Fool Portfolio Report
Tuesday, February 13, 1996

NOTE: Thursday night at Border's Books on Lee Highway in Fairfax, VA, David and I will be signing books and talking investments from 7:30 to 8:30 PM. It's Valentine's Day. . . bring a date! Questions---Call (703) 359-4983.

by Tom Gardner (TomGardner)

After the bell rang to close out our second consecutive losing day, Applied Materials (NASDAQ:AMAT) announced first quarter 1996 sales of $1.04 billion versus $506 million over the same period last year. Earnings came in at $172 million versus $66 million and earnings per share figures rose to $0.93 versus $0.38 last year. Importantly, these numbers exceeded consensus analyst estimates, with EPS coming in 6 cents above projections.

In after-hours trading, the stock that reads down $1 1/2 in the column to your right is now up from its close of $38 3/8 to $41. Naa, we don't account for those gains until tomorrow, if they hold during the day. But it does make that Fool Portfolio 0.56% loss of today more bearable.

For complete coverage of Applied Materials' earnings numbers and for in-depth coverage and explanation of the recent book-to-bill figures, enter our research reports available via our mainscreen listbox. If you want a bullish indicator for all of the high-quality technology holdings in your portfolio, consider just how much even lowly Fools can achieve via this medium.

We don't expect offline investors will find packages of content covering the world of semiconductors on their doorstep in the morning or rotated through on the network news. Nor will offline investors be greeted with an opportunity to tell the king he's wrong if he is! No-response media is looking ever sluggish from out our Fool Global HQ windows. But we're biased.

Apparently Goldman Sachs agrees with us, though. This morning, Goldman Sachs announced significant earnings and price-target upgrades for what today is the world's leading online communications company, America Online (NASDAQ:AMER). GS upgraded fiscal 1996 estimates from $0.75 to $1.00, and boosted their 12-month target price from $60 to $100 a share. AMER closed up $1/4 on the day.

At this point I direct new Fools and old to drop back into our Fribble area (accessible behind the button captioned "The Daily Fool" on our mainscreen). Then click "More" a handful of times, scroll down to MF Bogey's Fribble of May 17th, 1995 entitled "Betting on Dead Dingoes," and enjoy it. Bogey reminds us all that the best public companies out there often just keep right on winning, year after year. And their stocks follow up in tow.

Remember that we bought AMER at $60 a share eighteen months ago and disregarding the splits, the stock is trading at $393 today. If the stock hits Goldman's target, it'll be sitting up around $800 less than three years after we purchased it. Not to brag, though in the tradition of Neon Deion we love to brag, the point here is just that the best investors buy and hold great companies in blooming industries---even if (or particularly if) their competitors tell you the stock's overpriced!

Sears deserves mention today, rising $1 1/8 to $46. Sears continues to trot around the winner's circle, the single best performing Dow stock over the last 12 months. A quick check of our Dow 30 Area shows Sears up 71% in 1995, and now up another 14% in 1996. We're glad to be holding it and fired up to be onboard as owners of a company run by Arthur Martinez. One of the beauties of these Dow turnarounds is that you end up getting to cheer for and learn from some of the best managers on the planet.

But lest all this talk of estimate-smashing earnings, monstrous price upgrades, and best-performing stocks confuse you, a Fool is here at the end of the report to remind us all that we lost to the S&P 500 today by over 0.40%. This puts us up 107% since our inception in August 1994 versus 44% growth in the S&P 500 index. . . the same one that loads of mutual funds lost to last year. We don't mind losing on occasion, since our primary aims are to inform, to amuse, to hold ourselves to the highest accounting standard in the industry, and to help investors beat the market over the long haul.

It was a real pleasure meeting many of you out on the road during our booksigning, and it is also a real pleasure now to be home again for a little rest. Stay Foolish,


Can I get any Foolishness offline?

Yes, in two spoonfuls.

The Motley Fool Investment Guide (Simon & Schuster, $24.00) is now out on bookshelves across the planet. It is our sincere hope that we've outlined an investment approach that will lead first to market-meeting, then next to market-beating investment returns for any investor Foolish enough to listen. As always, our aim is to get as many people involved with the most profitable investment vehicle over the 20th century as possible. . . and involved with it for decades to come. We hope you, your family, their family, their family's family and, yes, members of their family's family's family will find great value in our book.

And the second spoonful comes via SmartMoney magazine. For a couple dollars a month, you can pick up our latest ramblings about investments, stock valuations, and the lack of accountability on the Street.

We're obviously very pleased to be involved with two of the most aggressive, enterprising, and dare we say somewhat Foolish publishers around.

Today's Moves

AMER + 1/4
AMAT -1 1/2
CHV + 1/8
GE ---
GPS - 1/4
IOMG - 3/8
KLAC -2 1/4
MDRX - 3/8
S +1 1/8

Today's Numbers

Day Month Year History FOOL -0.56% 4.69% 11.01% 107.29% S&P 500 -0.14% 3.85% 7.24% 44.09% NASDAQ -0.74% 2.59% 3.33% 50.97% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 49.13 575.45% 5/17/95 1005 Iomega Cor 5.04 14.00 177.89% 8/5/94 165 Sears 28.93 46.00 59.03% 4/20/95 155 The Gap 32.55 49.38 51.69% 8/11/95 95 GenElec 57.91 79.75 37.70% 8/11/95 110 Chevron 49.00 56.25 14.80% 1/29/96 250 Medicis Ph 27.86 29.63 6.34% 8/24/95 100 AppldMatl 57.52 38.38 -33.29% 8/24/95 130 KLA Instrm 44.71 29.00 -35.14% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 33405.00 $28459.44 8/24/95 100 AppldMatl 5752.49 3837.50 -$1914.99 5/17/95 1005 Iomega Cor 5063.13 14070.00 $9006.87 8/5/94 165 Sears 4772.65 7590.00 $2817.35 4/20/95 155 The Gap 5045.25 7653.13 $2607.88 8/11/95 95 GenElec 5501.87 7576.25 $2074.38 8/11/95 110 Chevron 5389.99 6187.50 $797.51 1/29/96 250 Medicis Ph 6964.99 7406.25 $441.26 8/24/95 130 KLA Instrm 5812.49 3770.00 -$2042.49 CASH $12147.13 TOTAL $103642.76