HEROES
Technical outerwear and apparel company NORTH FACE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TNFI)") else Response.Write("(Nasdaq: TNFI)") end if %>
ascended $1 11/16 to $23 3/8 on the strength of a "strong buy" rating from
Morgan Stanley. North Face recently reported a 38% increase in second quarter
sales, which accelerated from a 27% sales increase in its first quarter.
North Face has proved by now that it can keep up the momentum of hot sales
trends it showed in during 1992-1995. For the trailing twelve-month period,
the company had operating EPS of $0.78 and a
Fool ratio of 0.81. The shares
are up from a yearly low of $14, when investors fretted about inventory levels
and sales growth. With more investment in resource planning systems and the
human know-how to use such systems effectively, the 32% EPS growth forecast
for 1998 may be a credible target.
ITT CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ITT)") else Response.Write("(NYSE: ITT)") end if %> gained $1 13/16 to $64 3/4 after the undaunted
HILTON HOTELS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HLT)") else Response.Write("(NYSE: HLT)") end if %> raised its cash tender offer for the
gaming, hotel, and vocational education company to $70 per share, $15 per
share higher than its original $55 bid. Hilton said it would complete the
merger with a stock swap once it gains control of a majority of the company
through the cash tender offer. Investors might be a little nonplussed by
the offer, as ITT already has a $70 per share cash offer to buy back about
25% of its shares and has come to shareholders with a plan to break up the
company into three parts, which is exactly what Hilton plans on doing with
the company.
Specialty semiconductor company DATUM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DATM)") else Response.Write("(Nasdaq: DATM)") end if %> shot up
$6 1/4 to $38 3/4 after Hambrecht & Quist analyst Joe Noel pounded the
desktop once again on the company making its quarterly earnings estimates.
Last quarter, Noel hooked up the maker of atomic clocks for telecom equipment
with a "strong buy" rating due to its supply agreements with LUCENT
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> and MOTOROLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>. Noel's estimate of $0.35 per
share and the First Call mean estimate of $0.34 look doable, seeing as the
company achieved EPS of $0.36 in its second quarter ended June 30. According
the Reuters, Noel told his sales force that he thinks there is some upside
to his 1997 EPS estimate of $1.30 and 1998 estimate of $1.53.
QUICK TAKES: Enterprise resource planning software company QAD INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QADI)") else Response.Write("(Nasdaq: QADI)") end if %> popped out of the IPO box today, gaining $7 1/2 from its IPO price of $15 to close at $22 1/2... Israeli semiconductor wafer foundry TOWER SEMICONDUCTOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TSEMF)") else Response.Write("(Nasdaq: TSEMF)") end if %> gained $2 7/8 to $20 1/2 after Oppenheimer started coverage of the company with a "buy" rating... Online lottery systems company GTECH HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTK)") else Response.Write("(NYSE: GTK)") end if %> gained $3 11/16 to $33 9/16 after announcing that has terminated an agreement to acquire interactive games company NTN COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: NTN)") else Response.Write("(AMEX: NTN)") end if %>... Oil and gas exploration, production, and marketing company KCS ENERGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KCS)") else Response.Write("(NYSE: KCS)") end if %> rose $2 3/16 to $25 3/8 after reporting Q2 EPS of $0.08, missing estimates of $0.10. The company said it plans to step up exploration, adding that its Manderson Field may hold up to 80 million barrels of oil and one trillion square feet of natural gas... Closed-end mutual fund PILGRIM AMERICA BANK AND THIRIFT FUND <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PBS)") else Response.Write("(NYSE: PBS)") end if %> rose $1 5/8 to $21 5/8 after its board of directors announced a proposal to convert the fund to an open-end mutual fund... CENTRAL PARKING CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PK)") else Response.Write("(NYSE: PK)") end if %> was driven $2 7/8 higher to $40 1/8 after yesterday reporting Q3 EPS of $0.30, beating the mean estimate of $0.26. The company will also be included in the Standard & Poor's SmallCap 600 index... Oil refiner SUN CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SUN)") else Response.Write("(NYSE: SUN)") end if %> gained $2 11/16 to $38 7/16 after commenting that it expects to see improved operating earnings after completing the sale of its petroleum tankers and other vessels... BLONDER TONGUE LABORATORIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: BDR)") else Response.Write("(AMEX: BDR)") end if %> shot up $1 5/16 to $10 after the video distribution systems maker reported Q2 EPS of $0.18, beating estimates of $0.16... Tastycake baker TASTY BAKING CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: TBC)") else Response.Write("(AMEX: TBC)") end if %> gained $1 9/16 to $20 1/8 after Bear Stearns started coverage of the company with a "buy" rating.
