Thursday, March 7, 1996
MARKET CLOSE
INDEX:
I. Market News: Dow Up a Little, NASDAQ Steady
II. Heroes: Acme-Cleveland, River Oaks, ACT Networks, Vans
III. Goats: Best Buy, Bay Networks, Utah Medical, Semtech
IV. Investment Perspective: February Same Store Numbers
V. Another Foolish Thing: Write a Fribble!
MARKET CLOSE
DJIA: 5641.69 +11.92 (+0.21%)
S&P 500: 653.65 +1.65 (+0.25%)
NASDAQ: 1093.12 +1.30 (+0.12%)
MARKET NEWS
It was another relatively calm day today, with the major indices trading within relatively narrow margins. Relative to some amazingly wild swings we've witnessed in recent weeks, that is. Needless to say, those waiting for technology issues to swing wildly up are still waiting. Retailers released their February same store sales figures, which were more robust than expected, perhaps because some January purchases were delayed by weather conditions. These figures are presented in our Investment Perspective tonight.
America Online continues to be the focus of some intriguing rumors and exciting news. For details and a Foolish perspective, check out the Special Section on the Fool main screen listbox. Also present is a Special Section on Genzyme, which beat estimated earnings by $0.03 yesterday. We've collected for you the news releases, as well as background information, Foolish analyst opinions, and links to other sources of relevant data.
Be sure to check out MF Merlin's Economic Indicator area (accessible from the Evening News screen), where today he analyzes the composite indices of leading, coincident, and lagging economic indicators. And in the Fool chat rooms, join MF Cashflo at 8pm ET in a search for stocks with good fundamental value, and MF Spec at 10pm ET for a discussion of market operations and recent events.
HEROES
Acme-Cleveland <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AMT)") else Response.Write("(NYSE: AMT)") end if %> shares skyrocketed $11 to $31 (up 55%!) today after Danaher Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DHR)") else Response.Write("(NYSE: DHR)") end if %> made a cash offer of $27 per share. The offer, announced in the New York Times, expires on April 3rd. Acme-Cleveland manufactures telecommunications and precision measurement products while Danaher makes tools, process & environmental controls and transportation products. Danaher perceives the Acme acquisition as broadening its tools product line as well as giving it an entry into the booming telecommunications market.
River Oaks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: OAKS)") else Response.Write("(NASDAQ: OAKS)") end if %> has been extremely volatile ever since news hit the wires that company directors purchased 300,000 newly issued, unregistered shares. The stock was up $1 to $5 3/4 today on almost three times normal volume. The company, which makes upholstered and leather furniture, has announced a number of initiatives to make 1996 a turn-around year after a disastrous 1995.
ACT Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ANET)") else Response.Write("(NASDAQ: ANET)") end if %> surged $3 9/16 to $22 1/16 after receiving an upgrade to "buy" from Wessels Arnold & Henderson analyst Thomas Erikson. This comes only three days after Joe Noel at Hambrecht and Quist made the stock his top pick in his mid-quarter update on the telecommunications industry. MF MOM has been following this puppy assiduously in the networking folder---stop by the Networking area (Keyword: Sector) for details. In unrelated news, a Hambrecht & Quist initial rating of Vans <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: VANS)") else Response.Write("(NASDAQ: VANS)") end if %> as a "buy" apparently has created renewed institutional and retail interest in the stock, pushing it up $1 5/8 to $14 1/4. (Institutional interest comes from funds, retail interest comes from individual investors.)
QUICK TAKES: MANOR CARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MNR)") else Response.Write("(NYSE: MNR)") end if %> surged $3 to $42 after the company announced it was spinning off its lodging division. . . British-based pharmaceutical company ZENECA GROUP PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZEN)") else Response.Write("(NYSE: ZEN)") end if %> rose $4 3/8 to $63 1/4 after the news that Sandoz and Ciba-Geigy were merging came out. . . Advertising information provider MARKET FACTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MFAC)") else Response.Write("(NASDAQ: MFAC)") end if %> knew of no reason why its stock rose $2 7/8 to $13 3/4 today, except that its earnings from last week only appeared in the Journal yesterday. . . HEALTH SYSTEMS DESIGN CORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HSDC)") else Response.Write("(NASDAQ: HSDC)") end if %> continued to surge two days after its initial public offering (IPO) at $13, rising $1 1/2 to $19 1/4 today. . . Paper stocks rose after Merrill raised the group to attractive. INTERNATIONAL PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %>, for example, rose $1 1/4 to $38 . . . LUMISYS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: LUMI)") else Response.Write("(NASDAQ: LUMI)") end if %> rose $3 3/4 to $23 after being profiled in Investor's Business Daily yesterday.
