Boring Portfolio

Boring Portfolio Report
Tuesday, January 21, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (Jan. 21) -- The Boring Portfolio managed only a 0.13% gain on a day that saw the major market indexes soar following a generally benign appearance by Federal Reserve Chairman Alan Greenspan before Congress. That gain was sufficient to push the Borefolio over the $60,000 mark and to its second straight new high.

The big Borefolio news this morning was Tidewater's (NYSE: TDW) report of results for its fiscal third quarter. The company posted per-share earnings of $0.68, up 74% over last year's third quarter and up 28% sequentially. That easily bested analysts' consensus forecast of $0.61 and even exceeded the top end of the range of estimates by four cents. Quarterly revenues of $212.4 million were 9.5% above those of the preceding quarter and 28% higher than a year ago.

The follow-up conference call was equally bullish, in my opinion: margins were higher, the company had repurchased 1.57 million shares since early December, and business prospects both domestically and internationally were bright. My report of the conference call will be posted here in The Motley Fool shortly. For those of you who prefer to hear it with your own ears, a taped replay is available until approximately mid-day tomorrow, at 800-475-6701, access # 326739.

You may recall that Tidewater operates a fleet of approximately 650 vessels, the world's largest fleet serving the offshore energy industry. Tidewater's vessels ferry crews and supplies, support research operations, move heavy equipment, and so forth. The company also operates a smaller business that rents and sells natural gas compression equipment.

In today's conference call, President, CEO and chair William O'Malley pointed out that vessel utilization and daily rental rates remained favorable, with each month in the quarter better than the preceding one. In the West African region, for example -- which constitutes approximately one-third of Tidewater's marine operations -- the average day rate increased by $700 in the most recent contract renegotiations.

As I say, it was all terrific news, and the stock rose nicely in the morning. As the day wore on, however, Tidewater’s fine report appears to have gotten caught up in a current of news about softening oil prices on the commodity markets. Driller and oil service stocks nearly all closed lower on the day, some of them sharply. TDW closed lower by $ 7/8. Such is life in the volatile energy biz.

Speaking of volatility, Green Tree Financial (NYSE: GNT) added another dollar to its recent sharp increases to close at $40, again above-average trading volume yet again. The company will report quarterly earnings on Monday.

Among Boring technology holdings, shares of Solectron (NYSE: SLR) rose $ 3/4. Cisco Systems (Nasdaq: CSCO) picked up a fraction on the closing tick but remained unchanged on the bid side, which is where we tally Nasdaq stocks. Perhaps that policy may change now that individual investors can get their limit orders on heavy-volume Nasdaq issues (such as Cisco) publicized -- and even filled?

The third Boring “tech,” Oracle (Nasdaq: ORCL), fell a dollar today and continues to languish at the bottom of the Borefolio -- off nearly 15% from where I purchased it in mid-November. According to a report released today by International Data Corp. of Framingham, Mass., the market for database software slowed in 1996, growing 14.6% to reach revenues of $4.5 billion. "Developers are beginning to move away from Unix workstations and servers as primary platforms for distributed database application development and are embracing lower cost personal computers," according to the accompanying press release.

The report goes on to note that although Oracle remained the number-one supplier of database software with a 36.8% share, Informix jumped into the number-two position, while Microsoft muscled past IBM to become one of the top-five suppliers of database software.

Lastly tonight, shares of Oxford Health Plans (Nasdaq: OXHP) took what may be the first step on the road to recovery, picking up $ 1/8. This follows a recent bout of weakness in the lower extremities brought on by investor concerns about proposed cutbacks in federal Medicare and Medicaid programs. I saw some news today suggesting that President Clinton’s proposal, unveiled today, looked significantly less revolutionary than some had feared.

Today's Numbers

Stock  Change    Bid
BGP   +  7/8   37.13
CSL   -  1/4   31.00
CSCO  ---      74.75
GNT   +1       40.00
ORCL  -1       41.63
OXHP  +  1/8   53.25
PMSI  -  3/8   11.13
SLR   +  3/4   59.50
TDW   -  7/8   50.25
                   Day   Month    Year  History
        BORING   +0.13%   4.30%   4.30%  20.02%
        S&P 500  +0.78%   5.67%   5.67%  25.92%
        NASDAQ:  +0.93%   6.66%   6.66%  32.28%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     37.13    64.91%
  6/26/96  100 Cisco Syst    53.90     74.75    38.68%
   2/2/96  200 Green Tree    30.39     40.00    31.63%
  8/13/96  200 Carlisle C    26.32     31.00    17.76%
  5/24/96  100 Oxford Hea    48.02     53.25    10.88%
   3/8/96  400 Prime Medi    10.07     11.13    10.49%
 10/15/96  100 Solectron     54.52     59.50     9.12%
 12/23/96  100 Tidewater     46.52     50.25     8.01%
 11/21/96  100 Oracle Cor    48.65     41.63   -14.44%

    Rec'd   #  Security     In At     Value    Change

  2/28/96  200 Borders Gr  4502.49   7425.00  $2922.51
  6/26/96  100 Cisco Syst  5389.99   7475.00  $2085.01
   2/2/96  200 Green Tree  6077.49   8000.00  $1922.51
  8/13/96  200 Carlisle C  5264.99   6200.00   $935.01
  5/24/96  100 Oxford Hea  4802.49   5325.00   $522.51
 10/15/96  100 Solectron   5452.49   5950.00   $497.51
   3/8/96  400 Prime Medi  4027.49   4450.00   $422.51
 12/23/96  100 Tidewater   4652.49   5025.00   $372.51
 11/21/96  100 Oracle Cor  4864.99   4162.50  -$702.49

                             CASH   $5999.08
                            TOTAL  $60011.58