Fool Portfolio Report
Tuesday, October 17, 1995
A smashing day for The Fool Portfolio and an exciting night tonight for The Motley Fool Inc. as we feature two important auditorium events (one quite more significant to those of us concerned with finance). At 8 PM tonight in the Odeon Auditorium (keyword: Odeon) Rogue presents Julia Phillips, producer of The Sting and best-selling author of the book "You'll Never Eat Lunch In This Town Again."
Then at 10 PM tonight in The Globe (keyword: Globe) The Fool features Joe Besecker of Emerald Research, who has presented strikingly accurate projections for Iomega Corporation's preceding two quarters. Joining the fray will be MF Chiros, MF Ben, and MF DrJimbo on stage. We'll review Iomega's third quarter numbers; we'll work through some of the challenges facing IOMG going forward, and we'll be bringing up guest Fools onstage to share their opinions on the stock---bears and bulls alike!
Now to the portfolio. . . what a day. Foolishness grew by another 1.53% versus S&P gains of 0.64%. For fiscal 1995, we again approach the doubling of market average, with the S&P up 27.76% and belled-cappedness up 49.25%.
Let's pause for a moment on Ride Snowboard (NASDAQ:RIDE), a stock that has more than doubled since our purchase on May 23, 1995. Riding the wave of a popular industry, quality management, financial strength and a strong brand, this investment has brought in over $6,000 for us.
If, as we have, we can compound 122% growth every six months in Ride for the next decade, our $5000 investment will explode into $42.26 billion (pre-commissions and sans cap-gains taxes). I'm not joking here; this isn't the compounding clown talking; we're looking to take over the world with our Ride investment. A board on every heel---our primary mode of transportation---goodbye, TGV Train Grand Vitesse. The Company announces quarterly earnings on Thursday. We're lookin' forward to 'em.
KLA Instruments blasted north to $43 1/4, up $5 on the bid today. Liberty Financial Equity Fund released its September holdings, and KLA Instruments is on the list of new buys. Liberty, an $850 million fund, also loaded up on Microsoft, adding to its core MSFT holding; Microsoft just announced earnings of 78 cents versus estimates of 70 cents.
The semiconductor-equipment universe threw out some impressive earnings today, which were accompanied by analyst upgrades across the board. Applied Materials was also in on this run, up $3 to $50 1/2. Overall, KLAC is now down 3.27% and Applied Materials is off 12.21%. We continue to price these stocks 40% above their current prices over the succeeding year.
General Electric (NYSE:GE) announced third-quarter numbers above expectations. Ahh, GE. . . again and again and once more, and then again, the Company meets or exceeds expecations, which on their own are extraordinary for a company of this size. Let the market bears mope and sell thousands of dollars of investment advice to other market bears; in the meantime, we Fools will just rotate into and out of stocks like General Electric, eh?
Oh, the numbers. On revenues of $17.3 billion, earnings for the quarter rose to $1.6 billion (9.2% margins), or 96 cents a share. For the nine months, on revenues of $50.3 billion, GE has earned $4.7 billion, or $2.79 a share. Pause for a second and consider that the numbers above show 19% sales growth over the year-ago, nine-month period. That's nearly unfathomable; it's the result of a committment to high-profitability and industry domination. GE is also commendably focused on shareholder value; the stock has compounded 20.7% annual growth over the past three years. We're looking for $72-$75 over the next year.
One of the only stocks to lose money for us today, Chevron, was cut to Hold from Buy by UBS Securities. Oh well.
Looking over the portfolio, we've now turned $50,000 into $82,857 in fourteen months during a phenomenal market year. In the succeeding twelve months, Iomega Corporation may well prove to be the most exciting and most educational holding in the history of Folly Online. With the Company gearing up to offer the Jaz drive, and projecting the capacity to meet demand, Iomega's numbers could stun Wall Street.
Will the Company post in excess of $175 million in sales for their fourth quarter? Will profit margins rise significantly for the quarter? Are we looking at in excess of 60 cents EPS for the 4th quarter? And. . . 1996? Join us in the Auditorium tonight at 10 PM.
Keep beating the market.
- Tom Gardner, 10/17/95
AMER - 1/4 AMAT +3 CHV - 1/2 GE +1 GPS - 3/8 IOMG + 1/8 KLAC +5 RIDE + 3/4 S - 1/8 SNIC ---
Day Month Year History FOOL +1.53% -1.90% 49.25% 65.72% S&P 500 +0.64% 0.40% 27.76% 28.00% NASDAQ +1.69% -0.78% 37.69% 43.77% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 64.25 341.71% 5/23/95 510 Ride Inc. 9.91 22.00 122.07% 5/17/95 335 Iomega Corp 15.11 20.13 33.16% 8/5/94 165 Sears 28.93 35.38 22.30% 4/20/95 155 The Gap 32.55 37.75 15.98% 8/11/95 95 GenElec 57.91 63.88 10.29% 8/11/95 110 Chevron 49.00 47.75 -2.55% 8/24/95 130 KLA Instrm 44.71 43.25 -3.27% 8/24/95 100 AppldMatl 57.52 50.50 -12.21% 12/23/94 340 SonicSol 14.48 10.00 -30.95% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 21845.00 $16899.44 5/23/95 510 Ride Inc. 5052.44 11220.00 $6167.56 5/17/95 335 Iomega Corp 5063.13 6741.88 $1678.75 8/5/94 165 Sears 4772.65 5836.88 $1064.23 4/20/95 155 The Gap 5045.25 5851.25 $806.00 8/11/95 95 GenElec 5501.87 6068.13 $566.26 8/11/95 110 Chevron 5389.99 5252.50 -$137.49 8/24/95130 KLA Instrm 5812.49 5622.50 -$189.99 8/24/95 100 AppldMatl 5752.49 5050.00 -$702.49 12/23/94 340 SonicSol 4924.18 3400.00 -$1524.18 CASH $5969.86 TOTAL $82857.99