Boring Portfolio

Boring Portfolio Report
Friday, October 31, 1997
by Greg Markus (

ANN ARBOR, Mich. (Oct. 31, 1997) -- A week that began with a nasty trick played upon the Boring Portfolio ended with a treat Friday, in the form of a 1.66% increase in the portfolio's value.

Seven of nine stocks rose in choppy trading, while only one -- GREEN TREE FINANCIAL (NYSE: GNT) declined, by a dollar. The Borefolio's daily gain outpaced 1.48% and 1.21% rises in the Nasdaq and S&P 500, respectively.

The trick, of course, was the flaming bag of #$%! left on the doorstep by OXFORD HEALTH PLANS (Nasdaq: OXHP) early Monday morning. In a press release, the company disclosed that they had been more or less flying blind for perhaps the entire year, lacking reliable information on billings, claims, and member count. In the modern day version of "the dog ate my homework," Oxford blamed its problems on their computers and software, rather than on the company executives who repeatedly assured analysts and shareholders that everything was under control.

As Oxford finally began to catch up in reconciling records from as far back as September 1996, they discovered that they'd seriously underestimated the bad stuff and overestimated the good stuff, the likely consequence of which would be drastically reduced earnings through at least the balance of this year and 1998.

The stock plummeted, losing nearly two-thirds of its value. In the past few days Oxford has attracted shareholder lawsuits faster than a 12 year-old collects Milky Ways on Halloween night. I tallied six suits at last count, but I haven't checked in the past couple of hours, so my count could be off.

Suffice it to say, we decided on Tuesday to liquidate what is left of our investment in Oxford and have until the close of business this coming Tuesday to sell our 100 shares. By the way, Oxford will report its quarterly results, such as they are, on Tuesday morning.

Things were far happier elsewhere in the Borefolio. ATLAS AIR (Nasdaq: ATLS) and PRIME MEDICAL SERVICES (Nasdaq: PMSI) both came through with very nice quarterly earnings reports during the week. On Tuesday, Prime announced it had met the Street's consensus expectation of $0.23 per share in earnings, that despite a higher than projected tax bite. The following day, Atlas came in at $0.28 per share, beating the consensus by four cents and exceeding the top-end forecast by a penny. ATLS closed up $1 1/4 on Friday in heavy trading.

Summaries of Prime's and Atlas's follow-up conference calls are available in the aptly named section of The Motley Fool.

Although the Nasdaq fell 3.47% in the week just ended, the Borefolio's two technology gorillas, CISCO SYSTEMS (Nasdaq: CSCO) and ORACLE (Nasdaq: ORCL) saw their stocks rise. Cisco gained $1 13/16 on the week, closing at a bid of $82. Oracle picked up a like amount, closing at $35 3/4. The Kid reports its quarterly results this coming Tuesday, after the close of trading. We'll be on the conference call.

Finally, shares of BORDERS GROUP (NYSE: BGP) rose $7/8 Friday in heavy trading. In an interview with Reuters, company CEO Robert DiRomualdo said that he saw no reason why the Ann Arbor, Mich.-based bookseller might not eventually have 500 superstores in the U.S. and an equal number internationally. Borders currently has 203 superstores in the States.

DiRomualdo spoke from Singapore, where Borders is opening its first store outside of the U.S. A second overseas superstore is slated to open next year in Leeds, England.

The Borders CEO added that the company's plan is to maintain "a minimum 25% EPS growth rate ad infinitum"... which is even longer than those crummy apples remain uneaten at the bottom of a Trick or Treat bag.

Speaking of which, the doorbell's ringing. Gotta run.

Stock  Change    Bid
ATLS  +1 1/4   27.63
BGP   +  7/8   25.94
CSL   +  5/16  43.25
CSCO  +2 1/16  82.00
GNT   -1       42.25
ORCL  +2       35.75
OXHP    ---    25.81
PMSI  +  1/4   13.00
TDW   +1       65.69
                   Day   Month    Year  History
         BORING   +1.66%  -7.59%  17.42%  35.12%
        S&P:     +1.21%  -3.45%  23.47%  47.13%
        NASDAQ:  +1.48%  -5.46%  23.44%  53.09%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     25.94   130.43%
  8/13/96  200 Carlisle C    26.32     43.25    64.29%
  6/26/96  100 Cisco Syst    53.90     82.00    52.13%
 12/23/96  100 Tidewater     46.52     65.69    41.19%
   2/2/96  200 Green Tree    30.39     42.25    39.04%
   3/8/96  400 Prime Medi    10.07     13.00    29.11%
   3/5/97  150 Atlas Air     23.06     27.63    19.81%
 11/21/96  150 Oracle Cor    32.43     35.75    10.23%
  5/24/96  100 Oxford Hea    48.02     25.81   -46.25%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10375.00  $5872.51
  8/13/96  200 Carlisle C  5264.99   8650.00  $3385.01
  6/26/96  100 Cisco Syst  5389.99   8200.00  $2810.01
   2/2/96  200 Green Tree  6077.49   8450.00  $2372.51
 12/23/96  100 Tidewater   4652.49   6568.75  $1916.26
   3/8/96  400 Prime Medi  4027.49   5200.00  $1172.51
   3/5/97  150 Atlas Air   3458.74   4143.75   $685.01
 11/21/96  150 Oracle Cor  4864.99   5362.50   $497.51
  5/24/96  100 Oxford Hea  4802.49   2581.25 -$2221.24

                             CASH   $8028.59
                            TOTAL  $67559.84