Boring Portfolio

Boring Portfolio Report
Monday, October 20, 1997
by Greg Markus (

ANN ARBOR, Mich. (Oct. 20, 1997) -- Ah, that's better. On Friday, stocks rebounded after falling sharply through most of the day. Monday's trading saw a continuation of that recovery, with the major benchmark indices closing essentially at their daily highs. The S&P 500 rose 1.21% while the Nasdaq gained 1.12%.

The Boring Portfolio, which fell more sharply than the overall market Friday, also recovered somewhat more dramatically today. Its total value rose 1.34%, and only a $5/16 retreat by BORDERS GROUP (NYSE: BGP) prevented the Borefolio from going nine for nine.

Shares of OXFORD HEALTH PLANS (Nasdaq: OXHP) contributed to the health of the Borefolio by rising $2 3/16. A story that appeared on the front page of Sunday's New York Times and other papers across the country may account for the stock's surge.

According to that story, industry analysts now forecast that health insurance premiums will rise by at least five percent in current round of contract negotiations between providers and their major clients, including the federal government. The story pointed out that after holding rates down in recent years in an effort to gain market share, HMOs and other insurers will be hiking prices to recover lost profits. In some areas of the country and for some customers rates could increase as much as 20 or 30 percent, although the average hike would be far less than that.

HMO and hospital stocks have been among the poorest performers in the entire market over the past few years ... with the dramatic exception of Oxford. Not only has OXHP far outrun other healthcare stocks, it has been among the most rapidly appreciating stocks of any kind.

As noted here many times here, no small part of the explanation for Oxford's outstanding stock performance has been the company's excellence in serving its customers. And because of its reputation for quality care, Oxford has been able to increase its membership at a rapid clip without resorting to low-ball rates. Now that competitors are being forced to raise rates, Oxford's quality advantage is likely to make it an even more formidable competitor than before.

In what one analyst described as a "compelling" presentation, Oxford's CEO for the New York region, Richard Smoler, explained all this to analysts and investors gathered in Boston last week. Smoler reportedly laid out Oxford's strategy for expanding its presence in the Chicago and Florida markets and ramping up its Specialty Medical units. The latter are groups of medical specialists who contract with Oxford to treat patients with certain high-volume medical disorders at a flat fee and with substantial freedom from second-guessing by HMO gatekeepers.

Oil-patch stocks were among the market leaders today. The Borefolio's entrant, TIDEWATER (NYSE: TDW) sailed to a $3 3/8 advance ahead of the company's quarterly earnings report tomorrow morning. According to First Call, the consensus expectation of analysts is for EPS of $0.90, with the range extending plus or minus a nickel either way. Should Tidewater come in as expected, that would constitute a solid 70% advance over the year-ago figure of $0.53. We'll be covering the follow-up conference call for you.

Finally, Borefolio tech gorillas CISCO SYSTEMS (Nasdaq: CSCO) and ORACLE (Nasdaq: ORCL) gained $1 3/8 and $1/4, respectively. Cisco announced a new addition to its family of small-office routers, but other than that I saw nothing of significance in the news. By the way, I booked my flight today to travel to San Jose for Cisco's annual shareholder meeting, to be held Nov. 13. Maybe I can test drive one of those new Cisco GSR 12000s?

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Stock  Change    Bid
ATLS  +  15/16 26.44
BGP   -  5/16  25.38
CSL   +  1/8   44.88
CSCO  +1 3/8   81.38
GNT   +  1/2   48.56
ORCL  +  1/4   34.44
OXHP  +2 3/16  72.63
PMSI  +  1/4   13.75
TDW   +3 3/8   65.38
                   Day   Month    Year  History
        BORING   +1.34%   0.44%  27.63%  46.87%
        S&P:     +1.21%   0.88%  29.00%  53.73%
        NASDAQ:  +1.12%  -0.01%  30.55%  61.91%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     25.38   125.43%
  8/13/96  200 Carlisle C    26.32     44.88    70.47%
   2/2/96  200 Green Tree    30.39     48.56    59.81%
  5/24/96  100 Oxford Hea    48.02     72.63    51.22%
  6/26/96  100 Cisco Syst    53.90     81.38    50.97%
 12/23/96  100 Tidewater     46.52     65.38    40.52%
   3/8/96  400 Prime Medi    10.07     13.75    36.56%
   3/5/97  150 Atlas Air     23.06     26.44    14.66%
 11/21/96  150 Oracle Cor    32.43     34.44     6.18%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10150.00  $5647.51
  8/13/96  200 Carlisle C  5264.99   8975.00  $3710.01
   2/2/96  200 Green Tree  6077.49   9712.50  $3635.01
  6/26/96  100 Cisco Syst  5389.99   8137.50  $2747.51
  5/24/96  100 Oxford Hea  4802.49   7262.50  $2460.01
 12/23/96  100 Tidewater   4652.49   6537.50  $1885.01
   3/8/96  400 Prime Medi  4027.49   5500.00  $1472.51
   3/5/97  150 Atlas Air   3458.74   3965.63   $506.89
 11/21/96  150 Oracle Cor  4864.99   5165.63   $300.64

                             CASH   $8028.59
                            TOTAL  $73434.84