HEROES

GOULDS PUMPS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GULD)") else Response.Write("(Nasdaq: GULD)") end if %> hit the jackpot, gaining $13 5/16 to $36 3/16 after snaring fat daddy ITT INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IIN)") else Response.Write("(NYSE: IIN)") end if %> to take over the company for $37 per share in cash, or $929 million on an enterprise value basis. ITT wants to pick up the company to lessen its dependence on lower-performance sectors in automotive products and defense electronics, and to concentrate on its fluid technology business, which brings 25% more sales dollars to the operating margin line than other business segments. Goulds, not coincidentally, runs near the operating margin of ITT's fluid technology operating margin in the mid-8% range. The effective sale price of the firm values Goulds at 1.2 times sales, 15 times gross cash flow, and 35 times free cash flow.

Norwegian industrial Sasquatch NORSK HYDRO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NHY)") else Response.Write("(NYSE: NHY)") end if %> gained $3 7/8 to $49 3/4 after reporting Q1 earnings per share (EPS) of $1.01. Although the company is little noticed in the U.S., it does about $3.5 billion a quarter in revenues and is no small fish in the oil & gas business. So why, with one of its mainstays -- fertilizer -- being flat, did the company attract Wall Street's attention today? Oil and gas, the chic sector still, accounted for just about 61% of the company's operating income while only accounting for 20% of revenues. The 40.5% operating margin in the oil & gas segment, the company's second-largest business, beat the fertilizer and agriculture segment's operating margin of about 8% with a stick.

QUICK TAKES: SILICON GRAPHICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGI)") else Response.Write("(NYSE: SGI)") end if %> rebounded $1 1/4 to $14 1/8 after reporting lower-than-expected earnings on Friday and being downgraded by several analysts... UNITED AUTO GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UAG)") else Response.Write("(NYSE: UAG)") end if %> gained $1 1/4 to $18 3/8 as the auto retailer's founder, Marshall Cogan, is reported to be planning on spending more time with the company after stepping down as Chair and CEO at FOAMEX INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FMXI)") else Response.Write("(Nasdaq: FMXI)") end if %>... Oil and gas exploration and production company NOBLE AFFILIATES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NBL)") else Response.Write("(NYSE: NBL)") end if %> rose $1 7/8 to $35 3/8 on reporting Q1 EPS of $0.67, which missed estimates... STONE ENERGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGY)") else Response.Write("(NYSE: SGY)") end if %> regained $1 1/4 to $25 after the oil and gas company announced that it has brought under control a blown-out well off the coast of Louisiana.

GOATS

Disk drive suspension assembly company HUTCHINSON TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HTCH)") else Response.Write("(Nasdaq: HTCH)") end if %> fell $5 1/2 to $26 3/8 after reporting Q2 EPS of $0.91, which beat estimates of $0.88. Investors might be worried about the company's statement that it is behind in its Trace Suspension Assembly (TSA) capacity plans, and that the TSA will probably take more than $0.35 out of EPS in Q3, which was also the EPS impact this quarter. Hutchinson says that it is running full out, and even with capacity expansions it lost market share because it just cannot feed the monster demand in the drive industry right now. Even moving TSA costs into the cost of goods sold line, the company's 31% gross margin was extremely strong. Normally cautious at this time of the year, the company's officers said they really don't see a drop-off in demand on the horizon.

3COM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> lost $2 7/8 to $26 3/8 as INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> announced yet another strike at one of the networking company's product lines. Reminiscent of Intel's announcement a little more than 60 days and 25 points ago for 3Com, Intel released pricing on its ethernet/fast ethernet stackable hubs aimed at a mainstay of 3Com's product line, the SuperStack and Superstack II dual speed hubs. In addition to price erosion in network interface cards, 3Com talked about severe pricing pressures in this segment in its Q3 conference call. With Intel breathing down 3Com's neck wanting to drive down the price of goods complementary to Intel's high-margin CPUs, 3Com investors are feeling battered once again today.

