Fool Portfolio Report
Tuesday, July 1, 1997
Jeff Fischer (TMF
Jeff)
ALEXANDRIA, VA, (July 1, 1997) -- Mirroring the rising heat of summer, the Fool Portfolio moved higher to begin July. The Fool's collection of twelve stocks gained 1.87%, while the S&P gained 0.66% and the Nasdaq Composite fell 0.27%.
The Fool performed so well because America Online announced a hostile take-over of semiconductor equipment manufacturer, KLA-Tencor. Targeting America Online's family demographics, the combined company will sell semiconductor wafer processing technology to the general online public, heavily promoting the usefulness of KLA's machinery to AOL members frequenting chat rooms.
...What's that?...
...It was just a rumor?
Oh.
Many rumors floating around today. Like lame, failed jokes.
Rumors may have actually had a voice behind AMERICA ONLINE's (NYSE: AOL) four dollar rise.
In reality -- rumors aside -- the company announced an agreement with CBS SportsLine. The online partnership will make SportsLine the "headline show" on the AOL Sports Channel.
It's interesting -- and good -- to see AOL teaming up with CBS, when in the recent past the majority of AOL's television-related business has been with ABC, as well as with MTV. Though perhaps the CBS deal dilutes any possibility that there might be of Disney/ABC buying America Online. AOL may be too young to marry, anyway. If you were Steve Case and you had been building your online dream since the 1980s, would you want to sell it now when growth is finally exploding?
KLA-TENCOR (Nasdaq: KLAC) rose $3 3/8 on no news. Yesterday's Investor's Business Daily ran an article about the company's Chief Executive Officer, but that didn't influence today's price. Chalk it up to typical volatility. The stock has a higher beta (more volatile) than America Online and is nearly as volatile as Iomega.
KLA-Tencor is only one dollar below a new 52-week high, so tomorrow -- if it hits that new high -- a bunch of traders' pockets will start buzzing. They'll pull out their quote machines, grab their cell phones, and simultaneously pile into the stock -- hoping to ride it higher. (It takes all kinds to make the market. Some make the market a full-time job, while Fools invest in the long-term fundamentals.)
3COM (Nasdaq: COMS) fell after announcing price cuts of up to 36% on its 10Mbps Ethernet cards. The networking leader made the move in hopes of increasing its dominance in the fast growing Ethernet market. 3Com already leads the industry by a handsome margin, and when the company last cut prices in February it did in fact grow market-share even further over the following quarter.
Meanwhile, as 3Com's sequential revenue growth is only going to be in the single digits anyway, the price cuts shouldn't have much negative impact on the quarter, if any. Also, price cuts didn't hurt gross margins in the latest quarter. All said, the stock probably didn't need to fall on the news.
That's all da boring news for today as we get ready to enter the July earnings season. Tomorrow in this space we'll look at the Fool's Eight Point Checklist for finding small- and mid-cap stocks (and we'll consider INNOVEX (Nasdaq: INVX) in this regard), and Thursday we'll aim to look at a few of the stocks that we've considered in the recent past.
In light of the hard to believe rumors floating around Wall Street today, I'll leave you with some hard to believe -- but true -- statements from the past. Thanks much to my friend and Fool "LuckyBarb" for sending these along. Enjoy, and Fool on!
TRUE STATEMENTS: SO WHERE IS
JOHNNY CARSON
WHEN YOU NEED HIM?
"There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977.
"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." -- Western Union internal memo, 1876.
"Stocks have reached what looks like a permanently high plateau." -- Irving Fisher, Professor of Economics, Yale University, 1929.
"Drill for oil? You mean drill into the ground to try and find oil? You're crazy." -- Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in 1859.
"I think there is a world market for maybe five computers." --Thomas Watson, chairman of IBM, 1943.
"640K ought to be enough for anybody." -- Bill Gates, 1981.
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Stock Change Bid ---------------- AOL +315/16 59.56 T +1 5/16 36.38 ATCT + 1/4 4.94 CHV +1 1/2 75.44 DJT - 1/16 10.69 GM + 5/8 56.38 INVX - 1/2 28.38 IOM + 7/16 20.31 KLAC +3 3/8 52.13 LU +2 74.06 MMM -1 1/2 100.75 COMS - 9/16 44.38Day Month Year History FOOL +1.87% 1.87% 7.44% 186.73% S&P: +0.66% 0.66% 20.29% 94.38% NASDAQ: -0.27% -0.27% 11.40% 99.71% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 59.56 719.29% 5/17/95 980 Iomega Cor 2.52 20.31 706.05% 10/1/96 42 LucentTech 47.62 74.06 55.54% 8/12/96 110 Minn M&M 65.68 100.75 53.40% 8/11/95 125 Chevron 50.28 75.44 50.02% 8/24/95 130 KLA Tencor 44.71 52.13 16.58% 8/12/96 280 Gen'l Moto 51.97 56.38 8.47% 6/26/97 325 Innovex 27.71 28.38 2.40% 8/13/96 250 3Com Corp. 46.86 44.38 -5.30% 8/12/96 130 AT&T 39.58 36.38 -8.09% 4/30/97 -1170 *Trump* 8.47 10.69 -26.20% 10/22/96 600 ATC Comm. 22.94 4.94 -78.47% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 21144.69 $18562.82 5/17/95 980 Iomega Cor 2594.53 19906.25 $17311.72 8/12/96 110 Minn M&M 7224.44 11082.50 $3858.06 8/11/95 125 Chevron 6285.61 9429.69 $3144.08 8/12/96 280 Gen'l Moto 14552.49 15785.00 $1232.51 10/1/96 42 LucentTech 1999.88 3110.63 $1110.75 8/24/95 130 KLA Tencor 5812.49 6776.25 $963.76 6/26/97 325 Innovex 9005.62 9221.88 $216.25 8/12/96 130 AT&T 5145.11 4728.75 -$416.36 8/13/96 250 3Com Corp. 11714.99 11093.75 -$621.24 4/30/97 -1170*Trump* -9908.50 -12504.38 -$2595.88 10/22/96 600 ATC Comm. 13761.50 2962.50-$10799.00 CASH $40625.59 TOTAL $143363.09
