HEROES

RENAISSANCE HOTEL GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RHG)") else Response.Write("(NYSE: RHG)") end if %> jumped $4 5/8 to $29 3/4 after the hotel management group agreed to be acquired by MARRIOTT INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MAR)") else Response.Write("(NYSE: MAR)") end if %> for $30 per share in cash. Renaissance operates and franchises 150 hotels around the world, and will increase the number of hotels in the Marriott group by about 13%. The transaction will add the Renaissance, New World, and Ramada International names to the Marriott portfolio, which includes the flagship Marriott properties and the Courtyard, Fairfield, and Residence Inns. Marriott also operates resort properties and specialty hotel properties such as the Ritz-Carlton. In addition to rounding out the company's hotel portfolio and gaining Renaissance's strong cash flow, this move is very much a strategic reaction to the proposed HILTON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HLT)") else Response.Write("(NYSE: HLT)") end if %> - ITT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ITT)") else Response.Write("(NYSE: ITT)") end if %> merger.

Shares of small cap microwave-based instruments maker CEM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CEMX)") else Response.Write("(Nasdaq: CEMX)") end if %> surged $7/8 to $9 1/2 after Barron's featured the company's story in this weekend's "Sizing Up Small Caps" feature. The story went into detail about why the company's sales have fallen and why it could be on the comeback trail. Perhaps a better name for the column would be "Sizing Up Micro Caps with Micro Floats"? With only 3.5 million shares outstanding and a number of institutions holding onto shares (three, in fact, filed 13-G statement of ownership reports in the last twelve days), it's not surprising that the stock is rising dramatically over the write-up in the one-way message board.

AMERICAN FEDERAL BANK <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMFB)") else Response.Write("(Nasdaq: AMFB)") end if %> gained $6 to $27 1/2 after the Greenville, South Carolina-based bank agreed to merge with CCB FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCB)") else Response.Write("(NYSE: CCB)") end if %>, a much larger, North Carolina bank. American Federal shareholders will receive 0.445 shares of CCB Financial for each of their shares, which values American Federal at $28.86 based on closing prices over the last five days. In addition to gaining 40 branches in South Carolina, CCB Financial will also gain American Federal's consumer finance business, Finance South, which operates out of 17 branch offices. With a very favorable efficiency ratio of 55% arising from a combination of operational control, a strong regional economy, and the specialization of the consumer loan business, CCB Financial feels that it can justify the 2.7 times book value it is paying.

