HEROES

BORDERS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BGP)") else Response.Write("(NYSE: BGP)") end if %> surged $4 5/8 to $44 5/8 today on more than four times normal volume. The operator of the Borders, WaldenBooks and WaldenSoftware retail chains reported that it would earn $1.36 to $1.40 per share in fiscal 1996. The company anticipates that fiscal 1997 earnings will be about $1.80 per share, well above the $1.65 that analysts were expecting. Management signaled its confidence by announcing a two-for-one stock split that will be effective on March 11th, the same time it releases its 1996 earnings. Borders Group helped to buoy the Motley Fool's Boring Portfolio, which is covered in the Hall of Portfolios area.

HARRY'S FARMERS MARKET <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HARY)") else Response.Write("(Nasdaq: HARY)") end if %> leapt $2 7/16 to $6 5/16 after it reported that it had received $23 million in new capital from Progressive Food Concepts, a BOSTON MARKET <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BOST)") else Response.Write("(Nasdaq: BOST)") end if %> affiliate. Progressive could wind up owning as much as 43% of Harry's should the deal go through, but shareholders of Harry's get a company with a much better working capital situation as a result. Harry's had no working capital and debt of $29 million in its last reported quarter -- not exactly the picture of health. Progressive Food Concepts wants part of Harry's In a Hurry, a restaurant within a grocery store that has been growing quite well. Boston Market believes the next great frontier in dining will be take-out food from the supermarket.

QUICK TAKES: Shares of full-service brokerage PAINE WEBBER GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PWJ)") else Response.Write("(NYSE: PWJ)") end if %> rose $4 5/8 to $36 on talks of a takeover by privately-held Morgan Stanley... NOBLE DRILLING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NE)") else Response.Write("(NYSE: NE)") end if %> jumped $1 1/2 to $21 7/8 after reporting earnings per share (EPS) of $0.20 last evening... Solid-waste manager BROWING-FERRIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BFI)") else Response.Write("(NYSE: BFI)") end if %> hauled ahead $2 1/4 to $32 1/4 after beating consensus estimates by a penny on higher than expected margins... RENAISSANCE RE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RNR)") else Response.Write("(NYSE: RNR)") end if %> bounced up $1 3/4 to $37 1/2 after it finished repurchasing about 10% of its outstanding shares... MAFCO CONSOLIDATED GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MFO)") else Response.Write("(NYSE: MFO)") end if %> jumped $2 to $37 1/2 after Mafco Holdings announced it would only adjust its takeover price upward, not upward or downward as previously announced... Gallium arsenide chip maker ANADIGICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ANAD)") else Response.Write("(Nasdaq: ANAD)") end if %> blew through estimates of $0.26 EPS, reporting $0.76 EPS and rising $7 3/4 to $53 1/4.

MORE TAKES: PATHOGENESIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PGNS)") else Response.Write("(Nasdaq: PGNS)") end if %> popped up $5 1/4 to $30 1/4 after news broke that it had completed Phase III clinical trials for its chronic lung infection treatment... CUBIST PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CBST)") else Response.Write("(Nasdaq: CBST)") end if %> clambered up $2 3/8 to $9 5/8 after being featured on the Newshour with Jim Lehrer as a company working on treating diseases resistant to current antibiotics... TRIGON HEALTHCARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TGH)") else Response.Write("(NYSE: TGH)") end if %>, the largest healthcare provider in Virginia, closed up $4 3/4 to $17 3/4 on its first day of trading ... Automobile fastener fabricator FEDERAL SCREW WORKS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FSCR)") else Response.Write("(Nasdaq: FSCR)") end if %> screwed in $3 1/2 to $40 after reporting earnings of $1.21 per share... Arizona Stock Analysis favorite JDA SOFTWARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JDAS)") else Response.Write("(Nasdaq: JDAS)") end if %> leapt $5 to $30 after reporting a 67% earnings gain.

GOATS

MERCURY FINANCE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MFN)") else Response.Write("(NYSE: MFN)") end if %> dropped $12 3/4 to $2 today after not trading for more than two days. The subprime automobile financing company is being forced to restate more than three years worth of earnings due to certain "unauthorized entries" in its record books. The company reported that its controller and senior vice president of finance had disappeared on Friday, but it was reported yesterday that this gentleman had actually turned himself into the authorities and was working with them to figure out what has been going on at Mercury. Until last week, Mercury Finance was the largest player in the auto finance arena. Now it is uncertain what will happen to the company over the next few months.

