HEROES
WELLMAN INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLM)") else Response.Write("(NYSE: WLM)") end if %> was boosted $1 1/2 to $21 1/4 after Merrill
Lynch raised its rating on the maker of recycled plastic container and polyester
products to "accumulate" from "hold." According to Dow Jones, the upgrade
was in reaction to the sale by U.K. chemicals company IMPERIAL CHEMICAL
INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ICI)") else Response.Write("(NYSE: ICI)") end if %> of a similar business to DUPONT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DD)") else Response.Write("(NYSE: DD)") end if %>. Imperial Chemical gained $3 5/8 to $59 7/8.
NETSCAPE COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> picked up $5 7/8 to $44 3/4
after announcing a new product pricing structure and that it will be selling
software packages with less than 500 seats through distributors rather than
directly. Since server suite software pricing was a concern in the analyst
downgrades that dropped Netscape earlier this year, at least one analyst
raised his rating on the company today. According to Reuters, analyst Jamie
Kiggen at Cowen & Co. raised his firm's rating on the company to "strong
buy" from "buy," saying the company is successfully emerging from a six-month
long product transition.
Telecommunications software company GENESYS TELECOMMUNICATIONS LABORATORIES
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GCTI)") else Response.Write("(Nasdaq: GCTI)") end if %> jumped $4 1/4 to $29 7/8 after Goldman Sachs and Lehman
Brothers both initiated coverage of the company with "recommended for purchase"
and a "buy" ratings, respectively. Both brokerages were involved in the
underwriting of the stock's recent initial public offering.
WORLD AIRWAYS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WLDA)") else Response.Write("(Nasdaq: WLDA)") end if %> took off for a $1 7/16 gain to $7 9/16
after the cargo and charter airline said that customer Philippine Airlines
will pay its rent. Last week, the stock took a hit when that company, one
of World Airways' largest customers, did not cough up the bucks for its July
rent. Compounding that good news today was the company's announcement that
it has initiated a relationship with Brazilian airline VASP, under which
World Airways will fly both cargo and passengers for that company, "one of
the largest and most rapidly growing airlines in Latin America." Alex. Brown
raised its rating on World Airways to "buy" from "market perform."
QUICK TAKES: DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> added $4 7/8 to $142
7/8, INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> picked up $1 3/4 to $78 3/4, and MICROSOFT
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> jumped $6 3/16 to $135 15/16 in advance of Intel's second
quarter earnings release tomorrow... Biopharmaceutical company AVIRON
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AVIR)") else Response.Write("(Nasdaq: AVIR)") end if %> rose $3 3/4 to $17 1/8 on announcing positive test results
from a study measuring the efficacy of an influenza vaccine delivered via
a nasal spray instead of by injection...
Fool Portfolio holding INNOVEX
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INVX)") else Response.Write("(Nasdaq: INVX)") end if %> gained $1 3/4 to $30 3/8 after the disk drive lead wire
assembly manufacturer reported Q3 EPS of $0.72, beating estimates of $0.70...
DIGITAL LIGHWAVE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DIGL)") else Response.Write("(Nasdaq: DIGL)") end if %> rose
$2 to $10 1/4 after SoundView Financial rated the telecommunications computer
systems company a "short-term buy"... GLOBAL PHARMACEUTICAL CORP.
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GLPC)") else Response.Write("(Nasdaq: GLPC)") end if %> gained $1 1/8 to $6 7/8 after the generic pharmaceutical company's
Philadelphia, Pennsylvania plant received a bill of good health from the
FDA... Information technology services company COMPLETE BUSINESS SOLUTIONS
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CBSL)") else Response.Write("(Nasdaq: CBSL)") end if %> rose $5 3/8 to $32 1/8 after entering into a strategic
partnership with data marketing, research, and teleservices company The Phoenix
Group.
