(FOOL GLOBAL WIRE -- Thursday, January 8, 1998)
by Paul Larson (TMFParlay@Fool.com)
CHICAGO, IL (Jan. 8, 1998) -- Dave and Tom will be busy shaking hands, kissing babies and signing books across the country these next two weeks. Consequently, you can expect a Motley group of writers from TeamFool filling in their absence here over the next dozen or so trading days. On days like today where the portfolio gets thwacked, hitting the pavement certainly sounds like more fun than reporting on the carnage.
Actually, I wouldn't expect to see Tom here very often in the future since he will be devoting more and more of his time towards his special slant of picking growth stocks -- The Cash King portfolio. What the heck is a Cash King? What stocks will comprise the new portfolio? Click the previous link for those answers, and then some.
Let me get back to the book tour. If you haven't met Dave and Tom already, I highly suggest stopping by your local bookstore if it is even remotely convenient. It was a little under two years ago when I first met the brothers Gardner on a very similar tour for their first book -- The Motley Fool Investment Guide. I wasn't much of anything to Da Fool back then, just your Joe-average reader. I fondly remember the evening to be quite educational and entertaining. But most importantly, I enjoyed putting a face and a voice to some of the electronic names that I had been interacting with over the previous few months.
The next stop on the book tour will be Monday in Detroit. Specifically, it will be at the Borders in suburban Birmingham at 7 PM. Then on Tuesday evening the tour moves onto the Windy (and today, quite snowy) City, where yours truly will be there gabbing about personal finance and investing with Dave and Tom, too. I'll even put my John Hancock on a copy of Industry Focus '98, if someone is loony enough to ask.
Speaking of Industry Focus, let me just get all of my scheduled plugs out of the way right now. Tonight on AOL there will be a special online chat about the year ahead hosted by some of the diligent TeamFool researchers who put the special report together. So if you are not busy at 10 Eastern this evening and feel like chatting about our favorite stock ideas for 1998, stop on by.
Phew! Glad all of those plugs are over with. Let's now turn an eye towards what you, dear reader, probably clicked in for -- news about the stocks in the portfolio.
We've got two new positions that were taken today. First, let's talk about Spiderman. No, not the web-spinning superhero, but the shares of the S&P Depositary Receipts (AMEX: SPY) which we plunked down some of our extra cash for today. We bought 425 shares at $95 3/4 today. These shares should, in theory, trade at one tenth what the S&P 500 index does.
Our other new position is computer gaming company 3Dfx Interactive (Nasdaq: TDFX). The stock has moved quite heavily against the portfolio since the initial buy report was announced on Monday. The stock has gained 23% in-between when we announced the buy and our "in" price of $25 5/8. Can you say like Homer Simpson, "Doh!!!"
Chevron (NYSE: CHV) got some of its market cap burned away today when the stock lost $2 7/8 on fears of even lower oil prices. Good news for those of us, like myself, driving gas-guzzling V8's from General Motors (NYSE: GM) (down today $2 3/16); bad news for the oil companies. I don't claim to have the first clue where oil prices are headed in the year ahead, and let me suggest that not many others (if any) do either. Either way, the portfolio will be holding Chevron for at least another month or so until the Foolish Four stocks are shuffled around.
Not all of our Dow doggies did poorly today. Ma Bell (NYSE: T) was in the news today and rung up a nice $2 5/8 gain. It is widely rumored that AT&T will be getting serious about entering the local phone market by merging with Teleport Communications (Nasdaq: TGCI). For those interested in reading more about this deal, make sure to check out today's lunchtime news. (Guess I wasn't quite done with all the plugs after all!)
Both Iomega (NYSE: IOM) and Innovex (Nasdaq: INVX) continued their recent weakness by today falling another $1/2 and $1 1/16 respectively. An earnings warning yesterday evening by the leading company in the disk-drive industry, Seagate (NYSE: SEG), probably had some collateral damage to these two storage-technology companies in the portfolio. Well, at least that's what this Fool is guessing.
Trump (NYSE: DJT) continued its recent run and rose another $7/16 after the company announced today that it was continuing and expanding its share buyback this year. By using its cash to buy its stock instead of paying down its mountain of debt, the company is piling on yet more leverage. If the company can turn profitable in the future, the share buyback will definitely increase Trump's EPS. While the buyback indicates the company thinks its stock is undervalued, the added leverage could also exacerbate any potential liquidity crunches in the future. The current mean analyst estimate shows that the company is expected to lose $1.08 per share in 1998, but that loss per share expected could widen if there are fewer shares with which to spread the loss over. Debt and leverage can cut both ways.
Well, that's about all the news fit to print in the portfolio today. Hope to see many of you at tonight's chat, as well as next Tuesday. Take care, Fools.
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Day Month Year History FOOL -2.31% -3.51% -3.51% 223.83% S&P: -0.83% -1.48% -1.48% 108.56% NASDAQ: -0.39% -0.94% -0.94% 115.99% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 89.19 1126.30% 5/17/95 1960 Iomega Cor 1.28 12.38 866.49% 10/1/96 42 LucentTech 47.62 78.69 65.25% 8/12/96 130 AT&T 39.58 62.75 58.55% 8/11/95 125 Chevron 50.28 73.38 45.92% 9/9/97 290 Amazon.com 38.22 55.38 44.88% 8/12/96 110 Minn M&M 65.68 83.31 26.85% 4/30/97 -1170 *Trump* 8.47 7.44 12.18% 8/12/96 280 Gen'l Moto 51.97 57.13 9.91% 1/8/98 115 S&P Depos. 95.91 95.50 -0.42% 1/8/98 425 3Dfx 25.67 24.75 -3.57% 12/19/97 17 Raytheon 53.21 47.94 -9.91% 8/24/95 130 KLA-Tencor 44.71 36.50 -18.37% 6/26/97 325 Innovex 27.71 21.06 -23.99% 8/13/96 250 3Com Corp. 46.86 32.81 -29.98% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 31661.56 $29079.69 5/17/95 1960 Iomega Cor 2509.60 24255.00 $21745.40 9/9/97 290 Amazon.com 11084.24 16058.75 $4974.51 8/12/96 130 AT&T 5145.11 8157.50 $3012.39 8/11/95 125 Chevron 6285.61 9171.88 $2886.27 8/12/96 110 Minn M&M 7224.44 9164.38 $1939.94 8/12/96 280 Gen'l Moto 14552.49 15995.00 $1442.51 10/1/96 42 LucentTech 1999.88 3304.88 $1305.00 4/30/97 -1170*Trump* -9908.50 -8701.88 $1206.63 1/8/98 115 S&P Depos. 11029.25 10982.50 -$46.75 12/19/97 17 Raytheon 904.57 814.94 -$89.63 1/8/98 425 3Dfx 10908.63 10518.75 -$389.88 8/24/95 130 KLA-Tencor 5812.49 4745.00 -$1067.49 6/26/97 325 Innovex 9005.62 6845.31 -$2160.31 8/13/96 250 3Com Corp. 11715.99 8203.13 -$3512.87 CASH $10740.46 TOTAL $161917.14