Teleservices company APAC TELESERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APAC)") else Response.Write("(Nasdaq: APAC)") end if %> was squashed for a $10 3/8 loss to $11 1/8 after the company said it is eating costs on a contract with a large outsourcing client. Some are wondering if this contract is with Farmer's Insurance, which is a large contract announced earlier this year, or if it is with AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>, which accounted for more than a third of the company's revenues in 1996. Optimists believe that the company wouldn't eat these costs unless it gives them revenue and earnings visibility down the road. Pessimists think taking the costs may be a desperation tactic. Either way, the announcement also took down much of the industry, including PRECISION RESPONSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRRC)") else Response.Write("(Nasdaq: PRRC)") end if %>, TELETECH HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TTEC)") else Response.Write("(Nasdaq: TTEC)") end if %>, SITEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SWW)") else Response.Write("(Nasdaq: SWW)") end if %>, WEST TELESERVICES CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WTSC)") else Response.Write("(Nasdaq: WTSC)") end if %>, and SYKES ENTERPRISES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SYKE)") else Response.Write("(Nasdaq: SYKE)") end if %>.

QUICK CUTS: AUTOIMMUNE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AIMM)") else Response.Write("(Nasdaq: AIMM)") end if %> crashed $9 7/16 to $4 5/16 after the biopharmaceutical company announced poor Phase III trial results for its multiple sclerosis treatment... Medical device maker IMAGYN MEDICAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IGYN)") else Response.Write("(Nasdaq: IGYN)") end if %> slumped $1 5/8 to $7 1/2 on agreeing to merge with UROHEALTH SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UROH)") else Response.Write("(Nasdaq: UROH)") end if %> in a stock swap valuing each Imagyn share at 1.0358 shares of UroHealth... TRIKON TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TRKN)") else Response.Write("(Nasdaq: TRKN)") end if %> lost $2 1/2 to $7 3/4 after pre-announcing a "significant" Q1 loss... Youth prison company YOUTH SERVICES INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YSII)") else Response.Write("(Nasdaq: YSII)") end if %> lost $1 7/8 to $11 1/8 on announcing a Q3 loss of $0.03 to $0.06 per share, missing estimates of $0.12... LUNAR CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LUNR)") else Response.Write("(Nasdaq: LUNR)") end if %> was shorn $9 1/4 to $20 after the diagnostic products company reported Q1 EPS of $0.36, missing estimates by a penny per share... Computer printer company LEXMARK INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LXK)") else Response.Write("(NYSE: LXK)") end if %> fell $2 1/8 to $21 1/2 after reporting Q1 operating EPS of $0.40, meeting estimates partly through skimping on R&D spending... U.S. FRANCHISE SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USFS)") else Response.Write("(Nasdaq: USFS)") end if %> lost $2 1/4 to $5 1/4 after the hotel franchising company said it doesn't expect to become profitable until the fourth quarter of 1998... Mortgage lender RESOURCE BANCSHARES MORTGAGE GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: REMI)") else Response.Write("(Nasdaq: REMI)") end if %> lost $1 7/8 to $14 7/8 after the company announced an agreement to merge with private lender Walsh Holding Co... COMPDENT CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CPDN)") else Response.Write("(Nasdaq: CPDN)") end if %> was bitten for a $5 1/4 loss to $15 1/4 as investors in the dental plan company are feeling squeamish about the upcoming earnings report... CENTOCOR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNTO)") else Response.Write("(Nasdaq: CNTO)") end if %> lost $6 3/4 to $23 3/4 after marketing partner ELI LILLY & CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LLY)") else Response.Write("(NYSE: LLY)") end if %> reported weaker-than-expected sales of ReoPro, an anti-clotting drug... Swedish pharmaceutical company ASTRA AB <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: A)") else Response.Write("(NYSE: A)") end if %> sank $3 5/8 to 41 3/8 on reporting lower-than-expected Q1 earnings... REYNOLDS & REYNOLDS CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: REY)") else Response.Write("(NYSE: REY)") end if %> slid $2 1/2 to $20 after the information management systems company reported Q2 EPS of $0.31, missing estimates by a penny per share... Integrated circuit designer and manufacturer ZILOG INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZLG)") else Response.Write("(NYSE: ZLG)") end if %> fell $2 1/2 to $21 after reporting Q1 EPS of $0.23, beating estimates of $0.22 per share... JOHN H. HARLAND CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JH)") else Response.Write("(NYSE: JH)") end if %> fell $1 3/4 to $21 1/8 after the check printer and financial software company reported Q1 operating EPS of $0.21, missing estimates of $0.22.

