Boring Portfolio

Boring Portfolio Report
Friday, January 30, 1998
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (Jan. 30, 1998) -- The benchmark averages closed lower Friday but ended the week up nicely. For the week, the S&P 500 gained 2.37% to move into the black for 1998, while the Nasdaq rose 2.75%, extending its January advance to 3.12%.

The Boring Portfolio, fell 1.12% Friday as recent addition Andrew Corp. (Nasdaq: ANDW) gave back some of its recent gains. That pushed the Borefolio lower for the week (-0.09%) and for the month (-3.43%).

The majority of the Borefolio's 1998 losses are attributable to two stocks that we sold this week: financial services company Green Tree Financial (NYSE: GNT) and marine services leader Tidewater (NYSE: TDW). Both stocks reported their quarterly results early in the week, and both offered guidance indicating that 1998 could well be less than what we had been expecting. The rationale for the two sales may be found in our Green Tree and Tidewater "sell" reports.

As for our remaining investments...

Cisco Systems (Nasdaq: CSCO) eased $11/16 after having a simply spectacular week that saw the stock of the networking gorilla climb nearly 10% and establish a new all-time high. Cisco will report results for its January quarter on Tuesday, Feb. 3, after the closing bell. We'll be covering the follow-up conference call and offering you a timely summary.

According to First Call, the consensus estimate of the nearly three-dozen analysts who follow the Kid is for earnings of $0.42, with the range spanning from, $0.40 to $0.43. In the year-ago quarter, Cisco earned $0.34 per share.

During the week, Cisco and U S WEST (NYSE: USW) announced a strategic alliance in which Cisco will supply equipment to support U S WEST's build-out of an integrated voice-data network to serve businesses and consumers nationwide.

According to the press release, U S WEST will install Cisco BPX wide-area network ATM switches in over 80 points of presence (POPs) around the United States by the end of this year. Deployment in the first of these POPs has already begun. The two companies will also explore collaborate on several next-generation technologies, such as IP telephony.

Earlier, U S WEST announced plans to use Cisco AS5200 and AS5300 universal access servers to deploy over 200,000 Cisco dial access ports over the next five years.

We haven't heard much from Atlas Air (NYSE: CGO) in a while, but the company made up for it with two announcements this week.

On Wednesday, Atlas announced that its pilots voted to reject representation by the Air Line Pilots Association. Atlas offers its pilots a profit-sharing plan.

In a press release, Atlas founder, chairman, president, and CEO Michael Chowdry (it didn't say whether he also gasses up the planes) said, "We are very pleased that our pilots have chosen not to organize. We recognize, however, that we need to continue to act on our commitment to provide all of our employees with a positive working environment. We pledge ourselves to listen to our workforce and take action when appropriate."

In a second press release, issued Thursday, Atlas announced it has placed approximately $539 million in Enhanced Equipment Trust Certificates as permanent, long-term financing for its purchase of new Boeing 747-400 freighter aircraft. With this transaction, Atlas's financing is in place to take delivery of the aircraft later this year. The company obtained "up to 20-year financing at an all-in interest rate of approximately 7.5%."

Atlas stock rose $1/2 Friday. For the week, CGO ascended 3.2%.

The Borefolio is prepped to do some ascending of its own. With the sales of Green Tree and Tidewater this week, the Borefolio begins its third year with more than $13,000 in cash to invest in attractively priced equities of high quality companies with solid prospects for outstanding capital appreciation.

I'm excited.

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


TODAY'S NUMBERS
Stock  Change    Bid 
 ANDW  -1 7/16  27.50 
 CGO   +  1/2   22.50 
 BGP   -  1/2   32.25 
 CSL   -1       44.25 
 CSCO  -  11/16 63.06 
 FCH   +  11/16 37.44 
 
                   Day   Month    Year  History 
         BORING   -1.12%  -3.43%  -3.43%  21.51% 
         S&P:     -0.53%   1.02%   1.02%  57.70% 
         NASDAQ:  -0.01%   3.12%   3.12%  55.56% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     32.25   186.51% 
   6/26/96  150 Cisco Syst    35.93     63.06    75.50% 
   8/13/96  200 Carlisle C    26.32     44.25    68.09% 
   1/21/98  200 Andrew Corp   26.09     27.50     5.40% 
    3/5/97  150 Atlas Air     23.06     22.50    -2.42% 
   11/6/97  200 FelCor Sui    37.59     37.44    -0.41% 
      
 Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  12900.00  $8397.51 
   1/21/98  200 Andrew Corp 5218.00  5500.00   $282.00 
    3/5/97  150 Atlas Air   3458.74   3375.00   -$83.74 
   8/13/96  200 Carlisle C  5264.99   8850.00  $3585.01 
   6/26/96  150 Cisco Syst  5389.99   9459.38  $4069.39 
   11/6/97  200 FelCor Sui  7518.00   7487.50   -$30.50 
  
                              CASH  $13182.97 
                             TOTAL  $60754.85