The Motley Fool: The Boring Portfolio

ANN ARBOR, Mich. (September 4) -- Major market averages barely budged today on relatively light trading volume of 353 million shares on the NYSE. Traders are nervously awaiting Friday's monthly nonfarm payrolls and unemployment rate numbers. As you undoubtedly recall, those are the reports that have thrown the markets into (temporary) tizzies a number of times this year.

As for the Boring Portfolio, it snapped a string of losing days, appreciating $437.50, or 0.82%, in net value. Six Boring holdings advanced, while two slipped fractionally and one (Prime Medical) held fast.

The big winner of the day was Oxford Health Plans, which pretty much erased yesterday's loss. Reuters reported that after a Piper Jaffray conference earlier today, CEO Stephen Wiggins said that "We're expecting EPS growth for next year in the... 50 percent range." The story continues: "He said he was comfortable with analysts' estimates for 1996 earnings at $1.22 a share and 1997 earnings at $1.75."

That's above the (already impressive) consensus projections currently listed in First Call, which are $1.20 and $1.67. Based on Wiggins's forecast, what we have in OXHP is a stock with EPS projected to grow 45-50% and trading at around 26 times the coming calendar year's earnings. Not bad.

Speaking of not bad, Cisco tacked on $ 5/8 today, adding to Tuesday's $1 gain on the news of its acquisition of Granite Systems. As noted here yesterday, Cisco is getting Granite's gigabit ethernet switching technology as part of the deal. It is also getting some hot talent, including Andy Bechtolsheim, co-founder of both Granite and, a few years back, an outfit that goes by the name of Sun Microsystems.

A while back, I pointed to Prime Medical Systems as an example of a fine company that is dealing with the challenge presented by an undervalued stock -- a case of what George Soros calls "reflexivity." As a Wall Street Journal story today implies, Cisco presents an example from the other end of the continuum: the 800-lb. gorilla's stock is such a rich currency, that it enables Cisco to make deals left and right to fill its product gaps -- thereby further enhancing the value of the company.

Speaking of PMSI, the new First Call numbers are available on AOL, and they reveal two favorable pieces of news. First, the number of analysts following the stock has increased to six. Second, one analyst raised his FY96 EPS forecast, so that the consensus number now stands at $0.65, versus last week's $0.60.

I end tonight's Borefolio recap with two quick notes. First, I just got off the phone with Carlisle Company. They are aware of the recent softness in the share price, but do not regard it as anything significant. There has been no change in the business, no analyst revisions, no nothing. My own opinion is that a few traders may have hopped on the Borefolio bandwagon when I announced the addition of CSL to the Boring portfolio a few weeks ago and then hopped off after riding it for a quick profit. Either way, no biggie.

The second note is that TXI and its 84%-owned Chaparral Steel have established websites where you can find full financial reports, information of products, and even take a brief cyber-tour of Chaparral's plant. Very nice. Check out http://www.txi.com and http://www.chaparralsteel.com -- oh, and by the way, TXI gained $1 1/2 today.

TODAY'S NUMBERS

BGP - 1/8 ...CSL - 1/2 ...CSCO + 5/8 ...GNT + 1/2 ...OXHP +1 3/8
 ...PMSI ---...SHAW + 5/8 ...SPY ---...TXI +1 1/2 ...

*Scroll down or expand screen for full portfolio accounting

                   Day   Month    Year  History
        BORING   +0.82%  -0.14%   7.74%   7.74%
        S&P 500  +0.14%   0.56%   5.47%   5.47%
        NASDAQ   +0.13%   0.20%   9.88%   9.88%


    Rec'd  #   Security     In At       Now    Change

  4/12/96 100 The Shaw Gr    18.84     32.50    72.49%
  2/28/96 200 Borders Gro    22.51     31.75    41.03%
  1/29/96 100 Texas Indus    54.50     66.63    22.25%
   3/8/96 400 Prime Medic    10.07     11.63    15.46%
   2/2/96 200 Green Tree     30.39     34.75    14.36%
  7/23/96 100 S&P Deposit    64.15     65.81     2.59%
  6/26/96 100 Cisco Syste    53.90     54.25     0.65%
  8/13/96 100 Carlisle Co    52.65     50.75    -3.61%
  5/24/96 100 Oxford Heal    48.02     45.00    -6.30%

    Rec'd  #   Security      Cost     Value    Change

  2/28/96 200 Borders Gro  4502.49   6350.00  $1847.51
  4/12/96 100 The Shaw Gr  1884.16   3250.00  $1365.84
  1/29/96 100 Texas Indus  5449.99   6662.50  $1212.51
   2/2/96 200 Green Tree   6077.49   6950.00   $872.51
   3/8/96 400 Prime Medic  4027.49   4650.00   $622.51
  7/23/96 100 S&P Deposit  6414.99   6581.25   $166.26
  6/26/96 100 Cisco Syste  5389.99   5425.00    $35.01
  8/13/96 100 Carlisle Co  5264.99   5075.00  -$189.99
  5/24/96 100 Oxford Heal  4802.49   4500.00  -$302.49

                             CASH   $4428.44
                            TOTAL  $53872.19