Boring
Portfolio Report
Tuesday, November 25, 1997
by Greg Markus (TMF
[email protected])
ANN ARBOR, Mich. (Nov. 25, 1997) -- Benchmarks for U.S. stocks rose Tuesday despite continuing turmoil in international markets. The S&P 500 gained 0.44% while the Nasdaq rose a more modest 0.13%.
The Boring Portfolio, alas, continues to suffer. It fell 0.28% today. After outpacing the S&P 500 for much of the year, the Borefolio has given back more than half of its 1997 gains in the past couple of months as first Oxford Health Plans (Nasdaq: OXHP) and then Green Tree Financial (NYSE: GNT) blindsided investors with announcements of one-time (we hope) charges that raise questions about the quality of the companies' accounting and earnings.
In the case of Oxford (which we unloaded), the questions are entirely appropriate. The company indisputable lost control of its revenues and costs. In Green Tree's case, which we've laid out in previous Boring recaps, the argument is less cut and dried. In both instances, though, the market's judgment is unambiguous: shoot first, ask questions later.
After making what looked like a tentative recovery this morning, Green Tree toppled back in heavy trading, dropping $7/16 to close at $30 7/8. According to First Call's fresh survey of analysts, consensus earnings estimates for 1998 remain at $3.64 per share for Green Tree, which means the stock is trading at 8.5 times next year's earnings -- about half the company's projected annual earnings growth rate over the next three to five years. On top of that, Green Tree pays a modest dividend.
This morning, Green Tree announced that its retail services division has reached an agreement with Agricredit Acceptance LLC to provide a retail revolving credit program through AGCO's independent farm equipment dealers and distributors in the U.S. and Canada. Agricredit Acceptance is the North American financing joint venture between farm equipment manufacturer AGCO Corp. (NYSE: AG) and Rabobank Nederland. The new program will offer farm equipment users a financing source for replacement parts and services. According to a press release, the program is currently being introduced to AGCO dealers and is expected to be formally launched in early February, 1998.
Headquartered in Duluth, Georgia, AGCO is a global manufacturer and distributor of agricultural equipment and replacement parts distributed under such brand names as AGCO Allis, Massey Ferguson, White, and Gleaner. Last year, AGCO had sales of $2.3 billion.
Tidewater (NYSE: TDW) also continued to sink along with most energy stocks ahead of tomorrow's (well, today's... almost) opening of OPEC meetings in Jakarta. Tidewater sank $9/16 with 1.7 million shares trading hands -- almost triple a typical day's activity for the stock.
The losing side was joined by Borders Group (NYSE: BGP) today -- a fairly unusual occurrence for this Borefolio leader. Borders fell $1 7/16 in above-average trading. I searched but could locate no news that might account for the drop.
On the upside, Cisco Systems (Nasdaq: CSCO) and Oracle (Nasdaq: CSCO) reversed yesterday's losses. Cisco picked up a buck on the bid, while Oracle rose $7/8. CNBC reported this morning that the software analyst at Merrill Lynch was "pounding the table" for Oracle following yesterday's cautionary update from his counterpart at Morgan Stanley.
Carlisle Companies (NYSE: CSL) recovered $1 1/2 of the $2 11/16 loss it experienced Monday, and FelCor Suite Hotels (NYSE: FCH), about which we've had little to say since picking up 200 shares earlier this month, edged up $1/16.
Have You Given? The Fool Charity Fund
Stock Change Bid CGO - 1/16 26.38 BGP -1 7/16 28.63 CSL +1 1/2 41.81 CSCO +1 84.25 FCH + 1/16 36.75 GNT - 7/16 30.88 ORCL + 7/8 33.38 PMSI --- 13.13 TDW - 9/16 56.69 |
Day Month Year History
BORING -0.28% -4.29% 12.39% 29.33%
S&P: +0.44% 3.96% 28.36% 52.96%
NASDAQ: +0.13% -0.29% 23.08% 52.65%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 28.63 154.30%
8/13/96 200 Carlisle C 26.32 41.81 58.83%
6/26/96 100 Cisco Syst 53.90 84.25 56.31%
3/8/96 400 Prime Medi 10.07 13.13 30.35%
12/23/96 100 Tidewater 46.52 56.69 21.84%
3/5/97 150 Atlas Air 23.06 26.38 14.38%
11/21/96 150 Oracle Cor 32.43 33.38 2.90%
2/2/96 200 Green Tree 30.39 30.88 1.60%
11/6/97 200 FelCor Sui 37.59 36.75 -2.23%
Rec'd # Security In At Value Change
2/28/96 400 Borders Gr 4502.49 11450.00 $6947.51
8/13/96 200 Carlisle C 5264.99 8362.50 $3097.51
6/26/96 100 Cisco Syst 5389.99 8425.00 $3035.01
3/8/96 400 Prime Medi 4027.49 5250.00 $1222.51
12/23/96 100 Tidewater 4652.49 5668.75 $1016.26
3/5/97 150 Atlas Air 3458.74 3956.25 $497.51
11/21/96 150 Oracle Cor 4864.99 5006.25 $141.26
2/2/96 200 Green Tree 6077.49 6175.00 $97.51
11/6/97 200 FelCor Sui 7518.00 7350.00 -$168.00
CASH $3021.10
TOTAL $64664.85
