Fool Portfolio Report
Wednesday, January 24, 1996
**The Fools are off on their book tour, they'll be in LA on Thursday and Seattle on Friday. Tonight we bring you a pinch hitter, MF Cubster of Today's Pitch fame. Enjoy!**
(FOOL GLOBAL WIRE)
by MF Cubster (Joe Hecht)
--(Chicago, IL, Jan. 24)-- The Fool portfolio made a little money today, but we don't like to focus too much on the here and now. Rather, we keep our eyes on the future and today was just the day for forward thinking. Like Iomega's next quarterly report?
As the Beach Boys sang: "She'll have fun, fun, fun until her daddy takes the I-Bird away." What, you say T-Bird? Well here in Fooldom, we know the fastest moving vehicle has been the "I-Bird" better known as Iomega. The little company from Roy, Utah came out with earnings after the bell today. Their revenues were up to $148 million versus last quarter's $85 million. The earnings per share were $0.47, with margins improving from 25% to 30%.
Lets just say that there is huge growth going on since their next blockbuster product, the Jaz one gigabyte removable storage drive will not generate revenue until the next quarterly report. One more IOMG mention, they said on Wednesday that it would work with Hewlett-Packard Co.'s Home Products Division on computer storage projects for consumers. I suspect more Original Equipment Manufacturer deals are on the way.
The bit-by-bit dissection of the earnings statement and conference call can be found in the Motley Fool Iomega folder, and the IOMG special edition in the main MF listbox.
The following is the initial reaction of IOMG Fool MF Horns:
<<<My first thoughts on seeing only revenue and earnings numbers is that they are right in line with Emerald and Brous, but well short of most Foolish estimates. However Fool RSchoensta appears to beat everyone for best combination of earning and revenue with his $0.48/share earnings and $142M revenue estimate.
The initial Reuter's News spin is "4Q $0.47/sh versus $0.07/sh last year." If that is the way the Street reads this, shareholders are in good shape. Revenue comes in at $148M, a substantial increase over $85M in third quarter. We knew from market research (OK, Zip Sightings) that sales were real good throughout the quarter with increasing volumes right along. Now we have a sort of calibration of what that increase was worth - about $63M in revenue.
Only a fool (lower case) ever tries to predict the market on a day to day basis so I won't. The stock and the IOMG Folder will both be volatile over the next two months, but I don't look for either to rocket. Rather, I foresee a pattern similar to each of the last two quarters. These results are not a blowout or a bust. They are only an invitation to hold the stock with strong hands, to buy more if you are so inclined and to wait for next quarter's results.>>>
Spoken like a true Motley Fool. The Fool chat rooms will be buzzing IOMG talk tonight, so jump right in to the conversations!
On other fronts, our other big gainer was Applied Materials. It looks like the Stampeding Mutual Fund called Fidelity Magellan has had a change of heart. The fund (managed by Jeff Vinik) is buying technology stocks again, including Intel and Applied Materials.
Those Fools that have been following this portfolio know that Foolish stocks are selected based on fundamental valuations, such as strong cash position, improving margins and advancing earnings per share growth rates. When the Fools added AMAT as one of their ponies, they knew that they had a strong legged mare. Sometimes market turbulence conflicts with a stocks price but when the fundamentals are strong, patience usually wins out. It now appears that those external forces beyond our control are coming into line--finally.
Beating the Dow selection General Electric was up but Chevron was flat. Chevron also came out with earnings which the street apparently wasn't enamored with, but heck, this is Beating the Dow. There is usually something good that comes to all the Dow Behemoth companies when things look bleakest. Chevron will be in the Fool portfolio at least 'til August.
America Online had no news and didn't move much today. The earnings are due Tuesday, Feb. 6th. So stay tuned....
AMER - 1/8 AMAT +2 3/8 CHV + 1/8 GE + 7/8 GPS + 1/2 IOMG +1 7/8 KLAC + 1/2 S - 3/4
Day Month Year History FOOL +1.09% 1.37% 1.37% 89.27% S&P 500 +1.17% 0.65% 0.65% 35.24% NASDAQ +1.50% -0.82% -0.82% 44.89% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 38.13 424.21% 5/17/95 335 Iomega Corp 15.11 46.63 208.49% 4/20/95 155 The Gap 32.55 45.25 39.02% 8/5/94 165 Sears 28.93 39.88 37.86% 8/11/95 95 GenElec 57.91 73.75 27.34% 8/11/95 110 Chevron 49.00 51.88 5.87% 8/24/95 100 AppldMatl 57.52 38.75 -32.64% 8/24/95 130 KLA Instrm 44.71 29.25 -34.58% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 25925.00 $20979.44 5/17/95 335 Iomega Corp 5063.13 15619.38 $10556.25 4/20/95 155 The Gap 5045.25 7013.75 $1968.50 8/5/94 165 Sears 4772.65 6579.38 $1806.73 8/11/95 95 GenElec 5501.87 7006.25 $1504.38 8/11/95 110 Chevron 5389.99 5706.25 $316.26 8/24/95 100 AppldMatl 5752.49 3875.00 -$1877.49 8/24/95130 KLA Instrm 5812.49 3802.50 -$2009.99 CASH $19109.62 TOTAL $94637.12