Fool Portfolio Report
Monday, June 2, 1997
by David Gardner (MotleyFool)
ALEXANDRIA, VA, (June 2, 1997) -- Whenever we hit a new summer month, that old Simon & Garfunkel song passes through my head again. I think the title was "April Come She Will."
"June, she'll change her tune," the lyrics run. Except the way that Art Garfunkel leads in is more like this: "Joooooooooo-oo-oo-une." That's exactly the way I'm leading in today -- with a flourish -- following a rollicking good day on the markets for the Fool Portfolio.
In a mixed market (S&P 500 slightly down, Nasdaq slightly up), the Foolfolio shot ahead 2.61% Monday, leading off the first trading day of the summer months with a memorable performance. The day included a slew of Iomega press releases, an AOL homerun ball deep over the fence in right, a rebound in ATC, and a coupla snake eyes from The Donald.
The largest dollar move today came from AMERICA ONLINE (NYSE: AOL), which rose $3 1/2 to a new 52-week high of $58 5/8, on two million shares traded. Its previous high had been $55 1/2, meaning the stock closed more than three points above that. AOL had no news today, but MSN -- probably its most formidable competition with 2.3 million subscribers -- did. Well, it wasn't exactly news, but an article by Leslie Helm in today's L.A.-Times entitled "Microsoft May Drop Internet Access Business" raised some key questions about Microsoft's willingness and ability to continue to compete head-to-head in the online service wars.
Essentially, Microsoft has had problems both with the reliability of its service and with billing, enough so that it's thinking of transitioning MSN into "a content package for other [Internet service providers]." This article was probably the primary driving force sending AOL up a couple of bucks in the afternoon. That carried through into a gain of $3 5/8 by day's end.
"It's no surprise AOL continues to soar," opined one of our long-time savvy readers YodaBeavis, in our AOL folder on America Online. "For anyone looking to invest in an online provider, it's the only one whose future is at all clear." AOL's tight grip on the future of digital publishing and communication continues to get tighter. That's not to say that we're moving toward an "AOL only" world. But it is to say that this company and stock figure to be long-term features of the Internet landscape. Now within a 20% of its all-time high, AOL stock is on fire. The stock's relative strength was 92 as of Friday; we're figuring it'll look even better in Investor's Business Daily tomorrow.
IOMEGA (NYSE:IOM) rose $1 3/8 today, to $18 3/4. Do a news search with "Iomega" as your string and you'll find half a dozen press releases out today. These included a number of new OEM announcements, from Sony, Micron, and NEC. Each was revealing newer, faster computers (MMX) with the Zip drive standard in them. Iomega announced further that it had shipped its six millionth Zip drive: "With more than six million Zip drives shipped worldwide since March 1995, the Zip drive's ramp rate is among one of the fastest growing consumer electronics products in history."
At a certain point, the market is going to agree with us that Zip is the next standard that replaces the floppy. This now seems obvious to anyone who (a) uses one of the things, and/or (b) has followed our online discussion and analysis for the last few months or years. Given that Zip becomes the standard, Iomega is in excellent position to profit off its higher-margin proprietary disks. With manufacturing partners in place, and distribution increasingly assured, I think I'm going to like being a shareholder of this company as much in future as I have in the past. Well done, Io.
Also helping the Fool Port ahead today was a characteristic downtick in shares of Trump Hotels & Casino Resorts, sliding to $9 5/8, along with an uncharacteristic rise in shares of ATC Communications. ATCT closed on a last trade up $1 to $5... a huge move of 25% on above average volume. Look at the numbers accompanying this report and you'll see we represent it at $4 29/32. That's in keeping with our self-developed conservative publishing standard of showing our Nasdaq stocks at the bid... a good habit to get into if you're an individual investor who quotes his stocks on a regular basis.
ATC still looks to me like a beaten-down stock, with better prospects than the market is giving it, and a now experienced management capable of meeting those prospects.
Overall, we have a very good feeling about our portfolio's prospects this summer. With 27% of our money in cash, ready to go into the market long or short -- since this is The Fool, probably both -- we look forward to sharing an entertaining, educational, and market-beating summer with you our cherished reader. Thanks for the click-in, and we'll see you tomorrow. Fool on!
--- David Gardner, June 2, 1997
Boards -- what are Fools saying?
Evening News: Presstek back in the news?
Daily Double -- How can you find the next double?
Daily Trouble -- Is there value in this beaten down stock?
Boring Portfolio -- Cisco, Oracle and more.
Fool Four -- These giants are... monstrous.
Stock Change Bid -------------------- AOL +3 1/2 58.63 T -1 1/8 35.63 ATCT + 29/32 4.91 CHV --- 70.13 DJT - 1/8 9.63 GM + 7/8 57.00 IOM +1 3/8 18.75 KLAC + 9/16 48.06 LU + 1/2 64.13 MMM -1 90.88 COMS + 13/16 49.06Day Month Year History FOOL +2.61% 2.61% 5.25% 180.90% S&P: -0.23% -0.23% 14.26% 84.63% NASDAQ: +0.32% 0.32% 8.81% 95.06% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 58.63 706.40% 5/17/95 980 Iomega Cor 2.52 18.75 644.05% 8/11/95 125 Chevron 50.28 70.13 39.46% 8/12/96 110 Minn M&M 65.68 90.88 38.37% 10/1/96 42 LucentTech 47.62 64.13 34.67% 8/12/96 280 Gen'l Moto 51.97 57.00 9.67% 8/24/95 130 KLA Tencor 44.71 48.06 7.49% 8/13/96 250 3Com Corp. 46.86 49.06 4.70% 8/12/96 130 AT&T 39.58 35.63 -9.99% 4/30/97 -1170 *Trump* 8.47 9.63 -13.65% 10/22/96 600 ATC Comm. 22.94 4.91 -78.61% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 20811.88 $18230.01 5/17/95 980 Iomega Cor 2594.53 18375.00 $15780.47 8/12/96 110 Minn M&M 7224.44 9996.25 $2771.81 8/11/95 125 Chevron 6285.61 8765.63 $2480.02 8/12/96 280 Gen'l Moto 14552.49 15960.00 $1407.51 10/1/96 42 LucentTech 1999.88 2693.25 $693.37 8/13/96 250 3Com Corp. 11714.99 12265.63 $550.64 8/24/95 130 KLA Tencor 5812.49 6248.13 $435.64 8/12/96 130 AT&T 5145.11 4631.25 -$513.86 4/30/97 -1170*Trump* -9908.50 -11261.25 -$1352.75 10/22/96 600 ATC Comm. 13761.50 2943.75-$10817.75 CASH $49020.02 TOTAL $140449.52