Boring Portfolio Report
ANN ARBOR, Mich. (Dec. 16) -- An attempt at a rally in stocks was promptly
squished on Monday, as the wringing out of "irrational exuberance" in the
market continued. The Dow fell 37 points to close at 6268 on NYSE volume
of 448 million shares. The S&P 500 slid 7.65 or 1.04%, but it was the
Nasdaq that took the brunt of the damage, flopping the equivalent of 120
Dow points, or 1.86%.
Technology stocks in the Boring portfolio were caught in the downdraft. Shares
of Cisco Systems and Oracle each fell $1 1/2, and Solectron dropped $1/4.
After the closing bell, Solectron reported quarterly earnings of $0.63 per
share, not counting a nickel in non-recurring charges associated with the
merger of Force Computers. That matches the consensus of analysts' estimates
as reported by First Call. Revenues of $808 million represented a 17% increase
over the corresponding quarter (which is Solectron's fiscal first quarter)
in 1995.
According to my math, operating margin increased to 6.5% as compared with
Q1:95's 5.9%, excluding the non-recurring charge. During the quarter, current
assets grew by $164 million, to $1.3 billion. Total assets stand at $1.62
billion, as compared with total liabilities of $852 million.
Solectron joined the Boring Portfolio in mid-October. For those of you who
may not be familiar with the company, it is a global supplier of
pre-manufacturing, manufacturing, and post-manufacturing services to electronics
OEMs. Solectron received the 1991 Malcolm Baldrige National Quality Award
and has received more than 100 other quality and service awards from its
customers.
Regarding Cisco, the Dell'Oro Group announced today the results of its 3Q'96
Router and Remote Access study. (The Dell'Oro Group is a research and consulting
firm that specializes in the networking industry; www.delloro.com is their
Web address.) According to the report, Cisco continued to dominate the router
market, with a 59.4% share. Bay was next, with 12.3%. Overall, router market
sales grew 6% sequentially to $1.2 billion during the third quarter of 1996.
In the remote access market, valued at $554 million, Cisco was #3 (behind
US Robotics and Ascend), with a 15.4% share.
On Friday, I noted that Cisco and Interlink Services Inc. had formed a strategic
alliance to develop and market software to extend multiprotocol networking
for MVS mainframes. As part of the agreement, Cisco acquired a 9% stake in
Interlink. At the time, I was unsure what MVS mainframes were. A helpful
reader (with an ibm.com email address) informed me that MVS mainframes are
the biggest computers made by IBM -- the ones that do airline reservations,
run banks, and so forth. Amdahl also make 'em. (Yes, Virginia, big iron lives.)
Turning to other news, the yield on the benchmark 30-year Treasury bond rose
to 6.63% on Monday, which sent financial stocks lower, including our own
Green Tree Financial.
Although it's against Motley Fool policy to pass along unsubstantiated tips,
I spotted a Green Tree tip that I just have to let you in on. According to
the Epsom Salt Industry Council, based in Nutley, NJ, a daily watering with
the Epsom Salt Christmas Tree Solution will help you to retain a nice green
tree over the holidays. Water daily with a mixture of: 2 gallons hot water,
2 cups of clear Karo Syrup, 2 ounces liquid bleach, 1 cup Epsom Salt, and
1/2 teaspoon Borax.
Not everything shed its needles in the Borefolio today. Borders booked a
nice $3/8 gain, and Carlisle Companies rose $7/8. Also, Oxford Health was
upgraded to a "buy" by Cowen and Co. OXHP closed unchanged at a bid of $56.
Monday, December 16, 1996
Stock Change Bid
--------------------
BGP + 3/8 33.50
CSL + 7/8 58.25
CSCO -1 1/2 63.25
GNT -1 36.63
ORCL -1 1/2 42.50
OXHP --- 56.00
PMSI - 3/8 11.38
SLR - 1/4 57.88
Day Month Year History
BORING -0.89% -4.77% 14.03% 14.03%
S&P 500 -1.04% -4.76% 15.99% 15.99%
NASDAQ -1.86% -2.45% 21.13% 21.13%
Rec'd # Security In At Now Change
2/28/96 200 Borders Gr 22.51 33.50 48.81%
2/2/96 200 Green Tree 30.39 36.63 20.53%
6/26/96 100 Cisco Syst 53.90 63.25 17.35%
5/24/96 100 Oxford Hea 48.02 56.00 16.61%
3/8/96 400 Prime Medi 10.07 11.38 12.97%
8/13/96 100 Carlisle C 52.65 58.25 10.64%
10/15/96 100 Solectron 54.52 57.88 6.14%
11/21/96 100 Oracle Cor 48.65 42.50 -12.64%
Rec'd # Security In At Value Change
2/28/96 200 Borders Gr 4502.49 6700.00 $2197.51
2/2/96 200 Green Tree 6077.49 7325.00 $1247.51
6/26/96 100 Cisco Syst 5389.99 6325.00 $935.01
5/24/96 100 Oxford Hea 4802.49 5600.00 $797.51
8/13/96 100 Carlisle C 5264.99 5825.00 $560.01
3/8/96 400 Prime Medi 4027.49 4550.00 $522.51
10/15/96 100 Solectron 5452.49 5787.50 $335.01
11/21/96 100 Oracle Cor 4864.99 4250.00 -$614.99
CASH $10651.57
TOTAL $57014.07
Transmitted: 12/16/96