Monday, March 30, 1998
Cash-King Portfolio
Report
by Tom Gardner
([email protected])
ALEXANDRIA, VA (Mar. 30, 1998) -- The Cash-King Portfolio crept forward a half step last week during a flat period for the overall market. Take a look at the performance of our five CK stocks and our Foolish Four stocks individually for the week. Then let's review some of the important news because there was a lot of it.
Cash-King Last This Change Microsoft $81.75 $87.75 + 7.3% Intel $75.75 $78.88 + 4.1% Pfizer $92.50 $95.75 + 3.5% Coca-Cola $77.50 $75.19 - 3.0% T R Price $72.50 $69.75 - 3.8% Fool Four Last This Change Estmn Kdk $62.75 $63.94 + 1.9% Exxon $67.13 $67.63 + 0.7% GM $70.75 $68.31 - 3.4% Chevron $86.88 $83.00 - 4.5%
Microsoft (Nasdaq: MSFT) spent another week in court! The company said last Tuesday that it would comply with a preliminary ruling by Federal District Court Judge Ronald H. Whyte that Microsoft no longer use the Java Compatibility Logo on its packaging and websites for Internet Explorer and Software Developers Kit for Java. Our company seemed to overrun this announcement with a quarterly conference call sharing its expectations that it would beat Wall Street EPS estimates for the quarter by 4 cents.
Later in the week, Bill Gates gave a speech to students and faculty at Valencia Community College in Orlando, Florida, at which he opined the following:
"America is leading the way in high technology. In the next seven years, it is estimated that 80 percent of new jobs in this country will be in high-tech."
Mama, don't let your babies grow up to be Luddites!
On Friday, Pfizer announced that the Food & Drug Administration had approved its Viagra oral therapy for the treatment of male impotence. In tests on more than 4,000 men, Viagra proved effective in up to 70-80% of impotent men with a broad range of medical conditions -- from diabetes to spinal cord injury to psychological difficulty.
The drug is expected to be available by prescription by mid-April. The wholesale price of Viagra will be $7 per tablet. An estimated 30 million men in the United States are affected by impotence. It seems likely that Viagra will be Pfizer's next blockbuster drug. If you didn't get a chance to see ABC 20/20's recent coverage of Viagra, here's a link to the short transcript: 20/20 on Viagra.
Intel Corp. (Nasdaq: INTC) said on Thursday that its CEO Andy Grove -- Time Magazine's Man of the Year in 1997 -- would be moving into a full-time position as chairman at the company and that Craig Barrett, current president and chief operating officer, will step in as its next chief executive officer. The formal transition will begin at the company's annual meeting on May 20.
On Thursday, March 26th, Coca-Cola (NYSE: KO) traveled to Biloxi, Mississippi, to celebrate the 100th anniversary of Barq Root Beer, the soft drink brand it purchased in 1995. Mayor A.J. Holloway officially proclaimed the day "Barq's Root Beer Day" in Biloxi, and Barq's was formally named the "Official Root Beer of Biloxi." The root-beer maker's founder, Edward C. Barq, Sr., was born in 1871 to French parents in the French Quarter of New Orleans. Barq bottled and sold his first soft drink in 1898 in Biloxi.
Up in Baltimore, Maryland, T. Rowe Price had no news on the week.
And there ends our coverage of the news on our Cash-King stocks for the past week. Our Foolish Four holdings didn't recently distinguish themselves and haven't since we purchased them. But patience is the key ingredient in that dish.
Finally, this week I'll be reviewing Coca-Cola's business in, I hope, a colorful and enlightening fashion. Tomorrow, I'll work through what many on Wall Street consider to be an insurmountable challenge for the company -- growing earnings faster than the broader market. On Wednesday, I'll discuss how to value Coca-Cola's business, with a new wrinkle on the price-to-earnings ratio. On Thursday, I'll offer some ways that I think Coca-Cola can improve on its position (how Foolishly presumptuous... but, heck, we are owners now!). And on Friday, I'll end with a short financial lesson about investing in global consumer franchises.
Coca-Cola closed up more than $3 today on an announcement covered in our Evening News. I hope you'll follow along this week's coverage of the Big Red Train, and drop by our message folder if you have any questions.
-Tom Gardner, Fool
TODAY'S
NUMBERS
Stock Change Bid ---------------- CHV + 1/16 83.06 KO +3 1/8 78.19 EK + 1/16 64.00 XON + 3/8 68.00 GM - 1/16 68.25 INTC -1 1/2 77.38 MSFT + 3/16 87.94 PFE +1 15/16 97.69 TROW -1 1/2 68.25 |
Day Month Year History
C-K +0.30% 1.69% 3.48% 3.48%
S&P: -0.17% 4.22% 9.22% 9.22%
NASDAQ: -0.27% 2.72% 10.03% 10.03%
Rec'd # Security In At Now Change
2/3/98 22 Pfizer 82.30 97.69 18.70%
2/27/98 27 Coca-Cola 69.11 78.19 13.14%
2/3/98 24 Microsoft 78.27 87.94 12.35%
3/12/98 20 Exxon 64.34 68.00 5.70%
3/12/98 20 Eastman Ko 63.15 64.00 1.35%
2/6/98 28 T. Rowe Pr 67.35 68.25 1.34%
3/12/98 15 Chevron 83.34 83.06 -0.34%
3/12/98 17 General Mo 72.41 68.25 -5.74%
2/13/98 22 Intel 84.67 77.38 -8.62%
Rec'd # Security In At Value Change
2/3/98 22 Pfizer 1810.58 2149.13 $338.55
2/27/98 27 Coca-Cola 1865.89 2111.06 $245.17
2/3/98 24 Microsoft 1878.45 2110.50 $232.05
3/12/98 20 Exxon 1286.70 1360.00 $73.30
2/6/98 28 T. Rowe Pr 1885.70 1911.00 $25.30
3/12/98 20 Eastman Ko 1262.95 1280.00 $17.05
3/12/98 15 Chevron 1250.14 1245.94 -$4.20
3/12/98 17 General Mo 1230.89 1160.25 -$70.64
2/13/98 22 Intel 1862.83 1702.25 -$160.58
CASH $5666.26
TOTAL $20696.39
*The year for the S&P and Nasdaq will be as of 02/03/98
