Boring Portfolio

Boring Portfolio Report
Monday, December 1, 1997
by Greg Markus (TMF Boring@aol.com)


ANN ARBOR, Mich. (Dec. 1, 1997) -- Solid gains by Boring Portfolio holdings at the top of the alphabetical order managed to offset losses lower down the list, thus providing a 0.26% overall gain for this first day of December. That paled in comparison to the daily advances posted by the S&P 500 and Nasdaq, however. They rose 2.03% and 1.88%, respectively.

Oracle (Nasdaq: ORCL) fell $1 7/16 following a downgrade by analyst Rick Sherlund of Goldman Sachs. Goldman removed Oracle from its "recommended list," and Sherlund lowered his rating on the stock to a "market outperform."

One week ago, analyst Charles Phillips at Morgan Stanley trimmed his revenues and earnings forecasts for Oracle by about 1%. Goldman's Sherlund apparently left his earnings estimate intact at $1.20 per share for calendar year 1998, however.

According to news reports, Sherlund wrote that he is "increasingly of the view that the company seems to be just able to meet Street estimates" rather than provide the kind of consistent upside surprises analysts have come to demand. He therefore questions whether the stock "can offer substantial upside for investors in light of what is likely to become a growing controversy."

Published reports did not explain what exactly the "growing controversy" is. Sherlund pointed, however, to Oracle's anemic 6% year-over-year increase in revenues for its core server products in the company's first fiscal quarter ending August 31.

As noted in The Motley Fool's summary of Oracle's most recent quarterly conference call, Oracle management attributed the single-digit revenue growth for server products to a tough comparison with 1996's strong numbers, as well as the strong dollar and sluggish international economies. They expressed confidence that sales growth would improve over the balance of the fiscal year.

As I've noted in recent recaps, I'm also concerned about Oracle's prospects for the coming year. The company reports quarterly results in about two weeks, and my inclination is to wait until then to see where things stand.

Tidewater (NYSE: TDW) continued to drift out to sea along with other energy-related stocks in the wake of OPEC's decision to increase production quotas modestly. TDW sank $2 5/16 in heavy trading today as the price of benchmark West Texas Intermediate crude fell $0.43 to $18.66.

One (which is to say, I) may question whether drilling and oil services stocks merit such a drubbing given that OPEC's new quotas merely reflect current practices, as many OPEC members routinely exceeded their old allotments. Moreover, crude prices would probably have to fall to the $16-$17 range before exploration and drilling activity would be noticeably affected.

Turning from the ridiculous to the sublime, Cisco Systems (Nasdaq: CSCO) soared $4 3/16 on trading volume in excess of 10 million shares to set an all-time closing high of $90 3/8 (bid). Networking stocks were strong pretty much across the board following the appearance of an upbeat story on Foolfolio holding 3Com (Nasdaq: COMS) in Barron's over the weekend.

In honor of the Kid's achievement, we offer you a summary of my recent conversation with Cisco's director of investor relations, Mary Thurber.

Now if only Oracle's stock could take a lesson from Cisco's ....


TODAY'S NUMBERS
Stock  Change    Bid
CGO   +  3/8   26.75
BGP   +  3/8   28.94
CSL   +  5/8   43.13
CSCO  +4 3/16  90.38
FCH   -  1/16  36.25
GNT   -  5/8   30.00
ORCL  -1 7/16  31.81
PMSI    ---    13.25
TDW   -2 5/16  53.75

                   Day   Month    Year  History
        BORING   +0.26%   0.26%  12.92%  29.94%
        S&P:     +2.03%   2.03%  31.59%  56.81%
        NASDAQ:  +1.88%   1.88%  26.31%  56.66%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     28.94   157.08%
  6/26/96  100 Cisco Syst    53.90     90.38    67.67%
  8/13/96  200 Carlisle C    26.32     43.13    63.82%
   3/8/96  400 Prime Medi    10.07     13.25    31.60%
   3/5/97  150 Atlas Air     23.06     26.75    16.01%
 12/23/96  100 Tidewater     46.52     53.75    15.53%
   2/2/96  200 Green Tree    30.39     30.00    -1.28%
 11/21/96  150 Oracle Cor    32.43     31.81    -1.91%
  11/6/97  200 FelCor Sui    37.59     36.25    -3.56%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  11575.00  $7072.51
  6/26/96  100 Cisco Syst  5389.99   9037.50  $3647.51
  8/13/96  200 Carlisle C  5264.99   8625.00  $3360.01
   3/8/96  400 Prime Medi  4027.49   5300.00  $1272.51
 12/23/96  100 Tidewater   4652.49   5375.00   $722.51
   3/5/97  150 Atlas Air   3458.74   4012.50   $553.76
   2/2/96  200 Green Tree  6077.49   6000.00   -$77.49
 11/21/96  150 Oracle Cor  4864.99   4771.88   -$93.11
  11/6/97  200 FelCor Sui  7518.00   7250.00  -$268.00

                             CASH   $3021.10
                            TOTAL  $64967.98



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