GOATS
Best Buy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %> lost $1 5/8 to $17 3/8 after it reported its second same store sales decline in the past three years. Despite the fact that total sales were up 10%, same store sales retreated 4%. Best Buy blamed the poor sales on delayed arrival of new computer models. The company has been pumping up this number for months with promotional activity, however, and they can manufacture only so much demand by giving away free monitors and such. AnnTaylor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ANN)") else Response.Write("(NYSE: ANN)") end if %> also slumped $3/4 to $16 7/8 on a 7% same store sales decline after rumors that the company was doing better early in the month.
Concerns about double and triple ordering of the new 28000 switch have been putting shares of Bay Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAY)") else Response.Write("(NYSE: BAY)") end if %> through the wringer in the last two weeks. The stock fell $2 1/2 to $32 1/8 again today, despite announcements that it will be putting out new products in March. Prudential and Utendahl Capital have both reiterated buys on the stock to no avail, with the shares only continuing lower. Bay Networks is well-positioned in the Local Area Network (LAN) switching and remote access markets. The stock is followed closely in the Networking industry area here in the Motley Fool (Keyword: Sector).
Utah Medical <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: UTMD)") else Response.Write("(NASDAQ: UTMD)") end if %> plunged $6 to $15 1/8 after the company announced what it characterized as an "abrupt" change in its partnership with Baxter. Utah's nine-year love-in with Baxter has given it the dominant market share in disposable pressure transducers. Utah had been supplying Baxter with two products, one of which was an OEM product that had Baxter's Summit label slapped on it. Baxter has now told Utah that it wants to rapidly phase this one out, although it will keep the other unit which is marketed under Baxter's Uniflow name. Utah must now develop its own distribution channel as well as more aggressively market the Uniflow product. . . not exactly a sweet position to be in.
Semtech Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SMTC)") else Response.Write("(NASDAQ: SMTC)") end if %> retreated $1 5/8 to $14 1/8 after it admitted revenues and net income would fall below analysts' estimates for its fiscal first quarter. The company expects net sales to fall 10-15% from the previous quarter and earnings to be off 20%. Last year the company earned $0.40 per share (EPS) on $17.6 million. Analysts had been looking for $0.42 EPS according to industry guide First Call. The company blamed "softness and excess inventory" as the reason for the decline.
QUICK CUTS: GENZYME TISSUE REPAIR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GENZL)") else Response.Write("(NASDAQ: GENZL)") end if %> lost $2 1/4 to $16 1/2 after it was cut to buy from strong buy by Cowen & Co. . . . CYBERCASH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CYCH)") else Response.Write("(NASDAQ: CYCH)") end if %> continued to cyber-crash, down $4 1/2 to $27 3/4, as enthusiasm for virtual commerce virtually evaporated. . . RAPTOR SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RAPT)") else Response.Write("(NASDAQ: RAPT)") end if %> lost $4 1/8 to $28 5/8 as investors continued to bail out of digital stocks. . . Small-cap semiconductor capital equipment stocks like TENCOR INSTRUMENTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TNCR)") else Response.Write("(NASDAQ: TNCR)") end if %> continued to slump, with Tencor down $1 7/8 to $17 1/8, on yesterday's not-so-positive outlook from Texas Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %>. . . EXOGEN <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: EXGN)") else Response.Write("(NASDAQ: EXGN)") end if %> continued to fall, down $2 to $14 after being cut by Cowen & Co. on Tuesday. . . PARADIGM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PRDM)") else Response.Write("(NASDAQ: PRDM)") end if %>, shifted down $1 1/2 to $10 7/8, continuing its slump after Smith Barney cut its rating yesterday.
