Fool Portfolio Report
Wednesday, July 31, 1996
by David Gardner (MotleyFool)
July, she will fly
And give no warning to her flight
-- Simon & Garfunckel, "April"
ALEXANDRIA, VA, July 31, 1996 -- This softly delightful Paul Simon tune drifted through my head here at Fool HQ, upon market close of the last day of July. The context, in this case, regards profits. July's profits did indeed fly away, with the typical sort of warning we get about the market's future movements... that is, of course, no warning at all.
But an up day for every Fool Port stock less Sears made for superior overall returns Wednesday, palatably closing out an otherwise hard-to-stomach month. For July, we posted losses of 24%, taking a big bite (MUNCH!) out of our annual total. Wednesday's strength was pleasing, especially after Tuesday's strength; maybe we're seeing a trend for August. But it wasn't enough to make the month look anything other than despicable.
General Electric showed the day's best dollar gain, up $2 1/4. No news from Fairfield, CT (GE HQ), but we do expect this may have had something to do with the company's positive comments this week about the NBC unit's Olympics ratings. Put that together with a rise of nearly 50 points for the Dow Jones industrial average today and you have a nifty move.
Take a look at GE's graph over the past year and you'll find month after month of nifty moves. It now appears very likely that our annual Dow switch (occurring in mid-August) will banish GE from The Fool Portfolio, but it's been a lovely pas de deux. It'll be even lovelier if the stock can blow through its June high of $88 1/8 before we find another partner.
Chevron did have news today, positive news of the sort we've come to expect from our Foolish Four stocks. CHV raised its dividend 8% today. When the next quarterly payment goes out September 10th (to shareholders of record August 15th), we'll see $0.54 per share on our statements, rather than the $0.50 that we're used to. That makes for an annualized expected dividend of $2.16 per share, which at today's closing price of $57 7/8 makes for a yield of 3.73%.
You may be curious to see how that affects Chevron's positioning in the Dow Dividend Approach. I certainly was. Fortunately, every weekend in our Dow Dividend Approach area's Dow Statistics Center you can access the Current Dow Order, which shows you all 30 Dow stocks organized by dividend yield. Makes our work -- yours too -- pretty darn easy, thanks to MF DowMan. Anyway, a quick reference to this document reveals that before this move, Chevron was the fifth highest dividend-payin' company among the Dow behemoths, yielding 3.46%. The new yield, approximately 25 basis points higher, keeps the company right there in the #5 spot. No biggie.
We expect to retain this monolithic oil services concern during the Fool Portfolio's third year, which will happen unless Chevron rises real quick to over 80 bucks a share. Not bloody likely, though I'm not saying it shouldn't! So get ready for $2.16 in dividends, my fellow Fools.
(The real race for next year's Foolish Four comes down to AT&T vs. Caterpillar, with the current edge for inclusion going to the phone guys.)
It was pleasing indeed to see America Online ride the NASDAQ tide higher Wednesday, catching a $1 wave. Over the summer so far, our AMER stock has been mostly flotsam rolling in the surf. Today's psychologically important close over the key $30 resistance level is HUGE. (Just kidding.)
Otherwise, you have a bunch of uninteresting fractional moves. A good but uninteresting day.
A great opportunity to conclude this ghastly month.
Bring it on, August! Give us your best shot; we're ready for you.
--- David Gardner, July 31, 1996
Day Month Year History FOOL +1.51% -23.59% 22.82% 129.33% S&P 500 +0.74% -4.58% 3.90% 39.61% NASDAQ +0.80% -8.82% 2.70% 50.03% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 16.38 550.07% 8/5/94 680 AmOnline 7.27 30.50 319.37% 4/20/95 310 The Gap 16.28 29.75 82.80% 1/29/96 250 Medicis Ph 27.86 46.50 66.91% 8/11/95 95 GenElec 57.91 82.38 42.24% 8/5/94 165 Sears 28.93 41.00 41.75% 8/11/95 110 Chevron 49.00 57.88 18.11% 8/24/95 130 KLA Instrm 44.71 18.88 -57.78% Rec'd # Security Cost Value Change 5/17/95 2010 Iomega Cor 5063.13 32913.75 $27850.62 8/5/94 680 AmOnline 4945.56 20740.00 $15794.44 1/29/96 250 Medicis Ph 6964.99 11625.00 $4660.01 4/20/95 310 The Gap 5045.25 9222.50 $4177.25 8/11/95 95 GenElec 5501.87 7825.63 $2323.76 8/5/94 165 Sears 4772.65 6765.00 $1992.35 8/11/95 110 Chevron 5389.99 6366.25 $976.26 8/24/95 130 KLA Instrm 5812.49 2453.75 -$3358.74 CASH $16754.13 TOTAL $114666.01 Transmitted: 7/31/96