Boring Portfolio

Boring Portfolio Report
Thursday, September 18, 1997
by Greg Markus (TMFBoring)

ANN ARBOR, Mich. (Sept. 18, 1997) - Stocks settled back from their midday highs on Thursday but still closed up nicely, with the Dow and S&P 500 each rising 0.46% and the Nasdaq up 0.21%.

The Boring Portfolio added 0.69% to its net asset value, establishing a new high at $73,828. Five Boring holdings rose on the session and three fell, while lithotripsy leader, PRIME MEDICAL SERVICES (Nasdaq: PMSI) remained lodged at $14 3/8.

Some days there's absolutely nothing to report from Borefolio HQ. Other days the news comes streaming in. Today was one of the latter.

Late last night, ATLAS AIR (Nasdaq: ATLS) announced that Mickey Foret had stepped down as president and that founder and CEO Michael Chowdry would reassume that position.

In the press release, Chowdry stated, "Atlas' recent performance has not been up to the standards we have set for ourselves to fully achieve our potential for our customers and employees, and to maximize our shareholders' value."

"I have therefore decided to roll up my sleeves and reassume my original role in the active day-to-day management of Atlas Air to ensure that we focus on those business attributes that we know work -- keeping our customers satisfied, expanding our base of business to new customers around the world and remaining the low-cost air cargo outsource provider and industry leader," he continued.

Chowdry concluded, "Current business trends are quite favorable for Atlas, and we must be agile enough to quickly capitalize on emerging opportunities. In particular, we look forward to 1998 and to the delivery of the first four of our 747-400 freighters and the new marketing opportunities they represent."

At least some shareholders appear to have greeted this news with less than unbridled enthusiasm. ATLS descended $13/16 in above-average trading activity.

Next on the Boring alphabetical roll-call comes BORDERS GROUP (NYSE: BGP). Borders announced today that its board authorized an increase in the company's share repurchase program from $50 million to $100 million, plus any proceeds and tax benefits resulting from any stock option exercises.

Some companies announce stock buyback authorizations and then repurchase only a token amount, if any. Not Borders. In the conference call following Borders's second quarter earnings report, management said the company had repurchased $6 million in stock in the year to date.

BGP gained $9/16 to close at the stock's all-time high of $27 1/2.

The Borefolio's two "C" stocks slipped fractionally lower today. No news from CARLISLE COMPANIES (NYSE: CSL), whose stock eased $1/8 after setting consecutive new highs. CISCO SYSTEMS (Nasdaq: CSCO) backed off $3/16 on the bid.

According to a Reuters report, Cisco senior vice president for worldwide operations Gary Daichendt said that Cisco has seen no immediate impact from the recent turmoil in Southeast Asian currencies, but the company is closely monitoring the situation. Daichendt spoke at a Cisco-sponsored conference in Malaysia.

(By the way, this is the same reply I received from Cisco's home office in San Jose after I e-mailed them a question on this topic a few days ago.)

According to Reuters, Daichendt also said that Cisco saw its markets in China, Taiwan and Hong Kong expand by over 100% last year, and growth in southeast Asian markets last year was "way over 50%." Even so, the total value of that market remains relatively small, because, as Daichendt reportedly said, "There is less than a 1% penetration of the population in most Asian countries ... that have access to the Internet."

GREEN TREE FINANCIAL (NYSE: GNT) gained $1 5/8 on good trading volume to establish a new high of $48 1/16.

Green Tree huggers may find it of interest that the American Bankers Association issued a report yesterday on consumer loan delinquency rates for the second quarter of 1997. According to that report, overdue credit card accounts rose to a seasonally adjusted 3.69%, as compared with 3.51% in the first quarter. The record high, 3.72%, was set in the fourth quarter of last year.

Based on total dollars outstanding rather than the number of accounts, however, delinquencies dropped to 5.24% from 5.43% in the preceding quarter. Also, late payments for home equity loans -- that is, the business that has expanded most rapidly for Green Tree this year, decreased to 1.01% from 1.20%. In contrast, auto loan delinquencies rose sharply, which has caused problems for companies such as THE MONEY STORE (Nasdaq: MONE) recently. Green Tree does no auto financing, however.

