Boring Portfolio

Carlisle Comments
Wednesday, June 10, 1998
by Greg Markus
(TMF Boring)

TEMPE, Arizona (June 10, 1998) -- Strength in the bond market failed to help stocks Wednesday, as late-session selling sent major market averages lower, taking the Boring Portfolio down as well. The Dow fell 78 points to close under the 9000 mark.

Rare is the day when shares of Carlisle Companies (NYSE: CSL) jiggle by more than a fraction of a point. Today, however, CSL slid $1 5/16 to $45 11/16.

I'm speculating that recent weakness in the stock reflects concern that the UAW strike at a General Motors (NYSE: GM) plant in Flint, Michigan might affect Carlisle's vehicle parts businesses.

Such a concern (if in fact my speculation is even accurate) is not without some basis in reality, particularly if the strike spreads to other locations and extends into the summer. At the same time, though, it's worth bearing in mind that strikes are not exactly unusual events in the automotive biz -- GM alone has weathered nine UAW strikes in a bit more than the past two years -- and Carlisle has prospered through it all.

After all, only a fraction of Carlisle's profits come from sales to automotive OEMs. Roofing materials, aircraft wiring, foodservice equipment, and tires and wheels for boat trailers, golf carts, and such, are only a few of Carlisle's non-automotive businesses. Moreover, only a fraction of Carlisle's automotive products -- which include plastic bumper beams and assorted molded plastic and rubber parts -- end up on GM cars and trucks.

As it is, analysts are projecting that Carlisle will earn $0.76 per share for the June quarter (as compared with $0.68 a year ago) and $2.70 to $2.75 for 1998 (versus $2.28 in 1997). Preliminary earnings estimates for 1999 are in the $3.05 to $3.10 per share range. The stock also pays a modest dividend, currently around 1.2%.

Trading at less than 17-times projected 1998 earnings and less than 15-times 1999 EPS estimates, CSL represents very good value, in our opinion.

Finally tonight, I noticed that the fiscal third quarter 10-Q filing for Cisco Systems (Nasdaq: CSCO) is now available through the SEC's EDGAR website. Shares of Cisco eased $5/16 to $79 1/8.

One sentence that caught my eye in Cisco's 10-Q was the following: "As the Company focuses on new market opportunities, such as transporting voice, video, and data traffic across the same networks, it will increasingly compete with large telecommunications equipment suppliers."

Indeed it will. Look out, Lucent (NYSE: LU)!

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


TODAY'S NUMBERS
Stock  Change    Bid 
 ANDW  -  9/16  20.63 
 CGO   -  9/16  35.63 
 BGP   -  7/16  31.00 
 CSL   -1 5/16  45.69 
 CSCO  -  5/16  79.13 
 FCH   -  7/16  32.69 
 PNR   +  1/16  41.50 
 TBY   -  3/8    9.38 
 
                   Day   Month    Year  History 
         BORING   -1.43%  -1.33%  -0.14%  25.65% 
         S&P:     -0.55%   1.97%  14.62%  78.93% 
         NASDAQ:  -1.53%  -0.32%  12.92%  70.35% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     31.00   175.40% 
   6/26/96  150 Cisco Syst    35.93     79.13   120.20% 
   8/13/96  200 Carlisle C    26.32     45.69    73.55% 
    3/5/97  150 Atlas Air     23.06     35.63    54.50% 
   4/14/98  100 Pentair       43.74     41.50    -5.13% 
   5/20/98  400 TCBY Enter    10.05      9.38    -6.67% 
   11/6/97  200 FelCor Sui    37.59     32.69   -13.04% 
   1/21/98  200 Andrew Cor    26.09     20.63   -20.95% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  12400.00  $7897.51 
   6/26/96  150 Cisco Syst  5389.99  11868.75  $6478.76 
   8/13/96  200 Carlisle C  5264.99   9137.50  $3872.51 
    3/5/97  150 Atlas Air   3458.74   5343.75  $1885.01 
   4/14/98  100 Pentair     4374.25   4150.00  -$224.25 
   5/20/98  400 TCBY Enter  4018.00   3750.00  -$268.00 
   11/6/97  200 FelCor Sui  7518.00   6537.50  -$980.50 
   1/21/98  200 Andrew Cor  5218.00   4125.00 -$1093.00 
  
                              CASH   $5511.82 
                             TOTAL  $62824.32