Boring Portfolio Report
Monday, August 12, 1996

by Greg Markus (MF Boring)

ANN ARBOR, MI (August 12) -- A late afternoon rally pushed the Dow Jones Industrial Average up 24 points to close above the 5700 mark. The S&P 500 Index managed a bit more than a half-percent gain, while the Nasdaq ended the day one point higher than it began (+0.09%).

In contrast, the Boring Portfolio started the week with a loss, as four of its holdings fell and four advanced. Let's take the losers first.

Borders Group slipped a quarter-point. Borders posts its quarterly earnings this coming Thursday, August 15, after the market close, and I expect to be covering it. Prime Medical Services and Texas Industries each fell $ 5/8 on light volume and no news.

Oxford Health Plans was the other Borefolio issue that lost ground today, off $1 5/8. This occurred despite CS First Boston's initiation of coverage of OXHP with a "buy" and designating it a "featured stock." Last week, Standard & Poor's raised its rating on OXHP from three-stars to five-stars, due to Oxford's pricing decisions, cost control, and growing enrollments.

On the winning side, Cisco Systems managed an eighth-point gain. Cisco will also be reporting earnings on Thursday after the market closes.

In a press release this morning, Pacific Bell and Cisco announced they will jointly develop and sell computer communications packages tailored to small- and medium-sized businesses and telecommuters. Together, "the two companies will provide one-stop shopping where customers can get all their digital communications needs taken care of," according to the press release.

The package will include the Cisco 760 series routers, which offer two analog telephone interfaces that permit standard telephones, fax machines, and modems to share an ISDN line. The products can connect each ISDN B channel with two different sites simultaneously and are the first in their class to support supplemental telephone services such as call-waiting, call-hold, and call-retrieve. The press release notes that more than 95% of Pac Bell's service area is now equipped to provide ISDN.

Shaw Group, which advanced $ 1/8, also had news today. Shaw has entered into an agreement to acquire NAPTech, Inc. of Clearfield, Utah.

Like Shaw Group, NAPTech is a fabricator of industrial piping systems and engineered piping modules using induction pipe-bending technology. NAPTech's operation, which occupies a 335,000 square foot facility, has three induction pipe bending machines, more than any other facility in North America.

According to the press release, NAPTech's current backlog is approximately $39 million and consists mostly of projects for the mining industry segment. The company's sales for its FY that ended in March 1996 were approximately $24 million (as compared with Shaw Group's sales of just under $200 million for its trailing four quarters).

In connection with the transaction, Shaw Group will issue up to 432,783 SHAW shares to NAPTech's current shareholders. In addition, the company "expects to issue 127,000 shares of common stock to a related entity of NAPTech in exchange for the 335,000 square foot facility."

The idea behind the acquisition is pretty straightforward: integrating NAPTech into Shaw's operations will further strengthen Shaw's position as a worldwide leader in induction pipe bending, which offers time, labor and material savings over conventional pipe-fitting techniques.

Closing out today's Borefolio winners, Green Tree Financial grew another fifty-cent's worth and the Spiders also fattened up a bit.

I close by noting that the Borefolio will greet a new holding sometime this week: Carlisle Companies, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CSL)") else Response.Write("(NYSE: CSL)") end if %>.

Carlisle is the essence of Boringness. With corporate offices in Syracuse, NY, and facilities throughout the U.S. and internationally, the company manufactures and distributes a broad range of rubber, plastic, and metal industrial products that includes everything from roofing materials to low-bed transport trailers to golf cart wheels to plastic food utensils.

Moreover, it does all this highly profitably and with an eye on quality. Under Chairman and CEO Stephen Munn, the company has focused on achieving continuous improvement in value to shareholders through smart acquisitions and increasing international sales.

Analysts are expecting the company to make EPS of $3.52 in 1996, which would constitute a 25% gain over last year's $2.82. At its current price of approximately $52, CSL is trading at a bit less than 15-times projected 1996 EPS of $3.52. The stock also pays a quarterly dividend (just hiked), that works out to around 1.9% on an annual basis.

Value Line recently upgraded the stock to a "1" on Timeliness and "2" on Safety. Value Line also awards Carlisle an "A" for financial strength. Investor's Business Daily scores CSL 92 on EPS, 75 on Relative Strength, and "B" on Accumulation/Distribution.

I invite you to get the full scoop on Carlisle in the Carlisle transaction report, located elsewhere in the Boring Portfolio section of The Motley Fool.

(c) Copyright 1996, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.

Transmitted: 8/12/96