QUICK TAKES: In reaction to the CCB Financial-American Federal merger, Charleston, South Carolina-based FIRST FINANCIAL HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FFCH)") else Response.Write("(Nasdaq: FFCH)") end if %> rose $1 3/4 to $26 1/4... PHILIP MORRIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> rose $5 3/4 to $131 1/4 and RJR NABISCO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RN)") else Response.Write("(NYSE: RN)") end if %> gained $1 7/8 to $37 3/8 as rumors circulate about a possible industry-wide settlement with the federal government... Upon announcing that it has received a $750,000 licensing payment from a JOHNSON & JOHNSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> agreement, FUISZ TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FUSE)") else Response.Write("(Nasdaq: FUSE)") end if %> jumped $1 1/4 to $7 3/8... ADVANCED RADIO TELECOM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ARTT)") else Response.Write("(Nasdaq: ARTT)") end if %> gained $1 3/4 to $12 1/8 after Merrill Lynch analyst Daniel Reingold mentioned the millimeter wave telecom services company on this weekend's Wall $treet Week on PBS... Natural food stores WHOLE FOODS MARKET <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WFMI)") else Response.Write("(Nasdaq: WFMI)") end if %> rose $3 7/16 to $23 11/16 after announcing Q1 earnings per share (EPS) of $0.24, beating the mean estimate of $0.23... CROP GROWERS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CGRO)") else Response.Write("(Nasdaq: CGRO)") end if %> rose $1 1/4 to $8 3/4 after its former CEO agreed to sell his shares in the company... Web browser company SPYGLASS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPYG)") else Response.Write("(Nasdaq: SPYG)") end if %> picked up $1 9/16 to $12 1/4 after reporting deals with IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> and XEROX <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XRX)") else Response.Write("(NYSE: XRX)") end if %>... BOSTON ACOUSTICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BOSA)") else Response.Write("(Nasdaq: BOSA)") end if %> gained another $4 3/4 to $30 after announcing last Friday that it has signed an agreement to supply a "major" PC company with speaker systems... Footwear company CONVERSE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CVE)") else Response.Write("(NYSE: CVE)") end if %> shot up another $4 3/4 to $27 1/4 as things continue to go its way, as Louis Corrigan wrote in a recent Daily Double... HORIZON/CMS HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HHC)") else Response.Write("(NYSE: HHC)") end if %> jumped $2 1/4 to $16 1/2 after the outpatient surgery/rehabilitation center operator agreed to merge with HEALTHSOUTH CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HRC)") else Response.Write("(NYSE: HRC)") end if %>... California savings and loan FIRST REPUBLIC BANCORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FRC)") else Response.Write("(NYSE: FRC)") end if %> rose $2 7/8 to $23 5/8 on the Ahmanson merger news (see Fool on the Hill below), in addition to announcing that it has retained Montgomery Securities to look at strategic alternatives... Aerospace and telecom industry component supplier DUCOMMUN INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DCO)") else Response.Write("(NYSE: DCO)") end if %> gained $2 7/8 to $25 1/4 after reporting a 76% increase in Q4 EPS... FREEPORT-MCMORAN COPPER & GOLD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FCX)") else Response.Write("(NYSE: FCX)") end if %> rose $2 5/8 to $34 1/8 on striking a deal with BRE-X MINERALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BXMNF)") else Response.Write("(Nasdaq: BXMNF)") end if %> of Canada... Research laboratory and blood bank company DAXOR CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: DXR)") else Response.Write("(AMEX: DXR)") end if %> gained $1 5/16 to $11 after the New York State Supreme Court ruled in the company's favor in an action against the N.Y. State Health Department... VIACOM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: VIA.B)") else Response.Write("(AMEX: VIA.B)") end if %> tuned in for a $2 3/8 gain to $35 3/8 on announcing the sale of its radio group to EVERGREEN MEDIA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EVGM)") else Response.Write("(Nasdaq: EVGM)") end if %>.

GOATS

ATLAS AIR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ATLS)") else Response.Write("(Nasdaq: ATLS)") end if %> had a near mid-air collision with momentum investors bailing out of the hot airfreight carrier following this morning's earnings report. The company's shares fell $10 to $24 1/4 as Q4 earnings per share (EPS) of $0.60 missed estimates by $0.03 per share. That represents a 40% increase in per-share earnings on a robust 87% increase in quarterly revenues. Even though the carrier was delayed by its lessor from taking delivery of a 747 aircraft during the quarter, restraining revenue growth, the company was still able to keep operating margins at a fat 29%. Despite that accomplishment being achieved in an environment of greatly increased fuel prices, the shares fell very close to their 52-week low.

CENTENNIAL TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CTN)") else Response.Write("(NYSE: CTN)") end if %> finally opened today, closing down $13 1/2 at $3. The New York Stock Exchange will seek to delist the company and has set March 3 as the date on which it will suspend trading. The PC-card manufacturer and electronics contract manufacturer was one of the hottest stocks of 1996, but took less than 45 days to completely collapse as allegations of resume fudging by the company's CEO came to light, and as earnings came out that made justifying the company's valuation difficult. The company has now announced that it did overstate 1996 earnings, and that the company's CEO is now under arrest for insider trading by allegedly engaging in options transactions to profit from the downfall in the stock price. This whole episode demonstrates yet again the value of investing in quality managements and people, and not "technology."