SRAM semiconductor company ALLIANCE SEMICONDUCTOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALSC)") else Response.Write("(Nasdaq: ALSC)") end if %> gained
$1 3/16 to $9 on a rating upgrade to "buy" from "hold" from Hambrecht &
Quist, whose analyst noted that the true value of the company's equity interest
in Taiwan's United Microelectronics Corp. is not reflected on the balance
sheet... INTERSOLV <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ISLI)") else Response.Write("(Nasdaq: ISLI)") end if %> added $1 3/8 to $11 11/16 after
the application enablement software company said SELECT SOFTWARE TOOLS
PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SLCTY)") else Response.Write("(Nasdaq: SLCTY)") end if %> will take over support of Intersolv's Excelerator
series of software... Flexible circuitry manufacturer ADFLEX SOLUTIONS
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AFLX)") else Response.Write("(Nasdaq: AFLX)") end if %> rose $3 to $21 7/8 on a general upsurge in the shares
of disk drive manufacturers and component suppliers...
Arizona
Stock Analysis holding THREE-FIVE SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TFS)") else Response.Write("(NYSE: TFS)") end if %> added another
$4 1/8 to $22 11/16 after the LCD manufacturer reported a 30% increase in
Q2 revenues and a momentous rise in EPS... Data transmission company AT
HOME CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ATHM)") else Response.Write("(Nasdaq: ATHM)") end if %> gained $5 1/4 to $22 1/4 after Friday's successful
initial public offering... Electronics components manufacturer AVX CORP.
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AVX)") else Response.Write("(NYSE: AVX)") end if %> moved up $3 5/8 to $33 7/16 on reporting Q1 EPS of $0.40, beating
estimates of $0.37, up 8.1% over last year... NEWPORT NEWS SHIPBUILDING
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NNS)") else Response.Write("(NYSE: NNS)") end if %> added $1 3/4 to $22 after the nation's largest shipbuilder
reported Q2 EPS of $0.39, in line with estimates, as well as a backlog that
now stands at $3.4 billion... Networking products company ASCEND
COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %> rose $4 11/16 to $52 11/16 after Goldman
Sachs initiated coverage and added the shares on its "recommended list."
ARVIN INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARV)") else Response.Write("(NYSE: ARV)") end if %> rose $1 7/8 to $30 3/8 after the automotive
components manufacturer reported an 8.4% increase in Q2 sales and EPS of
$0.91, beating estimates of $0.78... HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %> climbed
$4 1/16 to $65 1/16 on signing an electronic commerce marketing pact with
another Dow Jones Industrial Average component company, AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>... FIRST FEDERAL SAVINGS BANK OF PUERTO RICO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FBP)") else Response.Write("(NYSE: FBP)") end if %> gained
$1 7/16 to $26 3/4 after last week reporting an 11% rise in second quarter
EPS... Property and casualty insurance underwriter RLI CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RLI)") else Response.Write("(NYSE: RLI)") end if %> cashed in on a 27% increase in Q2 EPS, gaining $1 3/4 to $36 1/2...
Advertising sales company KATZ MEDIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: KTZ)") else Response.Write("(AMEX: KTZ)") end if %> rose $1 7/16 to $9
1/16 after the company said a number of parties have approached the company
about the possibility of a corporate transaction... ADVANCED MAGNETICS
<% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: AVM)") else Response.Write("(AMEX: AVM)") end if %> gained $1 1/16 to $12 1/16 on announcing that a partner in
Japan has received marketing approval for a liver contrast agent from the
Japanese federal government... MEDICIS PHARMACEUTICAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MDRX)") else Response.Write("(Nasdaq: MDRX)") end if %>
gained $4 1/2 to $54 after the dermatological products company was added
to the Russell 2000 Index. This morning the company also announced a product
development agreement with ABBOTT LABS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABT)") else Response.Write("(NYSE: ABT)") end if %>... ELECTRONIC
DATA SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EDS)") else Response.Write("(NYSE: EDS)") end if %> moved up $2 5/16 to $44 13/16 on a Morgan Stanley
upgrade to "outperform" from "neutral."
