New Boring Buy
Tuesday, May 19, 1998
By Greg Markus (TMF Boring)
ANN ARBOR, Mich. (May 19, 1998) -- Anticipation that the Federal Reserve would stand pat on interest rates when it met Tuesday provided a boost to stocks -- although in typical market logic, confirmation of that decision was followed by some selling. When all was said and done, the S&P 500 rose 0.33% and the Nasdaq gained 0.78%.
The Boring Portfolio continued its May blossoming, posting a 1.42% gain with six of seven holdings in the daily plus column.
Cisco Systems (Nasdaq: CSCO), added $2 5/8 to Monday's $1 3/8 advance, extending its move into record territory and closing fractionally beyond the $80 mark.
Reuters reports that the stock jumped after a Donaldson Lufkin Jenrette (NYSE: DLJ) analyst reportedly made positive comments about Cisco gaining market share in local area network switching. DLJ analyst Stephen Koffler reportedly passed along results of a new study by networking market research firm, the Dell'Oro Group.
Reuters quoted Pam Dell'Oro, founder of the Dell'Oro Group, as saying that the survey showed Cisco had 45% of the total Ethernet switching market in the first quarter of 1998, up from a 37% share in the preceding quarter.
I suspect that speculation about a possible stock split is also fueling the rise. Cisco's stock last split 3-for-2 when it reached the $80 neighborhood.
Frankly, all this action in The Kid's stock is getting a tad too exciting for me.
In other Borefolio news, Borders Group (NYSE: BGP) issued a press release this morning announcing the opening this summer of a new Borders superstore in Wynnewood, Pa. -- a suburb of Philadelphia.
On the heels of that press release came 14 more, announcing planned superstore openings later this year everywhere from Shrewsbury, Mass. in the east, to Pasadena, Calif. in the west, to St. Paul, Minn. in the north, to Orlando, Fla. in the south.
Shares of Borders Group gained $5/8 to $33 11/16.
Finally, I'm pleased to announce our intention to add another stock to the Boring basket.
By way of introduction, when I first introduced my Boring approach to investing 2 1/2 years ago, I cautioned against merely buying stocks because you happen to like the products. Personal preferences are a good beginning point, but it should be followed by some due diligence.
I even provided an illustration to go with this piece of advice: "TCBY (NYSE:TBY)? Yummy yogurt, stale stock."
Well, the yogurt's still yummy, and now the stock is looking pretty yummy, too. The company retrenched considerably in 1996, closing unprofitable stores and supplementing its product line. Most importantly, TCBY broadened the brand's retail footprint considerably by inking co-branding deals with fast food companies like Nathan's Famous (Nasdaq: NATH), Subway, and Wall Street Deli (Nasdaq: WSDI) and partnering with gasoline distributors like Chevron (NYSE: CHV), Exxon (NYSE: XON), and Shell (NYSE: RD) and Host Marriott (NYSE: HMS) to offer TCBY products in gas stations, airports, travel plazas, schools, and other "non-traditional" locations.
You're invited to read our "buy" report for all the details. (We'll be buying shares sometime in the next five business days.) As always, the purpose of the report is to illustrate one way to investigate a stock for consideration as an investment. If you don't do your own homework, you've missed the whole point.
Also, as always, we enthusiastically invite your participation in our discussion of TCBY and other Boring investments.
Stock Change Bid ANDW + 1/4 21.88 CGO + 7/8 36.38 BGP + 5/8 33.69 CSL + 11/16 51.75 CSCO +2 5/8 80.38 FCH - 3/16 35.13 PNR + 1/16 44.94
Day Month Year History BORING +1.42% 2.72% 5.98% 33.36% S&P: +0.33% -0.20% 14.33% 78.49% NASDAQ: +0.78% -1.21% 17.54% 77.32% Rec'd # Security In At Now Change 2/28/96 400 Borders Gr 11.26 33.69 199.28% 6/26/96 150 Cisco Syst 35.93 80.38 123.68% 8/13/96 200 Carlisle C 26.32 51.75 96.58% 3/5/97 150 Atlas Air 23.06 36.38 57.75% 4/14/98 100 Pentair 43.74 44.94 2.73% 11/6/97 200 FelCor Sui 37.59 35.13 -6.56% 1/21/98 200 Andrew Cor 26.09 21.88 -16.16% Rec'd # Security In At Value Change 2/28/96 400 Borders Gr 4502.49 13475.00 $8972.51 6/26/96 150 Cisco Syst 5389.99 12056.25 $6666.26 8/13/96 200 Carlisle C 5264.99 10350.00 $5085.01 3/5/97 150 Atlas Air 3458.74 5456.25 $1997.51 4/14/98 100 Pentair 4374.25 4493.75 $119.50 11/6/97 200 FelCor Sui 7518.00 7025.00 -$493.00 1/21/98 200 Andrew Cor 5218.00 4375.00 -$843.00 CASH $9447.76 TOTAL $66679.01
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