FOOL ON THE HILL
An Investment Opinion by MF Templr

DELL-EMMA

DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> has long represented a curious investment dilemma. Despite the fact that the Austin, Texas-based direct-retailer of computer systems has seen astounding annual sales growth of 46% over the past seven years, the company has only recently been able to sustain a price/earnings ratio above the high teens. Hand-wringing about the hyper-competitive nature of the personal computer businesses and complaints about its commodity nature have caused institutional investors to regularly opt for shares of INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> when investing in the computer hardware business, avoiding Dell entirely.

Although Intel investors over the past seven years are hardly an unhappy bunch, the company's 24% annual revenue growth pales in comparison to the numbers that Dell has regularly churned out. In fact, Dell has consistently grown faster than the PC industry every year for the past seven, including the disastrous attempt in 1995 to sell Dell machines through the conventional retail channel. Growing your revenues faster than the PC business almost guarantees that you will grow your revenues faster than Intel -- despite the Dell's high-profile efforts in networking and connectivity, the bulk of the company's humongous revenues come from the sale of personal computer gear. In fact, analysts have jokingly referred to Dell and GATEWAY 2000 <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GATE)") else Response.Write("(Nasdaq: GATE)") end if %> for years as "Intel's retail arm."

So if Dell can consistently grow revenues faster than Intel, why would anyone want to own Intel. Herein lies the investment dilemma. While Dell has perfected the custom-built, direct mail PC business, fine-tuning the corporation to become an incredibly efficient cash-generating machine, its margins still trail Intel's. Despite Dell's dramatic surge in operating margin in its last fiscal quarter to 10.4% from 6.1% a year ago, this is far less than Intel's 44.5% operating margins. While Dell might be more efficient in generating cash, Intel generates quite a bit more for every dollar of sales. Operating margins can be directly correlated to the company's efficiency and the level of competition it faces in its basic business.

Dell will grow faster than Intel, but Intel will have better margins than Dell. Which one of these factors will be more important to investors over the next few years? Although one can make valid arguments either way, history tells us that sales and earnings growth correlate pretty well with stock price appreciation -- as is the case with Intel and Dell. Dell investors have enjoyed an eye-popping return of 1300% over the past three years compared to Intel's healthy 340.8%. Even taking it back five years to include Dell's indirect sales debacle still has Dell with a healthy lead, generating a 1073.3% return over the past five years versus Intel's 906.4%. While a company with higher margins can sustain a premium valuation, earnings growth in the basic business is what ultimately drives the stock price forward.

So what does all of this mean? That perhaps all of the institutional money pouring into Intel might be better spent buying a little bit of Dell as well. With arch-rival COMPAQ <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> recently validating Dell's direct-sales model by starting to copy it in order to improve its cash management, it no longer appears that the direct-sales business is the orphan of the industry. Dell's focus on business customers and second-time computer buyers ensures a knowledgeable clientele willing to pay a slight premium for quality, controlling to some degree the risk of irrational pricing that pervades the industry. Finally, despite Compaq's best attempts to improve its inventory turns and cash generation, Dell remains solidly ahead of it in minimizing the amount of working capital it needs to run its basic business.

Even at its 52-week high, things look quite good for Dell. Strong sales of Pentium-class microprocessors and Office 97 software augur a strong business upgrade cycle again this year. Much of Office 97's new functionality comes at the expense of its being a memory hog, requiring bigger and better PCs to handle the load. Component prices have stayed well below their 1995 highs, meaning that current consensus analyst estimates for the first quarter might be a little out of whack. Dell earned $1.01 per share last quarter, but because of component price increases and price reductions on its products, analysts only expect $0.89 per share this quarter. Should Dell blow past these expectations, the $4.07 per share that is currently expected for the full year might become old news.

