Boring Portfolio

Billions and Billions
...and a note on FelCor and dividends

by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (Sept. 1, 1998) -- Trading volume set new records Tuesday as U.S. equities rebounded from Monday's sell-off. The S&P 500 gained 3.83% while the Nasdaq rose 5.06%. Volume exceeded 1.2 billion shares on both the NYSE and Nasdaq. "Billions and billions," as the late Carl Sagan would say.

The Boring Portfolio rose 5.39% in value, with six of eight holdings gaining ground. Trading activity in a number of Borefolio issues was impressive, as well. Volume exceeded 37 million shares for Cisco Systems (Nasdaq: CSCO), which soared $8 1/8 to $90. Ohh-h-h, Cees-co!

Over on the NYSE, volume in shares of Borders Group (NYSE: BGP) topped the one million mark -- about double the stock's typical action -- as BGP booked a $2 3/8 advance to $21 5/16. Now that the month of September has begun, the Borefolio begins its official Borders.com Grand-Opening watch....

...Um, all quiet over here. How 'bout over where you are?

As noted in last night's Bore recap, spokesmen at the Borefolio's two diversifieds, Carlisle Companies (NYSE: CSL) and Pentair (NYSE: PNR), were at a loss to account for the drubbing their stocks have sustained of late. Business at both companies remains firmly on track, according to the CFOs at Carlisle and Pentair, and both companies are comfortable with analysts' earnings estimates.

Money has obviously rushed out of mid-cap and industrial stocks this summer, however, and Carlisle and Pentair -- both standing squarely on the corner of Mid-cap and Industrial -- have taken hits, deservedly or not. Some money found its way back into Pentair today, though. PNR rose $1 9/16 on volume of more than 400,000 shares -- about a week's worth of activity for this ordinarily sedate issue. Carlisle still sits on the curb, off $1/4 to $37 5/8 today.

FelCor (NYSE: FCH) gained $5/8 to $21. A lively debate is taking place on the FelCor board at The Motley Fool's home on the Web. Among other things, inquiring Fools want to know why FelCor's stock has gotten singled out among hotel REITs for such punishment this year. Recent statistics from the REIT industry's professional association, the National Association of Real Estate Investment Trusts, suggests that it hasn't been.

According to NAREIT, stocks of lodging REITs fell 25.1% from the beginning of this year until July 31. In the month of July alone they lost 14.4% in value (not counting dividends). The comparable stats for FelCor are -22.3% and -10.9%.

On the face of it, then, it appears difficult to sustain the argument that FelCor's merger with Bristol Hotels was panned by Mr. Market. If anything, FelCor's stock has performed marginally less horribly than those of its peers.

As with all REITs, FelCor's decline in share price is at least partially off-set by its dividend. In FelCor's case, that dividend is now just under 10% on an annualized basis, and the company previously stated that it would probably hike the dividend sometime this month.

Three of the Borefolio's other holdings also pay dividends. TCBY's (NYSE: TBY) is a cool 3.1%, while Pentair currently pays around 1.8% and Carlisle, 1.5%.

These days, every little bit helps.

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


09/01/98 Close

Stock  Change    Bid 
 ANDW  -  3/16  14.63 
 CGO   +  13/16 24.81 
 BGP   +2 3/8   21.31 
 CSL   -  1/4   37.63 
 CSCO  +8 1/8   90.00 
 FCH   +  5/8   21.00 
 PNR   +1 9/16  29.44 
 TBY   +  3/8   6.25 
 
                   Day   Month    Year  History 
         BORING   +5.39%   5.39% -18.10%   3.06% 
         S&P:     +3.83%   3.83%   2.45%  59.94% 
         NASDAQ:  +5.06%   5.06%   0.30%  51.31% 
  
     Rec'd   #  Security     In At       Now    Change 
   6/26/96  150 Cisco Syst    35.93     90.00   150.46% 
   2/28/96  400 Borders Gr    11.26     21.31    89.34% 
   8/13/96  200 Carlisle C    26.32     37.63    42.93% 
    3/5/97  150 Atlas Air     23.06     24.81     7.61% 
   4/14/98  100 Pentair       43.74     29.44   -32.70% 
   5/20/98  400 TCBY Enter    10.05      6.25   -37.78% 
   1/21/98  200 Andrew Cor    26.09     14.63   -43.94% 
   11/6/97  200 FelCor Sui    37.59     21.00   -44.13% 
  
     Rec'd   #  Security     In At     Value    Change 
   6/26/96  150 Cisco Syst  5389.99  13500.00  $8110.01 
   2/28/96  400 Borders Gr  4502.49   8525.00  $4022.51 
   8/13/96  200 Carlisle C  5264.99   7525.00  $2260.01 
    3/5/97  150 Atlas Air   3458.74   3721.88   $263.14 
   4/14/98  100 Pentair     4374.25   2943.75 -$1430.50 
   5/20/98  400 TCBY Enter  4018.00   2500.00 -$1518.00 
   1/21/98  200 Andrew Cor  5218.00   2925.00 -$2293.00 
   11/6/97  200 FelCor Sui  7518.00   4200.00 -$3318.00 
  
                              CASH   $5686.93 
                             TOTAL  $51527.56 
 

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