Boring Portfolio

Pentair deflated
Friday, April 24, 1998
by Mark Weaver (

SPRINGFIELD, IL (April 24, 1998) -- After setting records earlier in the week the market ended the week in full retreat. The S&P 500 index was off 1.04% and the Nasdaq Composite fell 0.66%. The Borefolio split the difference -- off 0.79%. For the week the Borefolio dipped 0.81% while the S&P 500 was sacked for a 1.32% loss. The Nasdaq actually rose 0.13% .

On the week four of our stocks fell while three gained ground.

Atlas Air (NYSE: CGO) led off the week with an outstanding earnings report. Atlas bested estimates by 20% as it reported earnings of $0.24 for the quarter. Operating margins were also on the rise as Atlas has finally shed the costly 747's leased from FedEx (NYSE: FDX). You can read the company's thoughts on the quarter by checking out the summary of the conference call which was prepared by Greg Markus.

Atlas was off $1 today but ascended over $2 on the week.

Cisco Systems (Nasdaq: CSCO) was also in the news this week. Cisco announced an alliance with Ciena (Nasdaq: CIEN) to develop technologies to accelerate the deployment of optical networks for carrying voice, video, and data. Cisco and Ciena hope to provide customers with the ability to upgrade the data transmission capabilities of networks while also enhancing voice carrying capabilities.

Cisco also announced a partnership with Telstra, Australia's largest telecommunications company. The two companies will work together to offer networking and communications solutions for Australian business.

The market apparently liked these developments at Cisco and the stock ended up $1/4 today and $1 3/8 for the week.

Greg Markus has spent much of the week scratching his head about our lagging shares of FelCor (NYSE: FCH). FelCor continued to lag today, down $3/8. The company had a big week, announcing the acquisition of eight all-suite hotels from Starwood (NYSE: HOT), a reshuffling of its board of directors, and the hiring of a new director of communications. In spite of what appears to these eyes to be positive news for the company, the shares have languished. FelCor closed down $1 1/8 on the week.

I posted a question about the situation over on the Real Estate message board. Michael Dowd, the chief REIT elf, posted an interesting analysis of FelCor's situation. In his concluding remarks he stated, "The hotel market is clearly still not consolidated so there's property to buy. Upscale and mid-scale hotels are still generating good RevPAR growth. This is generally a market where money can be made by more than one good company. So if you asked me whether I think FCH will generate a decent total return this year, my answer would still be yes. With a 6.3% dividend, re-invested in the stock, I think you'll do quite well as REITs go." Anyway, you might want to read his analysis, and while you're at it enjoy one of the more informative message boards on the Fool.

FelCor reports quarterly earnings on Monday. We will be all ears.

Finally, our latest purchase, Pentair (NYSE: PNR), was in the news this week as a potential bidder for U.K. based Vero Group plc. Vero manufactures electronic enclosures, racks, backplanes and power supplies. Pentair is going up against Applied Power (NYSE: APW) which has already made an offer to buy the company. This would appear to be a great fit for Pentair but, as Greg Markus reported last night, the market doesn't usually take a shine to participants in bidding wars and Pentair is no exception. At this point no firm bid has been forthcoming from Pentair so the action in the stock may be much ado about nothing.

Pentair declined $2 7/16 today and $3 for the week.

As for the rest of the Borefolio, it was a quiet news week. Have a great weekend. I hope that wherever you are it is as beautiful as it is here!

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

Stock  Change    Bid 
 ANDW  -  7/8   22.75 
 CGO   -1       38.75 
 BGP   +  3/16  31.94 
 CSL     ---    50.25 
 CSCO  +  1/4   71.88 
 FCH   -  3/8   33.75 
 PNR   -2 7/16  41.44 
                   Day   Month    Year  History 
         BORING   -0.82%   0.82%   1.91%  28.23% 
         S&P:     -1.04%   0.56%  14.17%  78.23% 
         NASDAQ:  -0.66%   1.81%  19.01%  79.54% 
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     31.94   183.73% 
   6/26/96  150 Cisco Syst    35.93     71.88   100.02% 
   8/13/96  200 Carlisle C    26.32     50.25    90.88% 
    3/5/97  150 Atlas Air     23.06     38.75    68.05% 
   4/14/98  100 Pentair       43.74     41.44    -5.27% 
   11/6/97  200 FelCor Sui    37.59     33.75   -10.22% 
   1/21/98  200 Andrew Cor    26.09     22.75   -12.80% 
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  12775.00  $8272.51 
   6/26/96  150 Cisco Syst  5389.99  10781.25  $5391.26 
   8/13/96  200 Carlisle C  5264.99  10050.00  $4785.01 
    3/5/97  150 Atlas Air   3458.74   5812.50  $2353.76 
   4/14/98  100 Pentair     4374.25   4143.75  -$230.50 
   1/21/98  200 Andrew Cor  5218.00   4550.00  -$668.00 
   11/6/97  200 FelCor Sui  7518.00   6750.00  -$768.00 
                              CASH   $9251.26 
                             TOTAL  $64113.76