Boring Portfolio Report
Friday, September 19, 1997
by Greg Markus (TMFBoring)
ANN ARBOR, Mich. (Sept. 19, 1997) - Stocks closed mixed on a triple-witching Friday, with the Dow off 5 (-0.07%) but the S&P 500 up 3 (+0.34%) and the Nasdaq up a solid 10 points, or 0.62%, extending its push into record territory.
The Boring Portfolio established a new high of its own on Thursday -- its seventh of the month -- but just missed setting another record on Friday by losing a grand total of $3.12 (-0.00%). For the week, the Borefolio advanced 1.76%, a bit behind the Nasdaq's 1.88% gain and well back from the resurgent S&P 500, which rose 2.88%.
The volume of relevant news Friday matched the Borefolio's action, which is to say there wasn't any. The week contained a number of noteworthy events, however, which I'll sum up briefly for you.
The biggest news of the week was ORACLE's (Nasdaq: ORCL) report on Tuesday of results for its August quarter. Earnings of $0.15 per share, excluding charges associated with recent acquisitions, were in line with the consensus estimate of analysts as reported by First Call and represented a 36% gain over last year's $0.11 per share. Revenues increased 30% to $1.37 billion -- also more or less in line with prevailing expectations.
The gains would have been even larger had it not been for the loss of six percentage points of revenue growth due to conversion of international sales from local currencies into the greenback. The negative impact of the strong dollar on international sales is a theme that has been showing up in news from an increasing number of U.S.-based multinationals, and it's one worth paying attention to.
More problematic for Oracle, however, was a paltry 6% year-over-year gain in sales of the company's core database software. A blazing 96% growth in sales of Oracle applications with which to manipulate databases and a 42% increase in support, consulting, and education fees offset the slow database sales. Nevertheless, a clutch of analysts proceeded to downgrade the stock, and ORCL sold off sharply on Wednesday.
The spasm of selling quickly subsided, however, and ORCL gained ground Thursday and Friday (rising $13/16 on Friday). Analysts at Merrill Lynch and PaineWebber, among others, pointed out that Oracle's rollout of a host of new software products, along with increasing interest in the whole Network Computer phenomenon, augur well for the balance of the year.
Next week marks the occasion of Oracle's OpenWorld '97 (OOW) at the Los Angeles Convention Center. The Motley Fool will monitor the conference for breaking news; but you might want to check in at www.oracle.com from time to time, as well, to see what surprises Larry Ellison and the Oracletians (Oracloids?) might have in store.
Speaking of corporate CEOs, ATLAS AIR (Nasdaq: ATLS) announced Wednesday evening that founder and chairman Michael Chowdry would reassume the position of president, following Mickey Foret's departure from that post. ATLS descended a bit following the news but finished the week lower by only $3/8 from where it began.
BORDERS GROUP (NYSE: BGP) announced Thursday that its board agreed to double the company's share repurchase program to $100 million. BGP closed up fractionally on Friday. For the week, the stock rose $7/8 to an all-time closing high of $27 9/16.
Nurtured by falling interest rates, GREEN TREE FINANCIAL (NYSE: GNT) established a record high of its own on Thursday but had $1/16 trimmed off Friday to close at $48. For the week, the Tree grew 8.6%.
Finally, CISCO SYSTEMS (Nasdaq: CSCO) announced it would partner with three other companies to develop and produce cable modems to enable Desktop PC users to receive data, video, and voice -- not to mention reruns of "I Dream of Jeannie" -- over their television cable. CSCO slipped $7/8 Friday to end the week at a bid of $73 3/16.
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Stock Change Bid ATLS - 1/4 26.38 BGP + 1/8 27.63 CSL + 1/2 46.06 CSCO - 7/8 73.19 GNT - 1/8 47.94 ORCL + 13/16 37.44 OXHP - 7/16 76.44 PMSI - 1/16 14.31 TDW - 9/16 58.25
Day Month Year History BORING -0.00% 5.51% 28.31% 47.65% S&P: +0.34% 5.67% 28.32% 52.91% NASDAQ: +0.62% 5.86% 30.16% 61.43% Rec'd # Security In At Now Change 2/28/96 400 Borders Gr 11.26 27.63 145.42% 8/13/96 200 Carlisle C 26.32 46.06 74.98% 5/24/96 100 Oxford Hea 48.02 76.44 59.16% 2/2/96 200 Green Tree 30.39 47.94 57.75% 3/8/96 400 Prime Medi 10.07 14.31 42.15% 6/26/96 100 Cisco Syst 53.90 73.19 35.78% 12/23/96 100 Tidewater 46.52 58.25 25.20% 11/21/96 150 Oracle Cor 32.43 37.44 15.43% 3/5/97 150 Atlas Air 23.06 26.38 14.38% Rec'd # Security In At Value Change 2/28/96 400 Borders Gr 4502.49 11050.00 $6547.51 8/13/96 200 Carlisle C 5264.99 9212.50 $3947.51 2/2/96 200 Green Tree 6077.49 9587.50 $3510.01 5/24/96 100 Oxford Hea 4802.49 7643.75 $2841.26 6/26/96 100 Cisco Syst 5389.99 7318.75 $1928.76 3/8/96 400 Prime Medi 4027.49 5725.00 $1697.51 12/23/96 100 Tidewater 4652.49 5825.00 $1172.51 11/21/96 150 Oracle Cor 4864.99 5615.63 $750.64 3/5/97 150 Atlas Air 3458.74 3956.25 $497.51 CASH $7890.00 TOTAL $73824.38