Fool Portfolio Report
Tuesday, January 21, 1997
by Jeff Fischer (MF BudFox)
ALEXANDRIA, VA, January 21, 1997-- Looking at the overall trend, the past one hundred years have been miserable for stock market bears and shorts. Today was more of the same.
S&P 500: up 0.78% today, up 5.67% this year. Nasdaq: up 0.93% today, up 6.66% this year.
Already this year -- in three weeks -- stocks are conquering the annual returns most bank CDs offer, threatening to surpass the annual yield offered by popular bonds, and walloping the typical savings account return three-times over. Investing in stocks is risky for short-termers, yes, but *not* investing in the market is a whole different kind of risk for people looking decades ahead.
The Fool's performance today would make Michael Jordan proud. A 3-pointer. Eyes closed. Behind the back. One-handed. Full-court. Nothing but net. The market is the New York Knicks, and we're beating them.
Fool: up 2.50% today. Another $3,500 added to the Foolish savings account today.
All eleven of our stocks were up at one point today. Giving the market a boost, Greenspan offered a positive report on the economy and didn't deliver any further warnings about an "over-exuberant stock market." He did voice concern about the future of Social Security, though. Demographics, good Fool.
This morning, two AT&T off-spring announced earnings. The results of both NCR and Lucent Tech impressed investors, and NCR rose a hefty $3 1/8, up 9%. The Fool owns eight shares of NCR, a gift from AT&T, so this translates to a huge $25 cash gain today. Hey. Better than a loss. Buys 29 Taco Bell burritos.
NCR CORP. (NYSE: NCR) reported positive earnings, which is a beautiful thing considering the agony the company has experienced in the past. For the final quarter of 1996, NCR earned $0.07 per share ($7 million), compared to a loss of $3.01 per share in the same quarter last year ($305 million lost). But note, a bonus: the company also incurred restructuring-related costs last quarter, and excluding those earnings would have totalled $0.27 per share ($27 million). Good news. Revenue in the quarter was $2 billion, a 10% decline from last year. The decline was mainly attributed to the discontinuation of PC sales and entry-level servers. NCR highlighted that this is the third consecutive quarter in which the company generated an operating profit.
In the Fool's Lunchtime News, Randy (MF Templar) applies good reason to how NCR's stock, with only 101 million shares outstanding, may look quite interesting to investors. Meanwhile, the company stated that it has made progress cutting expenses and boosting gross margins, and is now focused on increasing revenues and further increasing margins. For 1996, the company lost $1.07 per share ($109 million), which is great compared to 1995, when it lost a massive $22.49 per share ($2.28 billion). The one analyst currently following NCR estimates $0.77 will be earned this year. Full press releases are available on NCR's Web site.
At the same time, "half-brother" spin-off LUCENT TECHNOLOGIES (NYSE: LU) reported earnings of $1.35 per share ($859 million) for its first quarter of fiscal 1997, compared to a billion dollar loss in the same quarter of last year. (Was there a trend with these companies when under AT&T's command? Lose over a billion dollars or you're an odd-ball?) Lucent earned $7.9 billion in revenues last quarter, setting a new company record. Lucent's CEO -- the big enchilada -- Mr. Schacht -- said this record quarter "starts our 1997 fiscal year off with tremendous momentum."
For 1996's calendar year, sales totalled nearly $24 billion, up 11% from 1995, and up 14% on continuing operations. Net income for the same period was $1.08 billion, compared to a loss of $867 million in 1995. In the last quarter, sales were strongest in network operators -- especially in the area of wireless equipment. Detailed press releases are available on Lucent's Web site. The company is expected to earn $2.03 per share this year, ending September, and trades at 26 times that forward estimate.
Elsewhere in Fooldom, 3COM (Nasdaq: COMS) rose $1 1/2. Also, GENERAL MOTORS (NYSE: GM) jumped to a new high as sales in Latin America set a record for the sixth straight year. By the way, have you seen the new Corvette yet? Looks pretty sleek. Sweet car, that Corvette. Yup. Nice looking car, the Corvette. I could mention the Corvette every week if GM would just send me a free one. Or, on second thought, that new Porsche Boxster looks pretty nice, too. A couple Porsches would look great sitting outside Fool HQ. Germany, are you reading this? Of course, there's a lot to be said for bicycles, too.
Finally, searching the entire content of the World Wide Web for anything on ATC COMMUNICATIONS (Nasdaq: ATCT), I found that Mr. Richard Schmidt of Stellar Asset Management recently chose ATCT as his one stock to outperform the market in 1997 -- when forced to choose only one stock for the year. Reasons for the pick weren't given (not Foolish of the publication), and I haven't found the track record of the firm, but Mr. Schmidt cast his vote for ATC Comm. Maybe he's a Fool in a Wise man's suit. There are plenty of them out there, aching to be free.
Stock Change Bid -------------------- AOL - 1/2 39.75 T +1 1/8 39.38 ATCT + 1/8 12.38 CHV + 3/8 67.63 GM +1 1/4 62.00 IOM +1 3/8 18.63 KLAC + 1/8 43.00 LU + 5/8 53.63 MMM + 1/8 85.00 NCR +3 1/8 38.75 COMS +1 1/2 74.75 Day Month Year History FOOL +2.50% 7.62% 7.62% 187.23% S&P 500 +0.78% 5.67% 5.67% 70.76% NASDAQ: +0.93% 6.66% 6.66% 91.20% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 18.63 639.39% 8/5/94 680 AmOnline 7.27 39.75 446.55% 8/13/96 250 3Com Corp. 46.86 74.75 59.52% 8/11/95 125 Chevron 50.28 67.63 34.48% 8/12/96 110 Minn M&M 65.68 85.00 29.42% 8/12/96 280 Gen'l Moto 51.97 62.00 19.29% 1/2/97 8 NCR 33.63 38.75 15.24% 10/1/96 42 LucentTech 47.62 53.63 12.62% 8/12/96 130 AT&T 39.58 39.38 -0.51% 8/24/95 130 KLA Instrm 44.71 43.00 -3.83% 10/22/96 600 ATC Comm. 22.94 12.38 -46.05% Rec'd # Security In At Value Change 5/17/95 2010 Iomega Cor 5063.13 37436.25 $32373.12 8/5/94 680 AmOnline 4945.56 27030.00 $22084.44 8/13/96 250 3Com Corp. 11714.99 18687.50 $6972.51 8/12/96 280 Gen'l Moto 14552.49 17360.00 $2807.51 8/11/95 125 Chevron 6285.61 8453.13 $2167.52 8/12/96 110 Minn M&M 7224.44 9350.00 $2125.56 10/1/96 42 LucentTech 1999.88 2252.25 $252.37 1/2/97 8 NCR 269.00 310.00 $41.00 8/12/96 130 AT&T 5145.11 5118.75 -$26.36 8/24/95 130 KLA Instrm 5812.49 5590.00 -$222.49 10/22/96 600 ATC Comm. 13761.50 7425.00 -$6336.50 CASH $4600.04 TOTAL $143612.92 Transmitted: 1/21/97