Boring Portfolio Report
Tuesday, August 19, 1997
by Greg Markus (TMF
Boring)
ANN ARBOR, Mich. (August 19, 1997) -- Here's how to be a financial genius in today's stock market:
Step 1. Buy the dips.
Step 2. There is no Step 2.
Something tells me there's gotta be more to it than that, but I'd be hard pressed to prove it looking back over the past year or two. Or ten or twenty.
In any event, stocks moved sharply higher Tuesday as the Federal Reserve Board surprised absolutely no one by leaving interest rates untouched in today's FOMC meeting. But if the Fed's action -- or, rather, inaction -- was utterly unsurprising, then why'd the market jump?
Dunno.
It would be tough to beat the S&P 500's 1.48% leap today, let alone the Nasdaq's 1.99% vault, but "tough" is the Boring Portfolio's middle name. The Borefolio soared 2.36%, as eight of nine holdings advanced. (Actually, the Boring Portfolio's middle name is not "tough." It's Irving. But that didn't seem to fit the story line very well.)
Leading the charge was ORACLE (Nasdaq: ORCL), which added $2 11/16 to yesterday's $1 1/4 gain to establish an all-time high at $41 1/8. That's in post-3-for-2-split dollars, by the way, since the split took effect with Monday's trading. Trading volume in ORCL approached 10 million shares.
Oracle and SUN MICROSYSTEMS (Nasdaq: SUNW) launched their latest initiative in the Orasun vs. Wintel war by jointly announcing today that they would "aggressively target" the workgroup database market with versions of Oracle8 for Sun's new two-processor and four-processor Ultra Enterprise workgroup servers.
The "Orasun" move comes soon after MICROSOFT (Nasdaq: MSFT) demo'd its Windows NT/SQL Server software running on COMPAQ (NYSE: CPQ) servers powered by INTEL (Nasdaq: INTC) microprocessors (Wintaq?). With that demonstration, Microsoft et al. asserted they had achieved a lower-cost and equally scalable and reliable alternative to Oracle software running on big-ticket workgroup servers.
Yeah, right.
Beginning immediately, Oracle will offer its Oracle8 database and related tools and apps running on Sun's new Ultra Enterprise 450 workgroup servers and previously introduced Ultra Enterprise 150 server. Oracle and Sun's press release also promised (or threatened, depending on one's point of view) a national advertising campaign scheduled to launch this fall, as well as various promotional activities and additional joint offerings.
BORDERS GROUP (NYSE: BGP) had nearly as strong a day as Oracle did. Borders jumped $1 1/4, or 5.6%, to $23 9/16. Volume of 670,000 shares was more than double that of a typical trading day.
I spotted no news on Borders, but I did spy fresh earnings forecasts in First Call. Following Borders Group's latest quarterly report, analysts upped their consensus estimates to $0.94 per share for this year (ending January 1998) and $1.15 for next year. Based on guidance from Borders management, analysts also expect the company to post average annual EPS gains in the 25 to 30 percent range through the next four or five years. A quick back-of-the-envelope calculation thus suggests 25 X $1.15 = $28 3/4 as a near-term target price -- or 22% above today's closing price.
The Borefolio's sole loser today was CISCO SYSTEMS (Nasdaq: CSCO), which slipped $5/16. The loss may have been connected to bullish news from rival (well, sort of) BAY NETWORKS (NYSE: BAY). Bay announced that its revenues will be better than expected for the current quarter, thanks in part to new products that compete with some of Cisco's newest offerings.
You'll understand, I trust, if I decline to sell the Borefolio's holding
in Cisco based on this news.
Drip Portfolio-- The
start of a 20 year journey.
Fool Message
Boards -- Speak your mind!
Evening News
-- Big brand stocks.
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.
Stock Change Bid ATLS +1 3/8 28.50 BGP +1 1/4 23.56 CSL + 1/8 42.56 CSCO - 5/16 75.69 GNT + 1/16 43.75 ORCL +211/16 41.13 OXHP +2 1/4 78.25 PMSI + 5/8 11.50 TDW + 1/4 49.19
Day Month Year History
BORING +2.36% -1.57% 21.55% 39.87%
S&P: +1.48% -2.97% 25.01% 48.97%
NASDAQ: +1.99% 0.43% 23.99% 53.77%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 23.56 109.33%
5/24/96 100 Oxford Hea 48.02 78.25 62.94%
8/13/96 200 Carlisle C 26.32 42.56 61.68%
2/2/96 200 Green Tree 30.39 43.75 43.97%
6/26/96 100 Cisco Syst 53.90 75.69 40.42%
11/21/96 150 Oracle Cor 32.43 41.13 26.80%
3/5/97 150 Atlas Air 23.06 28.50 23.60%
3/8/96 400 Prime Medi 10.07 11.50 14.22%
12/23/96 100 Tidewater 46.52 49.19 5.72%
Rec'd # Security In At Value Change
2/28/96 400 Borders Gr 4502.49 9425.00 $4922.51
8/13/96 200 Carlisle C 5264.99 8512.50 $3247.51
5/24/96 100 Oxford Hea 4802.49 7825.00 $3022.51
2/2/96 200 Green Tree 6077.49 8750.00 $2672.51
6/26/96 100 Cisco Syst 5389.99 7568.75 $2178.76
11/21/96 150 Oracle Cor 4864.99 6168.75 $1303.76
3/5/97 150 Atlas Air 3458.74 4275.00 $816.26
3/8/96 400 Prime Medi 4027.49 4600.00 $572.51
12/23/96 100 Tidewater 4652.49 4918.75 $266.26
CASH $7890.00
TOTAL $69933.75
