Fool Portfolio Report
Wednesday, May 28, 1997
by David Gardner (MotleyFool)
and Jeff Fischer (JeffF@fool.com)
...past deadline, following a computer crash.


ALEXANDRIA, VA, (May 28, 1997) -- The Fool Portfolio caught a nice gain of 1.12% today, rising in a flat to down market. We were greatly aided by the continuing advances of both Trois Com and Trois M. 3Com rose $4 3/8; 3M rose $2. Along with a nice move for Iomega, this was enough to make for a very motley day.

Yep, IOMEGA (NYSE: IOM) moved up $3/4 today to close at $18. Nice move, on 3.4 million shares... in fact, the best day for the stock in almost four weeks. And you pore over the news wires and you find nothin'.

But whenever I'm looking for the story behind the story, I go to our Iomega folder, where I found a very interesting post earlier today. Posted by CayugaDan (Dan Rappaport of Cayuga Computers, a reseller), he mentions that the largest computer reseller out there, INGRAM MICRO (NYSE: IM) has just announced the arrival of the ATAPI Zip drive.

What's an ATAPI Zip drive?

Good question. Well, ATAPI is a recent industry standard that makes it possible for the guys who build computers to hook up all sorts of different drives (CD-ROMs, tape drive, and now Zip drives) to the computer through the "controller" attached to the "motherboard." The significance of the ATAPI Zip drive is that anyone building computers today can now attach the Zip directly to the motherboard and make the computer bootable from that Zip. This was well explained in a post later on by NovW, which has been reposted to our Web boards so I could hyperlink directly to it here (it's worth a read for anyone wanting to learn more about this).

What this essentially means is that if you're building computers to sell, you can now skip the $20 expense of including a 3.5" drive and just put in a Zip as the bootable standard. And I think you're going to see this happening with increasing frequency going forward... the trends are obvious, mistakable only by short sellers and perhaps one or two journalists.

Anyway, that's the story behind the story today, and maybe responsible for a little bit of that volume?

Changing gears, hey, is the stock market fickle or what? The former. The stock market is extremely fickle, as anyone who's hung out in Fooldom for even just a few months already well knows. Take the case of 3COM (Nasdaq: COMS), the networking company we bought last August at $46. On the crest of a strong market, Trois Com hit $81 late last year, fell to $24 five weeks ago, and has now recovered to $51 in short order.

The stock rose over $4 today, and has risen $14 in about one week. Today Paul Robinson at Robertson, Stephens & Co. raised it to a BUY, following a reiterated buy yesterday by Paul Weinstein at PaineWebber.

Reasons given include "increasing investor expectations" (meaning "the stock has already gone up so it should probably go up further"), and the company "can withstand competitive pressure from Intel" (meaning "3Com, the second largest networker in the world, won't go out of business due to competition in one small sector of networking: cheap adapter cards"). Given that the whole spin against 3Com a couple months ago was that Intel was about to put it out of business, it's funny to see the story suddenly rewritten.

Weinstein estimates $0.47 for the fourth quarter (6/97), vs. $0.48 last year. Last year is a tough comparison, being a killer quarter in the company's history. $0.48 is the consensus for the quarter, which will be announced around June 25th.

This year many analysts downgraded the stock from $48 or so, down to $34. More than a few (very small firms, typically) upgraded the stock around $35. They had it right. Our Fool message boards had their own share of vocal bulls on the stock around the $35 level, too. It makes for interesting reading.

On March 16, 1997, WILSTER007 wrote in our 3Com folder: "Well good luck. I am quite bullish on this one, it's just simply way too cheap here ($34) and people will be buying. Give it a month or two and let's see where this one is trading."

The folder had its share of doom and gloom folks, too. Not to brag outright or excessively, but we here have been positive on the long-term outlook for networking during the entire slide, at times surely looking foolish (small f). We're still positive on this dynamic sector for the long-term.

ATC COMMUNICATIONS (Nasdaq: ATCT) rose 1/32 today. That 1/32 rise represents a 0.81% gain. Not bad. (If you can't make fun of your investing mistakes, you're less likely to learn. And you're not being Foolish!) The bid didn't change, unfortunately.

We're hoping our company can crank out some better numbers going forward, as the company has "changed the oil and tightened the timing belt" of its business model, according to the CEO.

The muffler has been changed, too. They put on a louder one. We hear a bit more from the company now, in press releases. Though not for a while.

Come on, ATCT! Put out another one!

AMERICA ONLINE (NYSE: AOL) fell a bit today, after an ambitious rise over the past few months. The service won PC World's "World Class Award for best Online Service" for the second consecutive year.

You know your company is doing something right if half the country can't get online with it for a period of time, a few major cities sue it, and virtually every journalist around slams it, yet it still remains the most popular online service in the country, and wins for being the best online service in the world, again, for the second consecutive year.

All that, and the dang thing drops $7/8. OK, enough for now. Fool on.

--- David Gardner, May 28, 1997

Evening News
Fool Four
Boring Portfolio
Daily Double
Daily Trouble


TODAY'S NUMBERS
Stock Change Bid -------------------- AOL - 7/8 54.63 T - 1/4 37.00 ATCT --- 3.88 CHV - 1/8 70.13 DJT - 1/8 10.00 GM - 1/4 57.75 IOM + 3/4 18.00 KLAC -1 3/4 49.75 LU - 1/4 64.00 MMM +2 93.00 COMS +4 3/8 51.00
Day Month Year History FOOL +1.12% 8.34% 3.83% 177.12% S&P: -0.29% 5.72% 14.37% 84.82% NASDAQ: +0.07% 11.85% 9.23% 95.81% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 54.63 651.38% 5/17/95 980 Iomega Cor 2.52 18.00 614.29% 8/12/96 110 Minn M&M 65.68 93.00 41.60% 8/11/95 125 Chevron 50.28 70.13 39.46% 10/1/96 42 LucentTech 47.62 64.00 34.41% 8/24/95 130 KLA Tencor 44.71 49.75 11.27% 8/12/96 280 Gen'l Moto 51.97 57.75 11.12% 8/13/96 250 3Com Corp. 46.86 51.00 8.83% 8/12/96 130 AT&T 39.58 37.00 -6.51% 4/30/97 -1170 *Trump* 8.47 10.00 -18.08% 10/22/96 600 ATC Comm. 22.94 3.88 -83.11% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 19391.88 $16810.01 5/17/95 980 Iomega Cor 2594.53 17640.00 $15045.47 8/12/96 110 Minn M&M 7224.44 10230.00 $3005.56 8/11/95 125 Chevron 6285.61 8765.63 $2480.02 8/12/96 280 Gen'l Moto 14552.49 16170.00 $1617.51 8/13/96 250 3Com Corp. 11714.99 12750.00 $1035.01 10/1/96 42 LucentTech 1999.88 2688.00 $688.12 8/24/95 130 KLA Tencor 5812.49 6467.50 $655.01 8/12/96 130 AT&T 5145.11 4810.00 -$335.11 4/30/97 -1170*Trump* -9908.50 -11700.00 -$1791.50 10/22/96 600 ATC Comm. 13761.50 2325.00-$11436.50 CASH $49020.02 TOTAL $138558.02