GOATS
HCIA INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HCIA)") else Response.Write("(Nasdaq: HCIA)") end if %> was the major loser on the Nasdaq today,
losing $16 3/8 to $15 5/8. The healthcare information software company announced
this morning that it failed to close on several large contracts and that
it expects to record a Q2 loss of $0.15 to $0.18 per share, below estimates
of $0.30 per share. The company said that it will make these sales in the
coming quarters, and as a consequence, will show sequential earnings improvements
in those quarters. Having disappointed investors on a number of occasions
in this way, the company may not win multiples to earnings estimates as high
as it historically has or as high as peer group companies. Investors might
give HCIA more chances, but one might want to keep in mind the increased
skepticism that these disappointments can engender.
VIISAGE TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VISG)") else Response.Write("(Nasdaq: VISG)") end if %> dropped
$2 to $14 1/2 after the biometric identification systems company said that
it expects to report record revenues and EPS of $0.08 in its second quarter,
which will fall below EPS estimates of $0.10. The company said the shortfall
results from the timing of public sector contract awards, such as the company's
recently announced contract to provide the state of Illinois with a digital
drivers' license system. In addition to providing Illinois with such systems,
the company also counts Massachusetts, Wisconsin, Ohio, North Carolina, New
Mexico, and Arizona among its clients.
QUICK CUTS: ACXIOM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACXM)") else Response.Write("(Nasdaq: ACXM)") end if %> lost $1 7/8 to $18 1/8 after the data services company reported EPS of $0.09, in line with estimates, on a 7% increase in quarterly revenues... Cancer diagnostics products company NEOPROBE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NEOP)") else Response.Write("(Nasdaq: NEOP)") end if %> lost $1 to $13 3/8 after issuing an update on its regulatory filings and announced FDA clearance of its Neoprobe 1500 instrument... Sporting goods retailer SPORTS AUTHORITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSA)") else Response.Write("(NYSE: TSA)") end if %> fell $1 11/16 to $19 on pre-announcing Q2 EPS of $0.30, up only 3.4% over last year and below the mean analyst estimate of $0.34... DISCREET LOGIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DSLGF)") else Response.Write("(Nasdaq: DSLGF)") end if %> declined $1 3/4 to $19 7/8 after the video editing systems company last week announced the acquisition of a company that offers editing systems on the Windows NT platform... Semiconductor equipment company SILICON VALLEY GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SVGI)") else Response.Write("(Nasdaq: SVGI)") end if %> lost $2 1/4 to $31 3/4 amidst takeover rumors, some of which have APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %> as the potential buyer... GENERAL CIGAR HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MPP)") else Response.Write("(NYSE: MPP)") end if %> fell $1 11/16 to $23 5/16, continuing its slide after last week reporting apparently disappointing Q2 results, which also took down merger partner CULBRO CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBO)") else Response.Write("(NYSE: CBO)") end if %> $7 3/16 to $103 1/4 today.
FOOL ON THE
HILL
An Investment Opinion by Randy
Befumo
Crown, a Jewel?
Sitting squarely 'twixt its 52-week high and low, CROWN CORK & SEAL
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCK)") else Response.Write("(NYSE: CCK)") end if %> hardly looks like a global leader. As North America's largest
packaging company, Crown Cork & Seal is actually one of the few quality,
industry leaders whose shares do not trade within a few percentage points
of their all-time highs. While aluminum beverage can manufacturer
ALCOA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AA)") else Response.Write("(NYSE: AA)") end if %> and paper packaging monstrosity INTERNATIONAL
PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> have both enjoyed a renaissance of late, shares of Crown
Cork & Seal have been left behind by the soaring indexes.
Truth be told, only a few days ago Crown Cork & Seal was bouncing against
new highs just like its more commoditized peers. This was before it released
second quarter earnings Thursday evening that missed consensus estimates
by a dime. Crown, Cork & Seal reported earning $0.94 per share on $2.29
billion in revenue, well below the $1.04 EPS that analysts had been anticipating.
Shares of the company closed down $6 and change to end up at $49 15/16 in
one vicious round of trading on more than eight times normal volume.
On their own merits, the results for Crown, Cork & Seal were encouraging.