Shares of THE LEARNING COMPANY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TLC)") else Response.Write("(NYSE: TLC)") end if %>, formerly known as Softkey International, got pounded today for $3 3/8 to $12 5/8. Oppenheimer & Co. cut its rating on the company to "market perform" from "outperform," stating that it saw the consumer software company's U.S. business weakening. Entertainment and edu-tainment software companies like the ol' Learning Company have been getting pasted for months. Because the Learning Company carries a balance sheet full of debt, weak business sucks a lot more cash out of the company than peers like BRODERBUND <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BROD)") else Response.Write("(Nasdaq: BROD)") end if %>. The company hit a new 52-week low today.

RADISYS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RSYS)") else Response.Write("(Nasdaq: RSYS)") end if %> fell $11 1/2 to $46 after the Securities and Exchange Commission (SEC) requested documents from the company concerning inventory accounting. The company's accounting has been the subject of much scrutiny from short-sellers, buttressed by the complaints of a rogue employee fired a few months ago. Many have also questioned the ability of the supplier of embedded computer technologies to grow earnings, given a large part of its business is a unit purchased from INTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> that had shrunk three years in a row. Radisys posted a blow-out fourth quarter yesterday, reporting $0.46 EPS versus $0.11 a year ago, four cents above expectations. One analyst called today's fall a buying opportunity and reiterated a $52 price target.

QUICK CUTS: CENTENNIAL TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CTN)") else Response.Write("(NYSE: CTN)") end if %> continued its free-fall, slipping $3 1/2 to $23 today after reporting earnings yesterday... PARAGON TRADE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PTB)") else Response.Write("(NYSE: PTB)") end if %> was dirtied for $4 1/4 to $23 1/2 after it said that it sees 1997 diaper earnings below 1996 levels... HARMAN INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HAR)") else Response.Write("(NYSE: HAR)") end if %> dropped $4 5/8 to $46 3/8 after Donaldson, Lufkin & Jenrette cut the company to "market performer" from "buy"... INTERGRAPH CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INGR)") else Response.Write("(Nasdaq: INGR)") end if %> dropped $2 to $8 after reporting a dismal fourth quarter... Focused-ion beam (FIB) systems maker MICRION CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MICN)") else Response.Write("(Nasdaq: MICN)") end if %> dropped $4 1/4 to $21 3/4 in spite of beating consensus estimates... RATIONAL SOFTWARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RATL)") else Response.Write("(Nasdaq: RATL)") end if %> dropped $1 7/8 to $25 3/8 after an analyst stated the upcoming merger with SQA INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SQAX)") else Response.Write("(Nasdaq: SQAX)") end if %> would limit the upside to earnings, which also sucked SQA down $1 7/8 to $21 1/2... Former Fool Portfolio short QUARTERDECK CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QDEK)") else Response.Write("(Nasdaq: QDEK)") end if %> dropped $1 1/8 to $5 1/8 after the company saw first quarter revenues decline 46%.

FOOL ON THE HILL
An Investment Opinion by MF Templar

Amrion Calls in Sick

Vitamin and "nutriceutical" maker AMRION <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMRI)") else Response.Write("(Nasdaq: AMRI)") end if %> dropped $2 to $18 1/2 today on nearly six times normal volume. At one point in the late afternoon the company was down more than $4 1/2 on news that it had terminated discussions with another company regarding a potential strategic combination. Disappointed investors looking for a quick hit due to a merger backed out of the stock en masse, pushing the company well below the 52-week high of $26 3/4 it achieved in October. The company had announced on January 12th that it was chatting with another company about a possible deal.

The company often pops up in many trend-following money managers portfolios, as it plays right into the perceived boom in "healthy lifestyles" and alternative healthcare. Amrion hawks vitamins and nutritional aids, calling its many of its products "nutriceuticals" -- a hybrid of the words nutrition and pharmaceutical. The company's Biodynamax and Advanced Kinetics lines are sold in health food stores throughout the country. The company specifically targets active individuals who participate in fast growing sports, as well as alternative medicine practitioners who are looking for "natural" stuff to prescribe patients.

Trading in the company's shares has become volatile in the last few months after a monster rise from the $12 to the mid-$20 range. Growth has been torrid, with the company posting more in revenues in the first three quarters of fiscal 1996 than it did for all of fiscal 1995. With trailing earnings per share (EPS) of $0.79, the company trades at 22.8 times earnings. EPS over the past nine months have been 44.2% above last year, while revenues have grown 32.45%. The margins have expanded because Amrion has been able to maintain rigid cost control on its products, with the cost of mailings and the cost of sales, general and administrative (SGA) expenses staying the same.

