Boring Portfolio

Boring Portfolio Report
Thursday, October 2, 1997
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (Oct. 2, 1997) -- The Dow and Nasdaq each rose 12 points Wednesday. For the Dow, that translates into a 0.15% gain. For the Nasdaq, it's a 0.71% increase ... and another record high. The S&P 500 split the difference, gaining 0.53%.

The Boring Portfolio topped all three benchmarks, snapping a three-day losing streak. Winning holdings edged losers four to three, with ATLAS AIR (Nasdaq: ATLS) and ORACLE (Nasdaq: ORCL) unchanged.

OXFORD HEALTH PLANS (Nasdaq: OXHP) continued its recent slide, losing $3/4 on the bid. Trading volume approached 6 million shares -- what the Ox usually sees in a week.

Once again, the likely source of the selloff was problems at another HMO, not Oxford. The implosion du jour was CIGNA (NYSE: CI), which tumbled $8 3/4 after the company warned it would not meet analysts' expectations for the current quarter.

As with AETNA (NYSE: AET), which dropped its own bomb on Monday, Cigna is being challenged by integrating a recent acquisition (Healthsource) and higher-than-expected medical expenses. Oxford, to re-re-reiterate, has neither of those problems.

As any prudent shareholder should when one has questions about one's investment, I called Oxford's Investor Relations office for some answers. And as any prudent investor should, I took a few moments ahead of time to read over recent news and frame some specific questions rather than simply ring up and blurt "Hey, how come da stock's down??"

In particular, I wanted to know whether there had been any change from Oxford's guidance, as provided in the August conference call, regarding: (a) approximately a 2% increase in the rate Oxford will receive from the government for covering Medicare recipients next year; (b) declining medical loss ratios for the balance of 1997; and (c) continued progress in approaching 100% payment of "clean" claims within 30 days of receipt.

Answer: No change whatsoever. None.

Perhaps someone else asked the same questions and got the same answers: the stock bounced off a morning low of $67 7/8 to close at $71 1/4.

Oxford isn't slated to report results for the September quarter until early next month. Until then, we may just have to roll with the punches -- something that long-term Oxford shareholders have become accustomed to over the years, but not without ample reward for their perseverance.

Shares of BORDERS GROUP (NYSE: BGP) erased Wednesday's dollar loss in heavy trading of more than 700,000 shares. Yesterday, Merrill Lynch issued a report on rival BARNES & NOBLE (NYSE: BKS), naming B&N its "Focus 1" stock of the week. Today, the analyst at PaineWebber dropped B&N from "attractive" to "neutral." Whatever.

Finally tonight, CISCO SYSTEMS (Nasdaq: CSCO) popped $3 3/16 on no particular news that I could locate. I did, however, spot a summary of a study just completed by Vertical Systems Group, of Dedham, Mass., that forecasts trends in the Asynchronous Transfer Mode (ATM) and Frame Relay markets worldwide. Cisco is, of course, a major player in both of those markets.

According to the study, ATM services and equipment will grow at a compound annual growth rate of 57% between 1996 and 2000, to reach $7.3 billion. Frame relay services and equipment will increase to $14.6 billion in this time period, representing a compound annual growth rate of 43%.

Not too shabby.

Drip Portfolio -- More Health Care.
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


TODAY'S NUMBERS
Stock  Change    Bid
ATLS  --       27.88
BGP   +1 1/16  27.81
CSL   -  9/16  44.75
CSCO  +3 3/16  75.94
GNT   +  3/4   47.69
ORCL    ---    36.00
OXHP  -  3/4   71.00
PMSI  -  1/8   13.38
TDW   +  3/4   59.88
                   Day   Month    Year  History
        BORING   +1.18%   0.18%  27.29%  46.48%
        S&P:     +0.53%   1.39%  29.66%  54.51%
        NASDAQ:  +0.72%   0.99%  31.86%  63.54%

     Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     27.75   146.53%
  8/13/96  200 Carlisle C    26.32     44.75    69.99%
   2/2/96  200 Green Tree    30.39     47.69    56.93%
  5/24/96  100 Oxford Hea    48.02     71.00    47.84%
  6/26/96  100 Cisco Syst    53.90     75.94    40.89%
   3/8/96  400 Prime Medi    10.07     13.38    32.84%
 12/23/96  100 Tidewater     46.52     59.88    28.69%
   3/5/97  150 Atlas Air     23.06     27.88    20.93%
 11/21/96  150 Oracle Cor    32.43     36.00    11.00%

     Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  11100.00  $6597.51
  8/13/96  200 Carlisle C  5264.99   8950.00  $3685.01
   2/2/96  200 Green Tree  6077.49   9537.50  $3460.01
  5/24/96  100 Oxford Hea  4802.49   7100.00  $2297.51
  6/26/96  100 Cisco Syst  5389.99   7593.75  $2203.76
 12/23/96  100 Tidewater   4652.49   5987.50  $1335.01
   3/8/96  400 Prime Medi  4027.49   5350.00  $1322.51
   3/5/97  150 Atlas Air   3458.74   4331.25   $872.51
 11/21/96  150 Oracle Cor  4864.99   5400.00   $535.01

                             CASH   $7890.00
                            TOTAL  $73240.00