Drip Portfolio Report
Friday, February 27, 1998
by Jeff Fischer (JeffF@fool.com)

ALEXANDRIA, VA (Feb. 27, 1998) -- For the first time in history, Johnson & Johnson surpassed a market cap of $100 billion on Wednesday, and then the stock continued to make new highs on Thursday and Friday. Meanwhile, Intel declined a few dollars this week after an eight dollar advance last week.

At $75 per share, Johnson & Johnson (NYSE: JNJ) trades at 27 times 1998 earnings estimates and 23.9 times 1999 estimates of $3.13 per share. Because we own $720 worth of Intel and only $180 of Johnson & Johnson, for the next few months I plan to send all $100 per month to Johnson & Johnson and nothing to Intel. (By the way, we make our next $50 Intel purchase on Monday. The stock has declined the past two days.)

So unless something changes drastically, the Drip Port plans to invest solely in Johnson & Johnson for at least the next few months (beginning in March) so that it can begin to even the size of its two holdings. I don't favor one stock over another, necessarily. But I would rather buy more J&J right now for several reasons, all of which are personal preferences and many of which are portfolio-specific -- so my actions shouldn't be followed blindly by Fools. Always invest as you like, of course.

This past week was spent covering Intel (Nasdaq: INTC). On Monday the column considered why Intel is at an advantage as it enters new markets, even when it enters them "late." Tuesday's column provided information on Intel's networking business. The company held a networking conference this past week, so links were given to relevant information. Wednesday we discussed Intel's competition in relation to smaller companies and the industry landscape overall. Importantly, Intel is the owner of the architecture upon which the personal computer CPU industry is built -- to date, anyway.

Finally, probably the most interesting column was Thursday's. That column was written by readers. It contains letters on Intel from Fools across the country, many of them working in the industry.

We should have another column of Intel letters on Monday and then we'll move to our next topic. First I'll share what is planned for the next few months (the industry that we'll begin to study for a buy) but then, before actually starting that, we'll cover Johnson & Johnson's 1997 performance. The stock has already gained 15% this year. What's ahead?

Have a great weekend. Fool on!

--Jeff Fischer

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


Stock Close Change INTC $89 11/16 -2 5/8 JNJ $75 1/2 +1 1/8
Day Month Year History Drip (1.45%) 7.58% 16.42% (0.86%) S&P 500 0.07% 7.04% 8.13% 10.30% Nasdaq (0.37%) 9.33% 12.75% 11.09% Last Rec'd Total # Security In At Current 02/02/98 8.066 INTC $79.929 $89.688 02/09/98 2.498 JNJ $64.902 $75.500 Last Rec'd Total# Security In At Value Change 02/02/98 8.066 INTC $644.72 $723.43 $78.71 02/09/98 2.498 JNJ $162.13 $188.60 $26.47 Base: $1200.00 Cash: $339.75** Total: $1251.78

The Drip Portfolio has been divided into 50.503 shares with an average purchase price of $23.761 per share.

The portfolio began with $500 on July 28, 1997, adds $100 on the 1st of every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress:

2/21/98: Sending $50 to buy INTC.

2/21/98: Sending $50 to buy JNJ.