Boring Portfolio

Boring Portfolio Report
Tuesday, March 03, 1998
by Greg Markus (TMFBoring@aol.com)


ANN ARBOR, Mich. (March 3, 1998) -- The Dow continued to power ahead Tuesday, rising 34 points to set its fifth straight record. The S&P 500 picked up 0.41%, but the Nasdaq suffered its third straight loss, falling 0.09%.

Weakness in its four-letter holdings sent the Boring Portfolio south by 0.13%. Andrew Corp. (Nasdaq: ANDW) fell $5/16 and Cisco Systems (Nasdaq: CSCO) lost $3/4 as part of a weak telecommunications and networking group.

Today's loss aside, Cisco continues to pull in the accolades. The Kid captured the top slot in the Forbes ASAP "Dynamic 100" list, scoring 5 out of a possible 5 in three categories -- market opportunity, marketing expertise, and human capital -- and scoring 4 out of 5 in three other categories. You can read about it online at the Forbes ASAP site.

Tuesdays bring the results of First Call's latest survey of analysts' earnings projections, available at First Call's site on America Online (NYSE: AOL). With no major news on Borefolio holdings coming out today, let's do a quick run-through of the numbers for a few of our stocks.

First up is Andrew. The consensus projection of eight analysts who follow Andrew is that the company will earn $1.43 in its fiscal year ending September 1998. That would constitute a 21% gain over FY97's $1.18. Estimates looking beyond the current year can be quite tenuous, but for what it's worth, the consensus forecast for FY99 is EPS of $1.63.

Based on current projections, ANDW is trading at 19-times per-share earnings for calendar-year 1998 -- a discount to the company's projected growth rate over the next three to five years and also a discount to its historic p/e.

Analysts are expecting Atlas Air (NYSE: CGO) to increase earnings by a brisk 75% this year, to $1.93 per share. Whether that comes to pass depends on Atlas receiving in a timely fashion the additions to its fleet that the company has on order from Boeing (NYSE: BA). In a recent conference call, Atlas management said they saw no reason for that not to occur.

At today's closing price of $29 5/8, CGO currently trades at around 15-times 1998 earnings. That's well below the company's short-term growth rate but more or less in line with the multiple on other air freight companies. Should Atlas demonstrate this year that it can expand its business without experiencing the kinds of growing pains it displayed last year, the stock's multiple could well expand somewhat to reflect the company's well above-average growth prospects for the near-term.

Borders Group (NYSE: BGP) is slated to report its fourth quarter results next week. Since the company has already said it expects to earn $0.97 to $0.98 for the fiscal year ending January 31, the numbers are not in any doubt. What will be far more significant is any update the company will provide about the launch of its Website for selling books, music, and videos.

As it is, analysts project that Borders will make $1.21 in the current fiscal year, or around a 23% gain over the year just ended. Borders management has said the target is 25% annual growth into the next millennium. At today's price of $33 1/2, BGP trades at 27.7-times projected earnings. That's a slight premium to the S&P 500 and to the company's long-term growth prospects, but it reflects Borders's record of reliable earnings growth and longer-term opportunities for international expansion as well as Web-based marketing and sales.

We're delighted to hold all three stocks.

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


TODAY'S NUMBERS
Stock  Change    Bid 
 ANDW  -  5/16  27.81 
 CGO   -  1/8   29.63 
 BGP   +  3/16  33.50 
 CSL   -  1/4   48.31 
 CSCO  -  3/4   64.44 
 FCH   +  7/16  36.13 
 
                   Day   Month    Year  History 
         BORING   -0.13%  -0.15%   0.36%  26.28% 
         S&P:     +0.41%   0.26%   8.41%  69.24% 
         NASDAQ:  -0.09%  -0.75%  11.89%  68.80% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     33.50   197.61% 
   8/13/96  200 Carlisle C    26.32     48.31    83.52% 
   6/26/96  150 Cisco Syst    35.93     64.44    79.33% 
    3/5/97  150 Atlas Air     23.06     29.63    28.48% 
   1/21/98  200 Andrew Cor    26.09     27.81     6.60% 
   11/6/97  200 FelCor Sui    37.59     36.13    -3.90% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  13400.00  $8897.51 
   8/13/96  200 Carlisle C  5264.99   9662.50  $4397.51 
   6/26/96  150 Cisco Syst  5389.99   9665.63  $4275.64 
    3/5/97  150 Atlas Air   3458.74   4443.75   $985.01 
   1/21/98  200 Andrew Cor  5218.00   5562.50   $344.50 
   11/6/97  200 FelCor Sui  7518.00   7225.00  -$293.00 
  
                              CASH  $13182.97 
                             TOTAL  $63142.35