Boring Portfolio

Boring Portfolio Report
Wednesday, January 14, 1998
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (Jan. 14, 1998) -- I've heard it said that if the stock market closes higher on Monday, that's an "indication." If it moves up on Tuesday as well, its a "trend." And if it also gains ground on Wednesday, that's a "tradition."

Who am I to disagree? After all, in a wire service report this evening a Wall Street gooroo insists that today's market gains demonstrate that the worst of the Asian financial situation is already priced into stocks, and we should rally from here.

Boy, am I relieved to learn that this little bout of Asian flu is finally behind us. Aren't you?

At any rate, benchmark stock averages rose today, as the quarterly rush of earning reports pours in. The S&P 500 gained 0.61%, while the Nasdaq rose 0.44% despite daily losses for Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT). The Boring Portfolio topped that, gaining 1.52%. Borefolio winners outnumbered losers five to three.

Borders Group (NYSE: BGP) rose $1 3/16 after ABN Amro initiated coverage with a "buy." The brokerage set a 12-month price target of $40, saying they expect "expansion and maturation of Borders superstores to drive annual earnings per share growth of at least 25% over the next few years."

ABN AMRO'S earnings estimates for Borders are $0.97 a share for the fiscal year ending in two weeks, $1.22 a share for fiscal 1998, and $1.52 for fiscal '99. Those numbers are basically in line with the Street's consensus, as well as previously announced guidance from Borders management.

Oil service stocks continued to recover, including our own Tidewater (NYSE: TDW), which surged $2 3/16. No specific news on Tidewater.

On the downside, Prime Medical Services (Nasdaq: PMSI) slipped $3/4 in heavy trading. As mentioned in yesterday's Borefolio recap, we have been concerned about the possible impact proposed Health Care Finance Administration regulations might have upon Prime's business. The proposed regs would severely limit physicians' participation in the kind of partnerships that have been Prime's bread and butter to date.

My colleague Mark Weaver, MD, discussed the matter with Prime Medical's management. The company laid out for us a scenario whereby they might acquire physicians' interests in the lithotripsy partnerships, continue to develop the new Prostatron thermotherapy business (albeit somewhat more slowly), and continue to thrive.

It's entirely possible, and we wish Prime Medical the very best of luck.

For our part, however, we've concluded that the healthcare services industry is an awfully tough place to make a buck these days. Leaning toward caution, we've decided reluctantly to sell our interest in Prime Medical, one of the Borefolio's earliest investments. Our brief sell report elaborates our line of reasoning.

FoolWatch -- It's what's going on at the Fool today.

Buy a Book and Get It Signed! -- Book Tour '98


TODAY'S NUMBERS
Stock  Change    Bid 
 CGO   -  5/16  23.56 
 BGP   +1 3/16  30.44 
 CSL   +1 5/8   43.88 
 CSCO  +1       56.94 
 FCH   +  9/16  36.44 
 GNT   -  1/8   24.69 
 PMSI  -  3/4   11.25 
 TDW   +2 3/16  45.13 
 
                   Day   Month    Year  History 
         BORING   +1.52%  -3.54%  -3.54%  21.38% 
         S&P:     +0.61%  -1.29%  -1.29%  54.10% 
         NASDAQ:  +0.44%  -1.41%  -1.41%  48.73% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     30.44   170.41% 
   8/13/96  200 Carlisle C    26.32     43.88    66.67% 
   6/26/96  150 Cisco Syst    35.93     56.94    58.45% 
    3/8/96  400 Prime Medi    10.07     11.25    11.73% 
    3/5/97  150 Atlas Air     23.06     23.56     2.19% 
  12/23/96  100 Tidewater     46.52     45.13    -3.01% 
   11/6/97  200 FelCor Sui    37.59     36.44    -3.07% 
    2/2/96  200 Green Tree    30.39     24.69   -18.76% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  12175.00  $7672.51 
   8/13/96  200 Carlisle C  5264.99   8775.00  $3510.01 
   6/26/96  150 Cisco Syst  5389.99   8540.63  $3150.64 
    3/8/96  400 Prime Medi  4027.49   4500.00   $472.51 
    3/5/97  150 Atlas Air   3458.74   3534.38    $75.64 
  12/23/96  100 Tidewater   4652.49   4512.50  -$139.99 
   11/6/97  200 FelCor Sui  7518.00   7287.50  -$230.50 
    2/2/96  200 Green Tree  6077.49   4937.50 -$1139.99 
  
                              CASH   $6427.47 
                             TOTAL  $60689.97