Boring Portfolio

Boring Portfolio Report
Thursday, August 14, 1997
by Greg Markus (TMF Boring)


ANN ARBOR, Mich. (August 14, 1997) -- Thursday morning's consumer prices report re-re-re-re-re-reaffirmed what Wednesday's producer prices data showed: inflation's on vacation.

In response, stocks jiggled in only a slightly more subdued version of yesterday's slam dance. The Dow careened from +70 to -37, ending the session up 14 (0.17%) at 7942. The S&P and Nasdaq each picked up 3, or +0.30% and +0.21%, respectively.

The Boring Portfolio surged 0.64%, with six holdings up, two down, and ATLAS AIR (Nasdaq: ATLS) holding a steady course at an altitude of $27 1/8.

OXFORD HEALTH PLANS (Nasdaq: OXHP) rebounded $2 1/8 as HMO stocks showed healthy gains following stronger than expected earnings results from MIDATLANTIC MEDICAL (NYSE: MME).

In contrast, TIDEWATER (NYSE: TDW) sank $1 3/8 as offshore drilling and marine services stocks were drilled on rumors that GLOBAL MARINE (NYSE: GLM) was having difficulties in negotiating higher day rates for some of its jackup drilling rigs.

According to a Dow Jones story released about an hour before the market closed, Global Marine confirmed that it is looking for work for two of its rigs currently under contract with UNOCAL (NYSE: UCL) in the Gulf of Mexico.

Global reportedly said that Unocal wants one of the rigs back in the fall, however, and Global expects to find work for the other rig within a week or two. Global also reportedly said that, contrary to some rumors, none of the company's rigs have accepted new contracts at reduced rates.

Tidewater stock was off as much as $3 1/2 in the morning but trimmed much of that loss during the balance of Thursday's session.

After the market closed, BORDERS GROUP (NYSE: BGP) reported fiscal second quarter sales of $466 million, up 13% over a year ago, and net earnings of a penny a share versus a year-ago loss of three cents. Consolidated gross margins increased to 24.5% of sales from 23.6% for the second quarter of fiscal 1997.

The EPS result beat the Street's consensus expectation of a one-cent loss and also exceeded the top-end estimate of break-even for the seasonally slow quarter. Borders management said that in light of the results for the second quarter, they were comfortable with revising EPS guidance upwards by two cents for the full year, to $0.94.

Eight Borders superstores opened during the quarter, bringing the total to 171 as compared with 127 a year ago. Waldenbooks closed five units and opened four during the quarter, bringing their total to 929 versus 966 at the end of last July.

Management attributed the better than expected results to a combination of strong sales performance at both Borders and Waldenbooks, as well as favorable gross margins and expense control -- offset in part by strategic spending on new growth initiatives.

Among the "new growth initiatives" is Borders's Web site, which management confirmed will be up and running for online sales and service in the second half of this year.

Borders execs confirmed that other business initiatives were also being actively pursued but declined to comment further for competitive reasons. There have been persistent rumors that Borders would open a store outside of the U.S. soon, but that was not mentioned in the follow-up conference call, which ended a few minutes before the Borefolio recap's evening deadline.

The Motley Fool will provide a summary of the conference call shortly.

Drip Portfolio-- Criteria for long-term buys, part 2.
Fool Message Boards -- Speak your mind!
Evening News -- Risk v. Reward.
Daily Double
-- Grupo Radio Centro.
Daily Trouble -- Value in this butchered stock?
The Fool Portfolio -- Fool Port tied with Boring.
Fool Four -- 23% annualized.


(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.


TODAY'S NUMBERS
Stock  Change    Bid
ATLS  ---      27.13
BGP   +  5/16  23.13
CSL   +  3/16  42.81
CSCO  +1 7/8   76.94
GNT   -  3/16  44.13
ORCL  +1       57.75
OXHP  +2 1/8   74.88
PMSI  -  1/8   10.75
TDW   -1 3/8   49.00
                  Day   Month    Year  History
        BORING   +0.64%  -3.24%  19.49%  37.51%
        S&P:     +0.30%  -3.10%  24.84%  48.77%
        NASDAQ:  +0.21%  -0.45%  22.90%  52.42%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     23.13   105.44%
  8/13/96  200 Carlisle C    26.32     42.81    62.63%
  5/24/96  100 Oxford Hea    48.02     74.88    55.91%
   2/2/96  200 Green Tree    30.39     44.13    45.21%
  6/26/96  100 Cisco Syst    53.90     76.94    42.74%
 11/21/96  100 Oracle Cor    48.65     57.75    18.71%
   3/5/97  150 Atlas Air     23.06     27.13    17.64%
   3/8/96  400 Prime Medi    10.07     10.75     6.77%
 12/23/96  100 Tidewater     46.52     49.00     5.32%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   9250.00  $4747.51
  8/13/96  200 Carlisle C  5264.99   8562.50  $3297.51
   2/2/96  200 Green Tree  6077.49   8825.00  $2747.51
  5/24/96  100 Oxford Hea  4802.49   7487.50  $2685.01
  6/26/96  100 Cisco Syst  5389.99   7693.75  $2303.76
 11/21/96  100 Oracle Cor  4864.99   5775.00   $910.01
   3/5/97  150 Atlas Air   3458.74   4068.75   $610.01
   3/8/96  400 Prime Medi  4027.49   4300.00   $272.51
 12/23/96  100 Tidewater   4652.49   4900.00   $247.51

                             CASH   $7890.00
                            TOTAL  $68752.50