Boring Portfolio

Boring Portfolio Report
Wednesday, February 18, 1998
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (Feb. 18, 1998) -- It's been raining for three days straight here in southern Michigan. The Boring Portfolio could use a break in the weather, as well.

After a sluggish start on Wednesday, the S&P 500 and Nasdaq finished the session up nicely. Not so for the Borefolio, however. It slipped 0.53%, as five of six holdings retreated by a few sixteenths here and there.

Networking gorilla Cisco Systems (Nasdaq: CSCO) provided the only ray of sunshine for us today, gaining $1/2 to close at a bid of $65 7/16.

I saw no news from Cisco other than an item announcing that president and CEO John Chambers will address the 1998 Healthcare Information and Management Systems Society (HIMMS) meeting in Orlando, Fla. next Tuesday.

According to the press release, Chambers will be the first keynote speaker from a networking company ever to address a HIMMS conference. Chambers will highlight the strategic advantages of computer networking to health care.

"Hey John Chambers! You led your company to the top of the heap in the networking industry, with sales topping the $8 billion mark! What are you going to do next?"

"Ah'm goin' to DisneyWorld!"

As noted here yesterday, FelCor Suite Hotels (NYSE: FCH) announced last night that the company is purchasing the 194-suite Doubletree Guest Suites hotel in Columbus, Ohio, bringing its total number of hotels to 74.

Normally, FelCor's stock would rise a couple of notches on such news. Not today. Perhaps owing to a somewhat bearish perspective on the REIT industry offered up in this morning's "Heard on the Street" column in the Wall Street Journal, FCH slipped $3/8 to $35 1/8.

On other matters, the Borefolio ordinarily pays little attention to initial public offerings (IPOs) of stocks. Far more often than not, IPOs shoot up on their debuts only to drop substantially in coming months. Companies going public these days tend to be distinctly unBoring: relatively small, unproven businesses, often in the technology sector, and often with tenuous prospects for showing profits -- and sometimes even sales -- any time soon.

Today was different. I refer, of course, to the IPO of Steelcase (NYSE: SCS). Steelcase is not only a large company, it is the number one office furniture company in the world, with sales exceeding $2 billion in the first three quarters of its 1998 fiscal year, which ends in a couple of weeks.

Steelcase is solidly profitable, excellently managed, and produces top-quality products. I've sat at the same Steelcase desk at work for more than 25 years. (Hmm, maybe it's time to break down and buy a new one?) I'm surrounded by Steelcase file cabinets.

Heck, the company is located in Grand Rapids, about a two-hour drive from my house.

In other words, I know this company, I like it, and the IPO offers an opportunity to become a part-owner -- something I could never be before.

But like so many IPOs, did Steelcase's stock shoot far beyond fair value in its debut? Would it be prudent to wait a while for the hoopla to die down before purchasing some shares -- if, indeed, it makes sense to invest in Steelcase at all?

Dunno -- or at least not yet.

But I definitely intend to poke around in the offering prospectus, maybe make a couple of phone calls, and report back soon.

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


TODAY'S NUMBERS
Stock  Change    Bid 
 ANDW  -  1/8   27.38 
 CGO   -  3/16  29.19 
 BGP   -  7/16  32.19 
 CSL   -  1/2   47.06 
 CSCO  +  1/2   65.44 
 FCH   -  3/8   35.13 
 
                   Day   Month    Year  History 
         BORING   -0.53%   2.32%  -1.19%  24.33% 
         S&P:     +0.91%   5.28%   6.35%  66.03% 
         NASDAQ:  +0.72%   5.95%   9.26%  64.82% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     32.19   185.95% 
   6/26/96  150 Cisco Syst    35.93     65.44    82.11% 
   8/13/96  200 Carlisle C    26.32     47.06    78.78% 
    3/5/97  150 Atlas Air     23.06     29.19    26.58% 
   1/21/98  200 Andrew Cor    26.09     27.38     4.93% 
   11/6/97  200 FelCor Sui    37.59     35.13    -6.56% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  12875.00  $8372.51 
   6/26/96  150 Cisco Syst  5389.99   9815.63  $4425.64 
   8/13/96  200 Carlisle C  5264.99   9412.50  $4147.51 
    3/5/97  150 Atlas Air   3458.74   4378.13   $919.39 
   1/21/98  200 Andrew Cor  5218.00   5475.00   $257.00 
   11/6/97  200 FelCor Sui  7518.00   7025.00  -$493.00 
  
                              CASH  $13182.97 
                             TOTAL  $62164.22