Drip Portfolio Report
Friday, March 13, 1998
by Jeff Fischer (JeffF@fool.com)


ALEXANDRIA, VA (March 13, 1998) -- The week sped past and winter is blurring by. Soon it will be summer and you'll witness this column becoming noticeably shorter and shorter, and less detailed; until finally one day you'll realize that for the past week you'd been reading the same column, again and again, and you'll wonder where everybody at the Fool disappeared to. But we'll worry about that when it happens.

The Past Week. On Monday Vince Hanks graced us with a column about using DRPs in IRAs -- a very compelling idea, once you overcome the obstacles. Tuesday's column provided the initial list of bank and financial stocks that Dale Wettlaufer is going to analyze for us beginning next week. This is the Drip Port's fourth industry of study in its young life. Knowing how concise Dale is, this will probably take a few months, just as the food industry took three months. (When Dale needs periodic breaks, we'll cover our current stocks as, for example, each company announces earnings next month.)

Dale wanted me to alert you that he's updating his list somewhat from Tuesday. A few companies will be dropped and he's very likely adding Regions Financial Corp. (Nasdaq: RGBK), Fannie Mae (NYSE: FNM), and Washington Mutual (Nasdaq: WAMU), among others.

Wednesday we considered the valuations of the three stocks that we're buying or about to buy. We looked at our companies' prices to 1998 and 1999 earnings estimates and at their enterprise-value-to-sales ratios, too. Our companies appear to be reasonably priced. None are inexpensive, but you wouldn't expect these stocks to be cheap at this point in the market's record-breaking advance. Being DRP investors, this is less of a concern to us, but it's still interesting and important to review the valuations. Please visit that column for the numbers.

Wednesday we decided that we'd send $70 to Johnson & Johnson this month and $30 to Intel. For the reasons behind this, again, please visit that column.

On Thursday the column provided an update on the Campbell Soup (NYSE: CPB) purchase situation and our March Intel (Nasdaq: INTC) purchase, as well as the Harris Trust website situation.

We'll send a check to Moneypaper to buy our first share of Campbell over the weekend. It will probably be postmarked on Monday. (I sense that it will be a "relaxing" Saturday.) Remember, with Moneypaper you can only buy the first share. Don't send for extra shares. The Moneypaper service will only enroll your one share in the Campbell DRP program for you.

On Thursday the column also reviewed Johnson & Johnson's (NYSE: JNJ) 1997 numbers. By the way, we bought $50 worth of J&J on March 10 and received a dividend, too. Specifics will be in the snail mail shortly, I'm certain.

Stock Review. For the week, Johnson & Johnson rose to new highs from a close of $74 last Friday, Intel fell about $1 over the week, and Campbell Soup rose to new highs as well, touching $60 per share. For AOL readers, Investor's Business Daily recently had several articles about Intel. One article was on Intel's Strongarm chip arrangement for the low-end chip market. Intel's recent acquisition of Digital Equipment Corp. facilities was a key part to this deal.

A second article covered Intel's Flash memory chip sales and the growing (and competitive) market. Intel's market share in this industry was about 34% last year, down from 39%. It's an expanding marketplace filled with contenders. A third article was on PC sales growth and Compaq (NYSE: CPQ). This article related to Intel because Compaq is Intel's largest customer and is changing its production process to a more "just-in-time" inventory approach. That could be one of the reasons that Intel is having a slow quarter.

Have a Foolish weekend! If I'm not here on Monday, enjoy reading Dale's columns as he begins to teach about bank and financial stocks. See you on the message boards linked in the top right of this page. Fool on...

--Jeff Fischer

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


TODAY'S NUMBERS

Stock Close Change INTC 76 5/8 +1/4 JNJ 75 1/8 -7/8
Day Month Year History Drip 0.00% (8.39%) 6.65% (9.18%) S&P 500 (0.13%) 1.83% 10.12% 12.32% Nasdaq 0.43% 0.07% 12.82% 11.16% Last Rec'd Total# Security In At Current 03/02/98 8.625 INTC $80.572 $76.625 02/09/98 2.498 JNJ $64.902 $75.125 Last Rec'd Total# Security In At Value Change 03/02/98 8.625 INTC $694.94 $660.89($34.05) 02/09/98 2.498 JNJ $162.13 $187.66 $25.54 Base: $1300.00 Cash: $389.75** Total: $1238.31

The Drip Portfolio has been divided into 54.538 shares with an average purchase price of $23.837 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: Sent $50 to buy JNJ.