5/8   66.88
GNT   +  3/8   36.75
ORCL  -1 5/8   41.75
OXHP  -1       57.13
PMSI  +  1/4   12.13
SLR   +1 1/4   54.38
TDW   +1 1/4   49.25
                   Day   Month    Year  History
        BORING   +1.08%   1.67%   1.67%  17.00%
        S&P 500  +0.86%   1.90%   1.90%  21.43%
        NASDAQ:  +0.44%   2.72%   2.72%  27.40%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     36.88    63.80%
  6/26/96  100 Cisco Syst    53.90     66.88    24.07%
   2/2/96  200 Green Tree    30.39     36.75    20.94%
   3/8/96  400 Prime Medi    10.07     12.13    20.42%
  5/24/96  100 Oxford Hea    48.02     57.13    18.95%
  8/13/96  100 Carlisle C    52.65     59.88    13.72%
 12/23/96  100 Tidewater     46.52     49.25     5.86%
 10/15/96  100 Solectron     54.52     54.38    -0.27%
 11/21/96  100 Oracle Cor    48.65     41.75   -14.18%

    Rec'd   #  Security     In At     Value    Change

  2/28/96  200 Borders Gr  4502.49   7375.00  $2872.51
  6/26/96  100 Cisco Syst  5389.99   6687.50  $1297.51
   2/2/96  200 Green Tree  6077.49   7350.00  $1272.51
  5/24/96  100 Oxford Hea  4802.49   5712.50   $910.01
   3/8/96  400 Prime Medi  4027.49   4850.00   $822.51
  8/13/96  100 Carlisle C  5264.99   5987.50   $722.51
 12/23/96  100 Tidewater   4652.49   4925.00   $272.51
 10/15/96  100 Solectron   5452.49   5437.50   -$14.99
 11/21/96  100 Oracle Cor  4864.99   4175.00  -$689.99

                             CASH   $5999.08
                            TOTAL  $58499.08

Transmitted: 1/9/97