With Michael Dell out-front stating the PC industry will enjoy 20% growth this year due to improvements in central processing units and new productivity enhancing software, it is clear his underlying message is that Dell can easily double that rate of growth. With stable pricing for components, the company can continue to grow the bottom line disproportionately, generating cash to continue its systematic repurchase of shares. When faced with purchasing shares of an Intel that sees flat revenue growth next quarter and falling margins next year, Dell becomes a heck of a lot more attractive conceptually.

CONFERENCE CALLS

MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>
(800) 456-5304 (passcode: 1017) -- replay through 4/21
NetShow Live Call and Replay: http://www.microsoft.com/msft/

IOMEGA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IOM)") else Response.Write("(NYSE: IOM)") end if %>
(800) 633-8284 (reservation # 2593689)
Replay from 6:30 PM ET through 4/23

360 COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XO)") else Response.Write("(NYSE: XO)") end if %>
(402) 220-3014 -- replay through 4/22

SUN MICROSYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %>
(800) 633-8284 (reservation # 2584848) -- replay avail through 4/22

APPLIED DIGITAL ACCESS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADAX)") else Response.Write("(Nasdaq: ADAX)") end if %>
(402) 220-6032 -- replay through 4/22

TRIBUNE CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TRB)") else Response.Write("(NYSE: TRB)") end if %>
(800) 633-8284 (reservation # 2649134) -- replay available 4/21

AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>
replay after 11:00 a.m. EDT
(800) 475-6701 (code: 338707)
(320) 365-3844 (code: 338707) -- outside US

IONA TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IONAY)") else Response.Write("(Nasdaq: IONAY)") end if %>
replay available after 1:00 p.m. EDT for 5 days
(800) 475-6701 (code: 338970)
(320) 365-3844 (code: 338970) -- outside US

RTW INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RTWI)") else Response.Write("(Nasdaq: RTWI)") end if %>
replay available from 2:00 p.m. EDT through 4/28
(800) 475-6701 (code: 338849)
(320) 365-3844 (code: 338849) -- outside US

FIRST TEAM SPORTS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FTSP)") else Response.Write("(Nasdaq: FTSP)") end if %>
replay available through 4/23 @ 6PM ET
(800) 633-8284 (reservation # 2659843)

04/22/97 (Tuesday)
FORCENERGY INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FGAS)") else Response.Write("(Nasdaq: FGAS)") end if %>
(800) 475-6701 (code: 338955) -- replay avail. through 4/29
(320) 365-3844 (code: 338955) -- replay (outside US)

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FOOL FEATURES

The Nasdaq Speaker Series presents Scott Cook, Chairman of INTUIT INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTU)") else Response.Write("(Nasdaq: INTU)") end if %>, one of the all-time most successful software companies in the universe. The company's Quicken products have ascended to a dominant position in the personal finance software arena while other applications, such as TurboTax, have made filing taxes and working on your personal bookkeeping almost fun. Cook will address investor questions this Tuesday, April 22nd at 9PM in the Nasdaq auditorium here in the Fool.

ANOTHER FOOLISH THING
Ask the Headhunter!

What should you ask him? Anything you want to know about how to Foolishly land a job you'll like or hire people you'll like. Nick Corcodilos is our resident job search expert, and he's eager to let you in on interviewing secrets, necessary job-hunting skills, and mistakes that kill (like relying on your resume). Learn how to win the job by doing the job! You can ask him questions in his message folder and then read his responses to you and others. And if you just can't get enough, 'cuz he's got some great stuff -- you can even order his book, praised by management Tom Peters and many others. Why not earn your Foolish investing seed money at a job you like? Ask the Headhunter!

Randy Befumo (TMF Templr), a Fool
Fool Plate Special

Dale Wettlaufer (TMF Ralegh), another Fool
Ups & Downs

Brian Bauer (TMF Hoops), and yet another Fool
Editing