Boring Portfolio

Thoughts of Atlas Air
...while stranded at the airport

by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (Sept. 2, 1998) -- A late-session "sell" program sent the Dow and S&P 500 into negative territory at the close of trading Wednesday, but the Nasdaq ended the session higher by 1.13%. Trading volume was heavy.

Small-cap stocks fared better then their big brothers, and that's reflected in the Boring Portfolio's daily performance. It rose 1.84% with six of eight holdings gaining ground.

The dateline for this evening's Boring recap was supposed to read "BOSTON, Mass." The continuing strike of Northwest Airlines (Nasdaq: NWAC) pilots has frazzled air travelers' plans and patience at Northwest's three major hubs, one of which is my home away from home, Detroit Metro. The situation is scarcely any better on the other side of the Detroit River, as the Air Canada (Nasdaq: ACNAF) Pilots Association initiated a walkout of its own today.

The folks at Northwest located another flight for me, but the departure time wouldn't work for me, so instead of sitting down to dinner in Cambridge right about now...

Ah, well.

As I pondered my situation, it occurred to me that not only have passengers' plans been disrupted, so have those of the folks who rely upon air cargo services. Did you know that Northwest is the leading domestic hauler of goods by air to and from Asia?

Neither did I, until today.

According to industry experts, Northwest's strike coincides with the beginning of the peak season for shipping clothes, toys, electronics, and other goods from Asia to North America and Europe. And the flood of goods from Asia is likely to be particularly heavy this year, due to the need for Asian nations to support their economies through exports.

Having learned this, my thoughts naturally turned next to the Borefolio's own Atlas Air (NYSE: CGO), since the lion's share of Atlas's business is leasing its Boeing (NYSE: BA) 747 air freighters to carriers that serve the Pacific Rim.

In the near term, it's unlikely that Atlas will benefit much from the strikes by competitors, because its fleet is already fully booked. So the good news is that Atlas is operating at capacity; and the bad news is that Atlas is operating at capacity.

That capacity is being expanded almost as you read this, though. As Atlas followers know, the company took delivery of two brand new 747-400 freighters last month, and three more are slated to join Atlas's fleet later this year. Atlas also closed on a deal last month to acquire a 747-200 from Air France. That plane will join Atlas early next year.

Should you care to learn more about Atlas, and about the air cargo world more generally, I've come across a number of useful places to look. At the top of the list, of course, are the Atlas Air boards within The Motley Fool on America Online (NYSE: AOL) and on the Web. The Fool also has links that can transport you directly to other useful information about Atlas Air, the company, and CGO, the stock.

Fooldom also offers summaries of Atlas's recent quarterly conference calls.

A number of industry publications are also available via the Web, including Aviation Week, Traffic World, and Air Cargo Online. (Look for the story entitled "Cargo of frogs with halitosis sparks off aircraft evacuation." Fascinating.)

Finally, I just learned that Atlas has its own Website up and running. Definitely worth a look.

Enjoy!

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


09/02/98 Close

Stock  Change    Bid 
 ANDW  -  11/16 13.94 
 CGO   +  1/16  24.88 
 BGP   +1 5/16  22.63 
 CSL   -  1/8   37.50 
 CSCO  +1 5/8   91.63 
 FCH   +  9/16  21.56 
 PNR   +  3/16  29.63 
 TBY   +  1/2   6.75 
 
                   Day   Month    Year  History 
         BORING   +1.84%   7.32% -16.59%   4.95% 
         S&P:     -0.37%   3.45%   2.07%  59.34% 
         NASDAQ:  +1.13%   6.25%   1.43%  53.02% 
  
     Rec'd   #  Security     In At       Now    Change 
   6/26/96  150 Cisco Syst    35.93     91.63   154.99% 
   2/28/96  400 Borders Gr    11.26     22.63   101.00% 
   8/13/96  200 Carlisle C    26.32     37.50    42.45% 
    3/5/97  150 Atlas Air     23.06     24.88     7.88% 
   4/14/98  100 Pentair       43.74     29.63   -32.27% 
   5/20/98  400 TCBY Enter    10.05      6.75   -32.80% 
   11/6/97  200 FelCor Sui    37.59     21.56   -42.64% 
   1/21/98  200 Andrew Cor    26.09     13.94   -46.58% 
  
     Rec'd   #  Security     In At     Value    Change 
   6/26/96  150 Cisco Syst  5389.99  13743.75  $8353.76 
   2/28/96  400 Borders Gr  4502.49   9050.00  $4547.51 
   8/13/96  200 Carlisle C  5264.99   7500.00  $2235.01 
    3/5/97  150 Atlas Air   3458.74   3731.25   $272.51 
   5/20/98  400 TCBY Enter  4018.00   2700.00 -$1318.00 
   4/14/98  100 Pentair     4374.25   2962.50 -$1411.75 
   1/21/98  200 Andrew Cor  5218.00   2787.50 -$2430.50 
   11/6/97  200 FelCor Sui  7518.00   4312.50 -$3205.50 
  
                              CASH   $5686.93 
                             TOTAL  $52474.43 
 

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