I learned today that a report on Green Tree was issued recently by ABN-AMRO-Chigago Corp. (Get used to those mouth-filling company names, as merger mania shows no sign of letting up in the financial world.)

According to ABN-whatever, Green Tree it is preparing to branch out into Canada, thereby adding about 10% to its current customer base. Go Green Tree, eh?

The report gushes with praise for the St. Paul-based lender, calling Green Tree "one of the premier specialty finance companies in the world. It appears to be strategically positioned better than at any time in its history through several high growth products and markets."

Moving on, ORACLE (Nasdaq: ORCL) rose $1/2 as PaineWebber reiterated its "buy" on the stock. PaineWebber thus echoes Merrill Lynch's reiteration, issued yesterday amidst a flurry of analyst downgrades.

Finally, OXFORD HEALTH PLANS (Nasdaq: OXHP) picked up $1/8. The only thing I spotted on Oxford is that CEO Steve Wiggins is a member of the committee sponsoring a benefit 5K run in Central Park this weekend.

The "5k Fight Against Prostate Cancer" will start at 9:30 a.m. Sunday, Sept. 21, at 67th Street and West Park Drive in Central Park. Runners can register for the race until 9:15 a.m. on race day or through the New York Road Runners Club, which is producing the race, at the Club's Website. All entry fees will be donated to the Prostate Cancer Initiative.

If the weather in New York is even half as gorgeous as it is here in Michigan, this could be a great way for folks to enjoy Sunday morning outdoors and support a worthy cause.

Drip Portfolio -- Message boards.
The Fool Portfolio -- Fool Port getting closer.
Fool Message Boards -- Speak your mind!
Evening News -- All the news, early.
Daily Double
-- Doubled. Why? Learn.
Daily Trouble -- Slammed. A value?
Fool Four -- 23% annualized historically

Stock  Change    Bid
ATLS  -  1/16  27.44
BGP   +  9/16  26.94
CSL   +  1/4   45.69
CSCO  -  1/4   74.25
GNT   -  1/2   46.44
ORCL  -3 3/8   36.13
OXHP  -1 1/8   76.75
PMSI  -  1/16  14.38
TDW   +  3/16  58.50
                   Day   Month    Year  History
        BORING   -0.66%   4.80%  27.44%  46.65%
        S&P:     -0.28%   4.84%  27.31%  51.70%
        NASDAQ:  -0.13%   4.99%  29.08%  60.09%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     26.94   139.31%
  8/13/96  200 Carlisle C    26.32     45.69    73.55%
  5/24/96  100 Oxford Hea    48.02     76.75    59.81%
   2/2/96  200 Green Tree    30.39     46.44    52.82%
   3/8/96  400 Prime Medi    10.07     14.38    42.77%
  6/26/96  100 Cisco Syst    53.90     74.25    37.76%
 12/23/96  100 Tidewater     46.52     58.50    25.74%
   3/5/97  150 Atlas Air     23.06     27.44    18.99%
 11/21/96  150 Oracle Cor    32.43     36.13    11.38%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10775.00  $6272.51
  8/13/96  200 Carlisle C  5264.99   9137.50  $3872.51
   2/2/96  200 Green Tree  6077.49   9287.50  $3210.01
  5/24/96  100 Oxford Hea  4802.49   7675.00  $2872.51
  6/26/96  100 Cisco Syst  5389.99   7425.00  $2035.01
   3/8/96  400 Prime Medi  4027.49   5750.00  $1722.51
 12/23/96  100 Tidewater   4652.49   5850.00  $1197.51
   3/5/97  150 Atlas Air   3458.74   4115.63   $656.89
 11/21/96  150 Oracle Cor  4864.99   5418.75   $553.76

                             CASH   $7890.00
                            TOTAL  $73324.38