On the same day that Amrion announced that it was considering a deal with another company, it affirmed estimates for sales and earnings for fiscal 1996. According to Zacks, consensus estimates for fiscal 1996 stand at $0.81 EPS. The company has yet to report its fiscal fourth quarter, which is estimated to come in at $0.23 EPS compared to $0.17 a year ago -- a 35.3% jump. Preliminary estimates for fiscal 1997 are $1.02 EPS, which would be a 25.9% jump over fiscal 1996. There are only two analysts contributing estimates for Amrion at this time, implying that the company is not widely followed. Analysts have not issued an estimated five-year growth rate, although the company would probably rate 15% to 25% annualized growth over the next five years.

Amrion is still recovering from fiscal 1994 when earnings per share were flat compared to fiscal 1993 as a result of a dilutive secondary offering, and the stock price dropped from the $15 range to the $6 range over the course of a few months. Bouncing back strong, the company grew earnings by 42.8% in 1995 and is poised to grow earnings by 35% in fiscal 1996. Revenues have grown at an annualized rate of 48% over the past three years. The most positive development is that the company has reversed the trend towards lower profit margins. In fiscal 1993, the company's operating margin was 13.6%. This had fallen to 11.9% by 1994 and was 11.5% in the first nine months of 1995. In the first nine months of 1996, the company's profit margins had increased to 11.9%, largely because the cost of products had only grown 28.5%, even as revenues increased in the mid-30% range. Cash flow from operations in the past quarter improved markedly, although in the past nine months increased inventories have eaten up a lot of the benefit of higher earnings.

Trading at 22.8 times this year's estimate and 18.1 times next year's estimates, Amrion is a company growing in excess of 30% in an industry many agree will continue to grow throughout the decade. Given the almost irrational preference many have for "natural" products and the use of vitamins as an attempt to compensate for unhealthy lifestyles, it seems clear that the trends that have allowed Amrion to grow revenues nearly 50% a year over the past three years are still in place. With a little more than five million shares outstanding, the company is a micro-cap priced at $95 million for the whole shebang with $9.5 million in cash and no debt. When the company reports its fourth quarter, trailing revenues should be $54 million, meaning it will go for about 1.7 times sales. This might be worth looking at for long-term investors willing to tolerate a lot of volatility.

CONFERENCE CALLS

FIRST DATA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FDC)") else Response.Write("(NYSE: FDC)") end if %>
1-800-925-0560 -- replay through 2/7

IOMEGA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IOM)") else Response.Write("(NYSE: IOM)") end if %>
(800) 633-8284 (reservation #2219792) -- replay

3M <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMM)") else Response.Write("(NYSE: MMM)") end if %>
replay through 2/4
(800) 633-8284 (reservation # 2198620)

COMPUTER HORIZONS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHRZ)") else Response.Write("(Nasdaq: CHRZ)") end if %>
replay available for 72 hrs. beginning at noon EST on 1/29
(800) 938-0931

PRIME HOSPITALITY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PDQ)") else Response.Write("(NYSE: PDQ)") end if %>
(800) 642-1687 (access code: 199532) -- replay through 2/5

ARVIN INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARV)") else Response.Write("(NYSE: ARV)") end if %>
(800) 633-8284 (reservation # 2331673) -- replay avail thru 2/5

SEAGRAM LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VO)") else Response.Write("(NYSE: VO)") end if %>
(800) 394-6920 -- replay thru 9 PM EST on 1/31

CONTROL DATA SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDAT)") else Response.Write("(Nasdaq: CDAT)") end if %>
(402) 220-1003 -- replay thru 2/6

FOOL FEATURES

Our miners have been hard at work this week, digging up this weekend's edition of Fool's Gold. This week features a Rogue follow-up to the story on QUIGLEY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QUIG)") else Response.Write("(Nasdaq: QUIG)") end if %>. There's been a lot of news flying around this maker of Cold-Eeze zinc lozenges, and Rogue reporter Louis Corrigan has stayed on top of the story that he first detailed on January third. Other features include a Sector Snapshot on Environmental Services, the Weekend Research Center, and technology news from the EE Times. Check them out!

ANOTHER FOOLISH THING
The Weekly Fool

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Randy Befumo (MF Templar), a Fool
Fool On the Hill

Dale Wettlaufer (MF Raleigh), another Fool
Heroes & Goats

Brian Bauer (MF Hoops), one more Fool
Editing

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