Fool Portfolio Report
Friday, May 24, 1996
NOTE: Our policy regarding Fool Portfolio trade announcements has changed...Click HERE for details (Foolish e-mail list subscribers have a copy in their box, as well). Interested readers should make a point of reading this document.
by David Gardner
ALEXANDRIA, VA, May 24, 1996 -- OK, the Fool Portfolio got smooshed Friday under the treads of an Iomega tank in reverse. The market, on the other hand, was basically quiet and flat. Today's lucky numbers didn't come up Foolish; we lose the danged lottery.
Indeed, all of our other stocks were pretty much neutral to up, so we're mildly disappointed. But hey, that's what you get when one stock appreciates to such a high percentage of your overall portfolio. And we're quite as willing to take the bad with the good as the next guy, so today, that was the deal. We saw no Iomega flames in any articles anywhere, no bad news, etc. . . we're just chalking this baby up to profit-taking.
Interestingly, the Fool Portfolio's loss of 6.36%---one of its worst days ever---looks very similar to Iomega's loss of $6 5/8. In other words, it appears that every $1 Iomega moves is worth about 1% to our performance. Well, let's see. Close. With 2010 shares of IOMG, every dollar move equates to $2010. With the overall portfolio now valued at $185,762.03, a one-percent move comes to $1857.62. . . so as I said, pretty close.
OK, for the week the Fool Portfolio had a good ol' time. Up 11.45% overall, that whacked the market average returns of 1.44% (the S&P 500) and 0.48% (the NASDAQ). That's even despite Iomega sinking 10 points the last two days of the week.
The Gap lost $3/8 today, dropping it below the 100% mark for the first time in a little while. The stock closes the week at $32 3/8. Gap is apparently having excellent success with its high-margin (i.e. most profitable) apparel, the major reason cited behind last week's excellent earnings report. As you'll recall, Gap announced quarterly earnings up 63%, prompting Alex Brown and Morgan Stanley, respectively, to reiterate a BUY rating and raise the stock to a STRONG BUY (the Morgan Stanley analyst raised her target price to $37). Gap's net profit margin for the quarter rose from 5.9% in the previous year to 7.1% this time round. Increasing margins. . . mm-mm-good.
All that, and we get a seven-and-a-half-cent dividend per share on June 17th. . . whadda bah-gain!
America Online rose a buck Friday, as the market may have finally heeded those of us who were waving white hankies. For the week, AMER still dropped, off $2 1/2 to close bidding $51 1/8. But with the NASDAQ down today, we're happy to see our shares back up. We've watched this company devalued 20 points in two weeks, and on what? On the new 20/$20 pricing plan (or that's what the pundits say). . . 20 hours for 20 bucks. As if many other people besides Motley Fools will use it! (Wink, wink, nudge, nudge.)
Hey, how about General Electric? This Dow heavyweight rose $1/2 to another new all-time high today, sitting flat on $85. With "The Motley Fool Investment Guide" just completed at the time, we bought this stock on August 11th of last year as part of the approach we lay out in the book's first 60 pages. Picked up the shares for $57.91, in fact, and haven't lost any sleep---or even paid much attention---since. That's why we teach the darn approach.
Chevron dropped $1/2 today, and Sears closed unchanged. Both of those stocks are within a few percentage points of their 52-week highs. . . then again, so's the market.
Medicis had a strong week, didn't it? Little tyke was up almost 4 points ($5/8 today), following recognition it received the week before in Investor's Business Daily. Have to figure that brought about some momentum buying. Momentum buying or not, we continue to hold these shares for the same reasons elucidated in our original purchase announcement: simple business plan being beautifully executed, financial strength, a low Fool Ratio, and expected crushing earnings comparisons (recall, please: MDRX reported quarterly earnings of 36 cents vs. 7 cents just one month ago, an increase of 464% on a sales increase of 39%). Medicis is now up 22% for our Foolish portfolio.
KLA Instruments, to round out the Fool Port for the weekend? Unchanged. Boring. Nothing to say. No news at all this week.
I'd like to close this highly eventful and enjoyable week by pointing your attention to something for which you might possibly want to turn on the boob tube. TOMORROW (Saturday), on C-SPAN at 6 PM ET (check your local schedule for any variance), you can watch or tape the one-hour Foolish festivities at the National Press Club on Wednesday. Tom and I both talked for about 25 minutes, then opened up the floor to questions. It went swimmingly, and elaborate market research recently conducted indicates that this IS appropriate for Super-Bowl-like parties. That's right, invite over your friends from work, dial up your neighbors on the cell phone, include (as always!) the in-laws, have 'em ALL over for nachos, Ben & Jerry's, and the Fools at 6 PM. Seriously, they won't go home disappointed. . . in fact, I don't even think they'll go home.
---David Gardner, May 24, 1996
Day Month Year History
FOOL -6.36% 18.45% 98.97% 271.52%
S&P 500 +0.37% 3.72% 10.16% 48.02%
NASDAQ -0.07% 4.81% 18.60% 73.26%
*Scroll down or expand screen for full portfolio accounting
AMER +1...CHV - 5/8 ...GE + 1/2 ...GPS - 3/8 ... IOMG -6 5/8 ...KLAC ---...MDRX + 5/8 ...S ---...
Rec'd # Security In At Now Change
5/17/95 2010 Iomega Cor 2.52 44.50 1666.59%
8/5/94 680 AmOnline 7.27 51.13 602.95%
4/20/95 310 The Gap 16.28 32.38 98.92%
8/5/94 165 Sears 28.93 49.75 72.00%
8/11/95 95 GenElec 57.91 85.00 46.77%
8/11/95 110 Chevron 49.00 61.13 24.75%
1/29/96 250 Medicis Ph 27.86 34.13 22.49%
8/24/95 130 KLA Instrm 44.71 27.25 -39.05%
Rec'd # Security Cost Value Change
5/17/95 2010 Iomega Cor 5063.13 89445.00 $84381.87
8/5/94 680 AmOnline 4945.56 34765.00 $29819.44
4/20/95 310 The Gap 5045.25 10036.25 $4991.00
8/5/94 165 Sears 4772.65 8208.75 $3436.10
8/11/95 95 GenElec 5501.87 8075.00 $2573.13
1/29/96 250 Medicis Ph 6964.99 8531.25 $1566.26
8/11/95 110 Chevron 5389.99 6723.75 $1333.76
8/24/95 130 KLA Instrm 5812.49 3542.50 -$2269.99