QUICK CUTS: I-STAT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STAT)") else Response.Write("(Nasdaq: STAT)") end if %> was slammed for a $8 1/8 loss to $19 1/8 after Smith Barney downgraded the medical devices maker... BOYDS WHEELS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BYDS)") else Response.Write("(Nasdaq: BYDS)") end if %> fell $4 3/8 to $9 7/8 after the company announced that Q4 earnings will fall below estimates due to temporary acquisition-related inefficiencies... Restaurant company SAGEBRUSH INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SAGE)") else Response.Write("(Nasdaq: SAGE)") end if %> was singed for a $1 7/8 loss to $6 1/4 on reporting a 16% increase in operating earnings for the fourth quarter... Advertising and marketing company HA-LO INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HALO)") else Response.Write("(Nasdaq: HALO)") end if %> slid $6 5/8 to $19 1/2 after reporting Q4 EPS of $0.27, in line with the First Call estimate... BRE-X MINERALS LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BXMNF)") else Response.Write("(Nasdaq: BXMNF)") end if %> holders apparently weren't pleased with the Freeport-McMoran deal, as shares fell $2 3/8 to $15 3/8... AMERICAN PAD & PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AGP)") else Response.Write("(NYSE: AGP)") end if %> slid $1 7/8 to $18 3/4 on reporting Q4 EPS of $0.36, two cents short of estimates... U.K. bank BARCLAYS PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BCS)") else Response.Write("(NYSE: BCS)") end if %> lost $6 3/4 to $72 7/8 as 1996 earnings failed to live up to expectations, prompting analysts to lower 1997 earnings estimates... CLAIRE'S STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CLE)") else Response.Write("(NYSE: CLE)") end if %> ticked down $1 3/8 to $14 5/8 after the young women's retailer reported Q4 EPS of $0.49, beating estimates of $0.48... Fashion designer LIZ CLAIBORNE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LIZ)") else Response.Write("(NYSE: LIZ)") end if %> lost $2 3/8 to $41 1/4 despite reporting better-than-expected earnings and saying that it will buy back up to 1.7 million shares.

FOOL ON THE HILL
An Investment Opinion by MF Templar

Return of the Banking Merger

Although H.F. AHMANSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHM)") else Response.Write("(NYSE: AHM)") end if %> might not be a household name, the largest savings and loan in the United States is getting quite a bit larger today. The owner and proprietor of the Home Savings of America banks announced that it would acquire California thrift GREAT WESTERN FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GWF)") else Response.Write("(NYSE: GWF)") end if %>, trading 1.05 shares of Ahmanson for each outstanding share of Great Western. Great Western snapped ahead $10 3/4 to $45 after the deal was reported. The deal is being done at 2.52 times Great Western's book value, on the high side for bank mergers.

In spite of its low profile, H.F. Ahmanson is a giant in the banking industry. The company has $50.6 billion in assets and a deposit base of $35.4 billion in its Home Savings operation. Home Savings has 389 personal financial service centers in four states and 117 mortgage lending offices in nine states, giving it the same reach and clout as many of the so-called regional banks that tend to appear on investor radar screens like NATIONSBANK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NB)") else Response.Write("(NYSE: NB)") end if %> or FIRST UNION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FTU)") else Response.Write("(NYSE: FTU)") end if %>.

If the proposed merger with Great Western goes through, it will become very difficult to ignore Ahmanson for much longer. With Great Western's asset base of $42.9 billion, the combined company would command tremendous resources. Add to this Great Western's more than 1,150 mortgage lending, retail banking and consumer finance offices nationwide, concentrated in California and Florida, and you have a retail banking giant with a strong presence in many of the growing areas of the country.

Despite the scale, the merger has its potential drawbacks. Great Western has had difficulty improving its financial performance over the past decade as it has met with mixed success in diversifying operations to include business loans and credit card operations. Great Western delivered $1.69 EPS in 1994, $1.72 EPS in 1995, and confusing results in 1996 due to a number of one-time charges. Many have speculated that the entire exercise has been to dress up the company in order to attract a buyer; although one would have to call Great Western's receipt of Ahmanson's surprise offer lukewarm at best.

Ahmanson has more than doubled since its October '94 lows in the $15 range more than two and a half years ago, a strong performer in a strong industry. Earnings growth has been bolstered by acquisitions and regular share repurchases. Since initiating a stock repurchase program in October of 1995, Ahmanson has repurchased 14% of its outstanding shares at an average price of $26 1/8. The company also redeemed its preferred shares in September of 1996, resulting in a one-time charge, and reissued debt in December almost 1.5% lower.

