Boring Portfolio Report
Monday, March 3, 1997
by Greg Markus (MF Boring)
ANN ARBOR, Mich. (March 3, 1997) -- This first trading day of March smiled upon big-cap stocks today, nodded pleasantly to middle-sized issues, and largely ignored the small fry. The Dow Jones Industrial Average rose 0.60%, the S&P 500 gained 0.57%, and the, uh,"technology-laden" Nasdaq Composite managed to post a 0.17% advance.
"Laden" is the word for it. The weight of technology stocks hangs heavy on the neck of the Boring Portfolio. Altogether the portfolio shed a bit more than one percent in net asset value Monday, and it would have been worse yet had not the accumulated interest and dividends from the month of January made it into the Borefolio account today.
CISCO SYSTEMS (Nasdaq: CSCO) continued lower, actually falling at one point below the price at which I purchased the stock last June. At days end, Cisco stood -- sort of -- at $54 1/8 on the bid, down $1 1/4. The stock of the leading company in one of the fastest growing industries on earth is now trading at a multiple to 1997 earnings comparable to that of certain soda pop purveyors and soap manufacturers. At some point, a market in love with perhaps two dozen stocks out of 7,000 surely must correct this discrepancy.
Cisco announced today that it has taken a minority equity interest in privately-held Software.com based in Santa Barbara, California. Cisco and Software.com have agreed to develop and market networking technology to provide scalable dynamic Internet address allocation and secure networked commerce. According to the press release, customers will be able to use the new technology to scale their online networked services -- including remote access, telecommuting, networked commerce and email -- while maintaining a high level of security and reliability.
ORACLE CORP. (Nasdaq: ORCL), another of the Borefolios troubled tech holdings, had an announcement of their own today. Oracle said it has begun the final phase of its beta-test of Oracle8, the company's long-awaited object-relational database software. According to the press release, the Oracle8 server is being shipped to more than 170 beta program participants in 28 countries who will use Oracle8 to develop and test an array of applications on seven different hardware platforms.
Oracle is also making its "Sedona" object-oriented development environment available to a subset of beta testers. Sedona is intended to allow developers to build special-purpose software components or "cartridges" to work with Oracle8. New versions of Oracle's client/server and Web application development tools, will be available to utilize along with Oracle8.
The company says that more than 1000 Oracle staff are trained to provide technical support and consulting services to customers implementing the new systems. After being down for much of the day, Oracle shares managed to gain $1/8.
Ill take it.
SOLECTRON (NYSE: SLR) is the third Borefolio technology holding. The stock of this Baldrige prize-winning company, the leader in electronic systems design and assembly, flopped $2 7/8 -- on absolutely no news that I could find. At its current price, Solectron stock is trading at less than a market multiple to its projected earnings for its half-completed fiscal year, ending in August -- and this for share in a company expected to grow EPS 26% this year and 25 to 30 percent over the longer haul.
The mind boggles.
Speaking of boggling, TIDEWATER (NYSE: TDW) is boggling around, drifting 10% from where I purchased the stock just before Christmas. Crude oil prices dipped below to $20 mark the other, triggering continued selling of oilpatch stocks. TDW sunk $1 1/8.
One might have thought that the omniscient market might have discounted the fact that the weather often starts warming up in the Northern Hemisphere round about this time of year. Even a toasty warm, energy-efficient world needs oil and gas, and offshore drillers need Tidewaters fleet of offshore support vessels.
Should I sell some of these troubled issues?
Sell?? Heck, if I had the money, Id be buying.
Hey! I do have the money! When the going gets tough, the tough go shopping. And thats what I intend to do. Stop by tomorrow, and I'll let you know what I'm gonna buy.
(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 -------------------- BGP - 1/8 42.00 CSL - 1/4 32.50 CSCO -1 1/4 54.13 GNT - 1/8 37.38 ORCL + 1/8 39.38 OXHP --- 55.50 PMSI - 1/4 10.88 SLR -2 7/8 50.00 TDW -1 1/8 41.88
Day Month Year History BORING -1.03% -1.03% -1.05% 13.87% S&P: +0.57% 0.57% 7.37% 27.94% NASDAQ: +0.17% 0.17% 1.56% 25.96% Rec'd # Security In At Now Change 2/28/96 200 Borders Gr 22.51 42.00 86.56% 8/13/96 200 Carlisle C 26.32 32.50 23.46% 2/2/96 200 Green Tree 30.39 37.38 22.99% 5/24/96 100 Oxford Hea 48.02 55.50 15.57% 3/8/96 400 Prime Medi 10.07 10.88 8.01% 6/26/96 100 Cisco Syst 53.90 54.13 0.42% 10/15/96 100 Solectron 54.52 50.00 -8.30% 12/23/96 100 Tidewater 46.52 41.88 -9.99% 11/21/96 100 Oracle Cor 48.65 39.38 -19.06% Rec'd # Security In At Value Change 2/28/96 200 Borders Gr 4502.49 8400.00 $3897.51 2/2/96 200 Green Tree 6077.49 7475.00 $1397.51 8/13/96 200 Carlisle C 5264.99 6500.00 $1235.01 5/24/96 100 Oxford Hea 4802.49 5550.00 $747.51 3/8/96 400 Prime Medi 4027.49 4350.00 $322.51 6/26/96 100 Cisco Syst 5389.99 5412.50 $22.51 10/15/96 100 Solectron 5452.49 5000.00 -$452.49 12/23/96 100 Tidewater 4652.49 4187.50 -$464.99 11/21/96 100 Oracle Cor 4864.99 3937.50 -$927.49 CASH $6121.70 TOTAL $56934.20