Although second quarter net sales were marginally lower than last year due
to currency exchange rates, earnings increased 27% from $0.74 EPS. Some analysts,
in fact, accused others of being far too optimistic, as the company's continuing
integration of its French-based CanaudMetalbox unit acquired in 1995 is bound
to produce a few bumps. Considering Crown is growing at 27% in an industry
that has posted 12% increases, it ain't doing all that bad. Analysts had
initially been encouraged by the quick integration Canaud when in the second
quarter of last year Crown beat EPS expectations by six cents, or 8.5%.
Although it is causing some earnings volatility, Crown's acquisition of Canaud
is key to its long-term strategy of providing worldwide packing solutions
to its major customers. Rather than forcing a company like Frito-Lay to negotiate
separate deals with different packaging companies in various countries, by
having a worldwide presence Crown and other packaging companies like
Owens-Illinois and Bemis Corp. can reduce the relationship to one partner.
This and better-than-expected earnings helped Crown to rise from $43 and
change last year to the high $50s, an altitude that the company was able
to maintain until Friday.
Reacting to this disappointment, Goldman Sachs analyst Cornelius Thornton
cut his fiscal 1997 estimates to $2.85 EPS and his fiscal 1998 estimates
to $3.50 EPS. Daniel Khoshaba of Salomon Brothers sliced his 1997 estimate
to $2.45 EPS and chopped his 1998 estimate from $4.50 EPS all the way down
to $3.35 EPS, a 26% drop. Much of the estimate trimming may be a result of
analysts reconsidering how much Crown can grow its revenues. Profit margins
increased from 5.8% last year to 7.4% in the fourth quarter, solid margins
that would make any PC manufacturer proud. The shrinking revenues due to
the strong dollar and passing on commodity price benefits to customers was
probably the part that had analysts confused.
Should Crown Cork & Seal continue to show lumpy earnings growth and flat
revenues, even the $3.35 to $3.50 EPS estimates for next year will still
leave the company trading at 14 to 15 times earnings. With flat revenues,
the company needs to improve net margins to 4.8% for the year versus 3.5%
in the year ago period to make those numbers, an increase that seems reasonable
given the second quarter performance. Should Crown get lumpy the other way,
investors might enjoy some of the same kind of returns that glass packaging
maker OWENS ILLINOIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OI)") else Response.Write("(NYSE: OI)") end if %> has shown over the past year, more
than doubling and still only trading at 15 times forward earnings. Crown
also pays a 1.7% yield and currently has a
dividend reinvestment plan.
Note: Motley Fool columnist and research director Randy Befumo (TMF
Templr) will be speaking tonight at the Capitol
PC User Group's monthly meeting in Bethesda, Md. The meeting begins at
7 p.m. at the National Institutes of Health, Masur Auditorium, Clinical Center,
Building 10, 9000 Rockville Pike, Bethesda, MD. The meeting is free and open
to the public.
CONFERENCE CALLS
HEILIG-MYERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HMY)") else Response.Write("(NYSE: HMY)") end if %>
(Re: June sales and the purchase of Mattress Discounters)
(804) 254-3939 (option 1) -- replay
07/15/97 (Tuesday)
HARLEY-DAVIDSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HDI)") else Response.Write("(NYSE: HDI)") end if %>
(402) 222-9905 -- replay
07/16/97 (Wednesday)
Ford <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %>
(703) 736-7362 -- replays @ 12:00 p.m. EDT on 7/16 and 2:00 p.m. EDT on
7/17
07/16/97 (Wednesday)
360 Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XO)") else Response.Write("(NYSE: XO)") end if %>
(402) 220-3014 -- replay available through 7/23
07/16/97 (Wednesday)
Alliance Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALSC)") else Response.Write("(Nasdaq: ALSC)") end if %>
5:00 p.m. EDT
07/16/97 (Wednesday)
Apple Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %>
(816) 650-0766 (Password: Apple Conference Call) -- replays on 7/16 @ 7:00
p.m. and 9:00 p.m. EDT, and on 7/17 @ 12:00 noon EDT
THIS WEEK'S CONFERENCE CALL SYNOPSES
MOTOROLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %>
Call
SEAGATE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %>
Call
WE
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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