Boring Portfolio

Boring Portfolio Report
Friday, January 31, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich., January 31, 1997 -- Programmed selling in the closing minutes sent the Dow lower by 11 points (-0.16%) after it had been up strongly for most of the session on Friday. The S&P 500 and Nasdaq indexes closed higher, though. The S&P gained 2 points (+0.25%), while the Nasdaq rose 9 (+0.64%).

For the week, the S&P advanced 2%, to a new high, while the Nasdaq tacked on 1.2%.

This week marks the first birthday of the Boring Portfolio, and Mr. Market delivered his present in the form of a 1.97% gain on Friday, which sent the Borefolio to a new high of $60,174.08. (That doesn't include monthly interest accumulated on the $6,000 cash sitting in the Borefolio kitty, plus any stray dividends yet to get tallied in.) For the week, the Boring account rose 1.9%.

Five Borefolio holdings advanced on Friday, while four declined.

Oracle (Nasdaq: ORCL) recouped some of its earlier losses by rising $1 3/8 on impressive volume of 9.8 million shares. Apparently all that those big money managers needed was some encouragement from the Boring recap yesterday evening. A fine earnings report from SAP AG, the giant German-based supplier of database applications software, probably didn't hurt, either.

The other "problem" stock for the Borefolio, Oxford Health Plans (Nasdaq: OXHP), leapt out of bed and clocked a $3 3/8 advance on impressive volume of 2.7 million shares traded. I could locate no news that might account for Oxford's recovery, although I see that the company is featured in a story in the new issue of Business Week.

The story is about how health care providers are achieving economies of scale and top-quality patient care by creating groups of medical specialists who focus on treating specific disease categories. Since Oxford Health is the acknowledged leader in demonstrating that quality care and good business can co-exist symbiotically, it's no surprise that Oxford has been a pioneer in this practice of forming specialty groups.

Business Week notes that on Feb. 3, Oxford "will go one step further, unveiling a plan to pay groups of doctors and hospitals for specific medical cases. A neurologist, for example, could join with a hospital, therapists, and other professionals to bid on care for stroke victims. The team would be responsible for consultations, lab tests, surgery, and post-operative care, receiving a flat rate for the packaged services."

In the story, Oxford vice president David B. Snow Jr. says that "the resulting integration of providers, and adherence to its care guidelines, could reduce medical costs by 20%. Ultimately, the insurer could restructure itself into several operating companies, each focusing on a disease group."

Cisco Systems (Nasdaq: CSCO) gained $2 1/4 in advance of the company's quarterly earnings report, which will hit the wires on Tuesday after the market closes. The Motley Fool will be covering the post-report conference call, natch.

All of this is prelude to the big Borefolio news. As reported here last night, Borders Group (NYSE: BGP) announced late yesterday that the company expects to report earnings of $1.38 to $1.40 per share (or five to seven cents above consensus) for the fiscal year ending today. In addition, the company announced a two-for-one stock split and offered guidance on earnings for the new fiscal year of

$1.80 per share, which is sixteen cents above the pre-announcement consensus.

Borders said that the guidance is "consistent with management's objective of maintaining a minimum 25% EPS growth rate."


Borders also announced that George Mrkonic would retain his position as Vice Chairman of the Board but would relinquish his post of President to Bruce Quinnell, who will become the President and COO. Quinnell was formerly President of the Waldenbooks division.

Happy birthday, Borefolio. I think I'll take some of that $6,000 and buy you a present next week. Something in real estate, perhaps?

Today's Numbers

Stock  Change    Bid
BGP   +4 5/8   44.63
CSL   -1       29.38
CSCO  +2 1/4   69.63
GNT   -  1/4   38.88
ORCL  +1 3/8   38.75
OXHP  +3 3/8   54.38
PMSI  -  3/8   11.50
SLR   -  3/4   60.25
TDW   +  1/8   47.00
                   Day   Month    Year  History
        BORING   +1.97%   4.58%   4.58%  20.35%
        S&P:     +0.25%   6.13%   6.13%  26.47%
        NASDAQ:  +0.64%   6.88%   6.88%  32.56%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     44.63    98.22%
  6/26/96  100 Cisco Syst    53.90     69.63    29.17%
   2/2/96  200 Green Tree    30.39     38.88    27.93%
   3/8/96  400 Prime Medi    10.07     11.50    14.22%
  5/24/96  100 Oxford Hea    48.02     54.38    13.22%
  8/13/96  200 Carlisle C    26.32     29.38    11.59%
 10/15/96  100 Solectron     54.52     60.25    10.50%
 12/23/96  100 Tidewater     46.52     47.00     1.02%
 11/21/96  100 Oracle Cor    48.65     38.75   -20.35%

    Rec'd   #  Security     In At     Value    Change

  2/28/96  200 Borders Gr  4502.49   8925.00  $4422.51
   2/2/96  200 Green Tree  6077.49   7775.00  $1697.51
  6/26/96  100 Cisco Syst  5389.99   6962.50  $1572.51
  5/24/96  100 Oxford Hea  4802.49   5437.50   $635.01
  8/13/96  200 Carlisle C  5264.99   5875.00   $610.01
   3/8/96  400 Prime Medi  4027.49   4600.00   $572.51
 10/15/96  100 Solectron   5452.49   6025.00   $572.51
 12/23/96  100 Tidewater   4652.49   4700.00    $47.51
 11/21/96  100 Oracle Cor  4864.99   3875.00  -$989.99

                             CASH   $5999.08
                            TOTAL  $60174.08

Transmitted: 1/31/97