GOATS
AQUILA GAS PIPELINE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AQP)") else Response.Write("(NYSE: AQP)") end if %> lost $13/16 to $11 3/4 after
Jefferies & Co., a brokerage respected for its oil and gas research,
lowered its rating on the company to "hold" from "buy," saying that they
see a change for the worse in the company's fundamentals. Yesterday, Aquila
reported Q2 EPS of $0.24, two cents short of the First Call mean estimate.
Donaldson, Lufkin & Jenrette also cut its rating on Aquila and lowered
its EPS estimates for 1997 to $0.90 and 1998 to $1.05. With a 25% decline
in 1998's estimate, Aquila now trades at 11 times that number, slightly below
the valuations on the larger COLUMBIA GAS SYSTEM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CG)") else Response.Write("(NYSE: CG)") end if %> and the
smaller LEVIATHAN GAS PIPELINE LP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LEV)") else Response.Write("(NYSE: LEV)") end if %>, adjusting for
dividends.
NEWBRIDGE NETWORKS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NN)") else Response.Write("(NYSE: NN)") end if %> slid $4 1/16 to $46 1/2 after the networking
products company pre-announced a "slight" decline in sequential revenue in
its first quarter due to a drop in enterprise networking product revenues.
The company said its wide area network switching product revenues were healthy,
growing 20% sequentially, with sales of its MainStreetXpress Multiservices
Switch doubling that sequential growth rate. As a result of disappointing
growth with its Vivid switched routing system and products that came from
the recently acquired UB Networks, the company says Q1 earnings will be within
5% of last quarter's earnings, putting Q1 EPS at $0.26, $0.04 per share below
the First Call mean estimate.
QUICK CUTS: EINSTEIN/NOAH BAGEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ENBX)") else Response.Write("(Nasdaq: ENBX)") end if %> lost another $1 7/16 to $10 1/4 after yesterday reporting earnings... Ceramic tile manufacturer DAL-TILE INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DTL)") else Response.Write("(NYSE: DTL)") end if %> lost $1 5/8 to $16 3/8 after reporting Q2 operating EPS of $0.04, missing estimates of $0.12. The company also took a charge for the writedown of inventories and uncollectable receivables... VDI MEDIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VDIM)") else Response.Write("(Nasdaq: VDIM)") end if %> fell $1 5/8 to $13 1/2 after the video duplication business yesterday reported Q2 EPS of $0.09, down from $0.11 last quarter... Concept restaurant ROADHOUSE GRILL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GRLL)") else Response.Write("(Nasdaq: GRLL)") end if %> fell $1 3/4 to $5 3/8 after the company's President and CEO resigned to make way for a more seasoned leader... MEGO MORTGAGE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MMGC)") else Response.Write("(Nasdaq: MMGC)") end if %> lost $1 1/4 to $12 1/4 after the consumer finance company's parent, MEGO FINANCIAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MEGO)") else Response.Write("(Nasdaq: MEGO)") end if %>, received word from the IRS that its planned spin-off of the mortgage subsidiary can take place on a tax-free basis... DESIGNER HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DSH)") else Response.Write("(NYSE: DSH)") end if %> slid $1 7/16 to $5 15/16 after the licensee of fashion names like Calvin Klein said it will take a charge against earnings of $0.43 to $0.56 per share to restructure itself... SWIFT ENERGY CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SFY)") else Response.Write("(NYSE: SFY)") end if %> declined $2 3/4 to $23 1/2 on reporting Q2 EPS of $0.28, in line with estimates.
FOOL ON THE
HILL
An Investment Opinion by Randy
Befumo
Microsoft takes a slice of Apple's pie
APPLE COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %> shot up $6 9/16 to $26 5/16 today after
being halted for dissemination of news that the war with MICROSOFT
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> is officially over. Amidst a volley of boos from diehard
Macintosh partisans, founder Steve Jobs announced to the crowd at the MacWorld
Expo that Apple's success and Microsoft's success are not mutually exclusive.
Microsoft will invest $150 million in Apple for non-voting, preferred shares
and the two companies will cross-license their respective patents, ending
a bitter patent dispute that has lasted for more than a decade.
Apple's board of directors, which has picked three Chief Executive Officers
(CEOs) in the past four years, was almost completely wiped out today by a
number of new appointments. Only a month after their last Chief Executive
Gil Amelio stepped down, four board members are slinking into that good night
to be replaced by a roster of Silicon Valley stars -- Intuit CEO Bill Campbell,
Oracle Chair Larry Ellison, former IBM Chief Financial Officer (CFO) Jerome
York, and Apple co-founder Steve Jobs. Jobs also stated that the company
would not name a Chairman at this time. Jobs had been widely rumored to be
taking the Chairman spot, and the relief of the financial community that
he did not may explain some of today's rise in Apple's stock price.
