Boring Portfolio

Comms Convergence!
... Kid gains, Andrew locked in cellar
by Greg Markus
(TMF Boring)

ANN ARBOR, Mich. (June 24, 1998) -- U.S. equities markets rose sharply higher Wednesday to celebrate the news that Ma Bell and the Cable Guy plan to marry. AT&T (NYSE: T) announced it intends to acquire Telecommunications Inc. (Nasdaq: TCOMA) in a bold move to offer all-in-one communications services -- everything from local and long distance telephony to Internet access and, eventually, on-demand video and videoconferencing -- to consumers and businesses.

The news further validates Cisco Systems' (Nasdaq: CSCO) stated strategy of broadening its product line to facilitate the delivery of voice, video, and data over integrated networks. Cisco's stock rose $7/8 Wednesday to set its third consecutive new high, at $87 3/4.

In light of today's news, it's worth recalling that Cisco is actively involved in the cable market as well as moving into voice communications. As noted in Cisco's most recent post-earnings conference call, The Kid announced a cable partnership with Time Warner (NYSE: TWX) to deliver broadband Internet service to cable subscribers. Cisco also has minority interests in several companies developing cable modems and related technology.

We in the Boring Portfolio have long admired Cisco, and we're delighted to learn that our neighbors in the Cash-King Portfolio do as well. Andrew Corp. (Nasdaq: ANDW) fared less well today, as that stock gave back $1/4 of Tuesday's $1 1/4 gain to close at $19. At that price, ANDW trades at 15-times projected earnings of $1.25 per share for the fiscal year ending September and 13-times estimated FY99 EPS of $1.47.

Shares of Carlisle Companies (NYSE: CSL) and Pentair (NYSE: PNR), the Borefolio's two outstanding diversified manufacturers, continued to recover from recent weakness, rising fractionally.

FelCor Suite Hotels (NYSE: FCH) eased $5/16 to $31 9/16. I discussed recent news on FelCor -- and favorable news, too, in my view -- in yesterday's Boring recap.

Finally tonight, Borders Group (NYSE: BGP) picked up $1/2 to close at $36 13/16, less than a dollar off its all-time high.

Borders sells books, music, and video in real stores and over the Web, shipping many of the titles directly from its own warehouse, the largest of its kind on earth. The company's international expansion strategy is clicking along nicely, too. Not only that, but Borders actually makes a decent -- and impressively increasing --profit doing all this. What a concept, eh?

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


06/24/98 Close

Stock  Change    Bid 
 ANDW  -  1/4   19.00 
 CGO   -1       32.88 
 BGP   +  1/2   36.81 
 CSL   +  1/2   43.94 
 CSCO  +  7/8   87.75 
 FCH   -  5/16  31.56 
 PNR   +  3/8   40.38 
 TBY   -  1/8   8.44 
 
                   Day   Month    Year  History 
         BORING   +0.24%   1.52%   2.75%  29.29% 
         S&P:     +1.20%   3.86%  16.74%  82.25% 
         NASDAQ:  +1.80%   5.56%  19.57%  80.39% 
  
     Rec'd   #  Security     In At       Now    Change 
    2/28/96  400 Borders Gr    11.26     36.81   227.04% 
   6/26/96  150 Cisco Syst    35.93     87.75   144.20% 
   8/13/96  200 Carlisle C    26.32     43.94    66.90% 
    3/5/97  150 Atlas Air     23.06     32.88    42.57% 
   4/14/98  100 Pentair       43.74     40.38    -7.70% 
   5/20/98  400 TCBY Enter    10.05      8.44   -16.00% 
   11/6/97  200 FelCor Sui    37.59     31.56   -16.03% 
   1/21/98  200 Andrew Cor    26.09     19.00   -27.18% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  14725.00 $10222.51 
   6/26/96  150 Cisco Syst  5389.99  13162.50  $7772.51 
   8/13/96  200 Carlisle C  5264.99   8787.50  $3522.51 
    3/5/97  150 Atlas Air   3458.74   4931.25  $1472.51 
   4/14/98  100 Pentair     4374.25   4037.50  -$336.75 
   5/20/98  400 TCBY Enter  4018.00   3375.00  -$643.00 
   11/6/97  200 FelCor Sui  7518.00   6312.50 -$1205.50 
   1/21/98  200 Andrew Cor  5218.00   3800.00 -$1418.00 
  
                              CASH   $5511.82 
                             TOTAL  $64643.07