Spring Fever
Monday, March 30, 1998
by Greg Markus (TMF Boring)
PRINCEVILLE, Hawaii (March 30, 1998) -- U.S. stock markets snoozed through what looked like a major case of spring fever Monday, with temperatures hitting the 70s and 80s in much of the country. The Dow, S&P 500, and Nasdaq all slipped modestly in relatively light trading.
The trading in stocks held by the Boring Portfolio was generally light, as well. The daily loss was not, however. The Borefolio slumped 1.36% owing to "profit-taking" in shares of Atlas Air (NYSE: CGO), Borders Group (NYSE: BGP), and Cisco Systems (Nasdaq: CSCO). Hey, when there's no news and your stocks retrace a bit from recent highs, what else you gonna call it?
Actually, I spotted one news item that perhaps bears on Atlas Air. As noted in the Monday edition of Investor's Business Daily, David Pierce, regional director marketing-cargo for Boeing (NYSE: BA) Commercial Airplane Group, projects solid growth in world air freight volume despite troubled Asian economies.
According to Reuters, Pierce has revised his forecast to 6.4% to 6.5% annual growth over the next 20 years, down slightly from the 6.7% estimate he issued 18 months ago.
With regard to Asia, where Atlas does a majority of its current business, Reuters pointed out that "most economists have projected huge booms in Asian exports, as the struggling countries try to export their way out of economic downturn."
Atlas Air has offered a similar projection in its recent conference calls with analysts.
Those increases have not yet materialized as fast as everyone had expected, according to Pierce. Nevertheless, he has maintained his forecast of intra-Asia air freight volume growing at an annual rate of 9% over the next 20 years, and he sees cargo volume between Asia and North America increasing at an annual rate of 6% to 7%, down from his previous forecast of 8%.
Atlas Air management and the analysts who follow the company expect its revenues to grow significantly faster than those rates as Atlas expands its lift capacity this year and, quite possibly, in 1999. According to First Call, analysts expect Atlas to earn $1.93 per share this year, up a whopping 75% over 1997. Earnings are projected to grow another 24% in 1999, to $2.40 per share.
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Stock Change Bid ANDW - 3/8 19.25 CGO -1 3/16 31.69 BGP - 15/16 33.00 CSL + 3/16 48.25 CSCO -2 67.38 FCH + 1/8 37.00 |
Day Month Year History
BORING -1.36% -1.03% -0.52% 25.17%
S&P: -0.17% 4.22% 12.69% 75.93%
NASDAQ: -0.27% 2.72% 15.81% 74.71%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 33.00 193.17%
6/26/96 150 Cisco Syst 35.93 67.38 87.50%
8/13/96 200 Carlisle C 26.32 48.25 83.29%
3/5/97 150 Atlas Air 23.06 31.69 37.42%
11/6/97 200 FelCor Sui 37.59 37.00 -1.57%
1/21/98 200 Andrew Cor 26.09 19.25 -26.22%
Rec'd # Security In At Value Change
2/28/96 400 Borders Gr 4502.49 13200.00 $8697.51
6/26/96 150 Cisco Syst 5389.99 10106.25 $4716.26
8/13/96 200 Carlisle C 5264.99 9650.00 $4385.01
3/5/97 150 Atlas Air 3458.74 4753.13 $1294.39
11/6/97 200 FelCor Sui 7518.00 7400.00 -$118.00
1/21/98 200 Andrew Cor 5218.00 3850.00 -$1368.00
CASH $13625.51
TOTAL $62584.89