While Microsoft Chair Bill Gates won't be on the board and the stock Microsoft
purchased does not carry voting rights, he will exert significant power over
Apple's fate going forward. Apple users are still an important market for
Microsoft applications, with over eight million Microsoft Office licenses
currently on Macintoshes. Bringing Microsoft's clout to back up Apple's flagging
finances may actually do more to help Apple's market share than anything
the company could have managed on its own. Most surprisingly was Apple's
decision to now use Microsoft's Internet Explorer as its default browser,
another slam on Microsoft's Internet rival Netscape.
Microsoft in its corner or not, Apple's financials are still quite unsightly.
The company's focus on making personal computers as well as developing software
has consumed assets and led to manufacturing operations that are quite
inefficient when measured against industry peers like Dell Computer and Compaq
Computer. Although the company had the ninth-largest share of PCs manufactured
in the world last quarter, it still did not turn a dime of profit. Spinning
off its "box" making operation or selling it at a discount to the cash-rich
PC makers would be a real step towards making Apple viable in the late '90s
computer culture and possibly put quite a bit of cash into the company's
coffers. Valued at the same multiples as Compaq, Dell, Gateway, or Micron,
Apple's PC manufacturing business could be worth as much as $5 billion on
its own if it were profitable.
If the new board finally decides to spin-off or sell the PC hardware activities
-- much more likely now given that two of the four new board appointees come
from high-profile software companies -- what you have left is a software
company that, as Fool writer Dale Wettlaufer observed this morning, looks
"very much like Microsoft." Looking at market capitalization per point of
world operating system software market share, Apple is carrying a multiple
one-fifth that of Microsoft (before backing out the value of its hardware
business). Given that the Federal Trade Commission (FTC) will go a lot easier
on Microsoft if Apple remains viable and the company can still sell high-margin
applications to Apple licensees, there is really no reason why Apple could
not push its market share up a couple points at minimal cost to Microsoft.
With Apple's market capitalization only at $3.3 billion, the company apparently
out of the woods with regards to potential bankruptcy, and a board that knows
a thing or two about running a successful software company in the '90s, the
fact that the company is trading at less than 0.5 times sales is pretty
interesting. PC makers now trade at 1 to 3 times sales and software vendors
trade at 4 to 10 times sales -- hence all the activity today. The big risk,
a potential bankruptcy through mismanagement, seems to be gone for the time
being. Even after the 33% rise today, Apple Computer may still have some
legs left over the next two to three years if the board hires a worthwhile
Chief Executive and starts to run the company right. The next possible cause
for upward movement? A plan to focus the company on some segment of the PC
market or the announcement of a Chief Executive. The next possible cause
for downward movement? Poor results or the defection of some of the new board
members. Investors should sharpen their pencils and start crunching the numbers.
CONFERENCE CALLS
MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> and
APPLE COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %>
Re: product and technology development agreement
(800) 456-5304 (code: 8797) -- replay through 8/8 @ 5:00 pm EDT
(402) 344-6835 -- replay for international callers
RAINFOREST CAFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %>
(402) 222-9939 -- replay
TIDEWATER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TDW)") else Response.Write("(NYSE: TDW)") end if %>
(800) 475-6701 (#348218) -- replay
PAPA JOHN'S PIZZA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PZZA)") else Response.Write("(Nasdaq: PZZA)") end if %>
(800) 642-1687 (ask for Papa John's Int'l conference call) -- replay
CREE RESEARCH <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CREE)") else Response.Write("(Nasdaq: CREE)") end if %>
(800) 642-1687 (code: 523215) -- replay
(706) 645-9291 (code: 523215) -- replay for international callers
MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>
Re: introduction of NetShow server 2.0
(800) 677-0672 -- replay through 8/7
(402) 998-0101 -- replay for international callers
BA MERCHANT SERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BPI)") else Response.Write("(NYSE: BPI)") end if %>
(800) 964-3941 -- replay through 8/7
(402) 344-6640 -- replay for international callers
AMRION INC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMRI)") else Response.Write("(Nasdaq: AMRI)") end if %> and
WHOLE FOODS MARKETS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WFMI)") else Response.Write("(Nasdaq: WFMI)") end if %>
(800) 633-8284 (code: 2979188) -- replay through 8/7
AMERICAN RADIO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AFM)") else Response.Write("(NYSE: AFM)") end if %>
(800) 475-6701 (access code: 350455) -- replay through 8/8
CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>
(800) 633-8284 (code: 2875731) -- replay through 8/15
08/07/97 (Thursday)
SARA LEE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLE)") else Response.Write("(NYSE: SLE)") end if %>
(402) 220-3124 -- replay through 8/14
THIS WEEK'S CONFERENCE CALL SYNOPSES
CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>
Call
OXFORD HEALTH <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OXHP)") else Response.Write("(Nasdaq: OXHP)") end if %>
Call
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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