INVESTMENT PERSPECTIVE: February Same Store Numbers
Below we present sales data released by major retailers today. Note that the "Total" figure represents the change in sales from February 1995 to February 1996 of *all* of the given retailers' stores. Since analysis of these numbers can get muddied by stores which open during the 12 months counted, a second number is also released---the "Same Store" number. This number reflects the change in sales in all of the given retailers' stores which have been in business for all of the past year---in other words, revenues from the exact *same* stores are being compared. So if Thelma's Thimbles had only one store open last year, but added 65 new stores this year, the "Total" figure would reflect the revenue change of all 66 stores, while the "Same Store" figure would only look at the change in revenues of the first store. Got it? Here we go!
Store Total Same StoreAmerican Eagle +26.4% +14.1%
Ames Department +3.6% -2.2%
AnnTaylor +10.2% -7.0%
Bed, Bath & Beyond +40.2% +10.2%
Best Buy +19.0% -4.0%
Bombay Co. +0.0% -9.0%
Bon-Ton Stores +7.2% +8.4%
Cache Inc. +16.0% +4.0%
Carson Pirie Scott -26.4% +1.6%
Catherine's Stores +5.8% +1.0%
Cato Corp. +21.0% +14.0%
Charming Shoppes +6.0% +12.0%
Claire's Stores +38.0% +21.0%
Consolidated Stores +18.5% +10.0%
Dayton Hudson +15.0% +8.4%
Dillard Dept. +11.0% +8.0%
Dollar General +31.3% +14.1%
Dress Barn +1.0% -5.0%
Edison Brothers -21.4% -5.2%
Family Dollar +20.9% +13.9%
Federated Dept. +13.4% +9.0%
Filene's Basement +4.0% +2.0%
Fred's Inc. +10.9% +8.7%
Gantos Inc. -4.0% -4.0%
Gap +22.0% +4.0%
Gottschalk's +3.8% -2.4%
Gymboree Corp. +22.0% -7.0%
Hechinger +5.0% +0.0%
Heilig-Meyers Co. +29.0% +15.3%
Hill's Stores +6.8% +14.0%
K-Mart +7.3% +7.1%
Kohl's Dept. +39.2% +21.8%
Lechters Inc. +3.2% -4.1%
Limited +16.0% +7.0%
MacFrugal's +7.0% -0.9%
May Department +14.6% +7.4%
Melville +9.2% +6.1%
Men's Warehouse +32.6% +10.6%
Mercantile Stores +4.6% +5.1%
Natural Wonders +7.7% +5.2%
Neiman Marcus +20.3% +16.4%
Penney, JC +3.0% -0.1%
Perfumania +22.1% +9.5%
Pier 1 Imports +0.0% +6.8%
Profitt's +6.0% +8.0%
Ross Stores +24.0% +15.0%
Sears +8.3% +5.1%
Sharper Image +0.0% -5.0%
ShopKo +13.5% +0.9%
Starbucks Corp. +52.0% +8.0%
Sunglass Hut +42.6% +11.1%
Tandy Inc. +27.0% +7.0%
TJX Cos. +99.0% +7.0%
United Retail Group +2.0% -4.0%
Value City +19.5% +5.3%
Waban +7.4% +0.1%
Wal-Mart +11.5% +3.8%
Woolworth +4.2% +3.8%
ANOTHER FOOLISH THING: Write a Fribble!
The beauty of Foolishness is that it's a two-way street. You learn from us, and we learn from you. One fun way to let your voice be heard in Fooldom is to pen a Fribble. Our Fribble area , hosted by MF Boswell, offers a marvelous collection of short essays on life and/or investing. Check them out and try writing a few yourself! (But first read the "What's a Fribble?" guidelines in the "Fribbledom" section of the Fribble area.) MF Boswell welcomes submissions from all Foolish followers---e-mail your 400-600 word Fribble to him at [email protected].
YET ANOTHER FOOLISH THING: Fools on the Radio!
That's right! David and Tom Gardner are bringing their Foolish outlook to the airwaves this weekend. Tune in to the Monitor Radio's Weekend Edition---stations and times are listed in the Radio page.
Byline: Randy Befumo (MF Templar)