The purchase of Great Western would add $375.9 million to Ahmanson's bottom line, more than doubling the $310.2 million that Ahmanson had previously expected. Even though shares outstanding would increase by 144.6 million to 250.1 million, Ahmanson sees the deal as accretive to earnings by 5% due to cost savings. This means that not only will the combined entity overcome the roughly 3% dilution due to the shares issued, but the combined company will make 5% more, or about $741 million on a combined basis. This would give the company EPS of $2.96 in fiscal 1997.

Beyond 1997, Ahmanson sees 15% accretion in fiscal 1998 and 26% accretion in fiscal 1999, explaining why the company's shares are trading at a lofty 15.1 times 1997 earnings -- as it is only 12 times what the company now expects to earn in 1998. Investors should be wary, however. Most studies have found that the much-trumpeted cost savings that arise from bank mergers do not materialize as quickly or to the degree that the acquiring company often states in order to get the deal done. Even with the higher expectations, Ahmanson still trades at a premium to NationsBank's and BANC ONE'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ONE)") else Response.Write("(NYSE: ONE)") end if %> 14 times forward earnings, and First Union's 13 times forward earnings. The risk of the cost savings not materializing as planned combined with the slightly higher multiple suggests that there is more risk at this price than potential reward.

CONFERENCE CALLS

AT&T Capital
February 18, at 2 p.m. EST until midnight, February 25.
(800) 475-6701 code: 331034

RED ROOF INNS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RRI)") else Response.Write("(NYSE: RRI)") end if %>
(800) 633-8284 (reservation # 2369664)
replay avail until 5PM EST on 2/19

DOLLAR GENERAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DG)") else Response.Write("(NYSE: DG)") end if %>
(strategic plans for FY98)
(402) 220-1032 (code: 971032) -- replay

UNITED HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UNH)") else Response.Write("(NYSE: UNH)") end if %>
replay available until 2/18
(800) 475-6701 (code: 323513)

360 (DEGREES) COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XO)") else Response.Write("(NYSE: XO)") end if %>
(402) 220-3014 -- replay through 1/21

02/18/97 (Tuesday)
GENZYME CORP-TISSUE REPAIR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GENZL)") else Response.Write("(Nasdaq: GENZL)") end if %>
(402) 220-6030 -- replay through 5PM on 2/25

02/18/97 (Tuesday)
HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %>
(303) 446-5399 (reservation # 2348408) -- replay avail thru 2/25

CCB FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCB)") else Response.Write("(NYSE: CCB)") end if %> and
AMERICAN FEDERAL BANK <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMBK)") else Response.Write("(Nasdaq: AMBK)") end if %>
To discuss merger agreement(800) 839-4281, confirmation code # 313939

FOOL FEATURES

The Fool introduces a new feature today -- the Daily Double. It provides a description and valuation of a company whose stock has more than doubled over the last six months. Each day, the Fool will review the business, talk about the cause of its doubling in value, and broadly consider valuation.

Our aim is two-pronged. We hope that by concentrating attention on spectacular recent performance, together we'll come to a more thoroughgoing understanding of how and why certain businesses rapidly double in value. But just finding and focusing on the doubles isn't fulfilling. Additional to that task, we'll venture out in search of a fair value for the business.

ANOTHER FOOLISH THING
Bust the Tipsters Debuts!

Hear ye! Hear ye! Fooldom is beside itself with delight as it debuts the exciting new game, Bust the Tipsters! It is hailed by many at Fool HQ as, "The most amazing interactive and educational game featuring a Foolish hero and evil stock manipulators and misinformers ever!" Check in and try to solve a new case every day, aided by Motley Fool as he tries to foil the villainous Dr. Mortimer Stocktout, Mo-Mental, The Churner, the Smile and Dial sisters, Cold-Call Pete, Pork Belly, The Whisper and The Talking Head. This fun new game pays off with education, amusement, and prizes from FoolMart. You'll find Bust the Tipsters in the Fool's School and in our Games area, with new cases six times a week. Enjoy!

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

THE DAILY NEWS CAN BE DELIVERED DIRECTLY TO ANY INTERNET E-MAIL BOX.