HEROES

NEWBRIDGE NETWORKS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NN)") else Response.Write("(NYSE: NN)") end if %> jumped $4 5/16 to $60 1/8 after announcing today that Telecom New Zealand had selected its MainStreetXpress asynchronous transfer mode (ATM) architecture to construct a national network. The five-year, multi-million dollar supply agreement with both Newbridge and Siemens AG covers the entire MainStreetXpress product line, which is a suite of ATM products. In addition, Castleton Network Systems Corp. also announced today the signing of a "royalty-based Development Project Agreement and Software Licensing Agreement" with Newbridge. ASCEND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %> gained $1 3/16 to $35 15/16 after announcing late Tuesday that 150 of its carrier-class B-STDX 9000 Multiservice Frame Relay switches and CBX 500 ATM switches had been selected by Japan's NIPPON TELEGRAPH & TELEPHONE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NTT)") else Response.Write("(NYSE: NTT)") end if %> for use in beefing up its network.

In earnings-related news, the number one maker of oscilloscopes, TEKTRONIX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TEK)") else Response.Write("(NYSE: TEK)") end if %>, charged up $5 to $67 3/8 after yesterday reporting 1Q EPS of $0.80, beating estimates of $0.79. High volume transaction processor NATIONAL DATA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NDC)") else Response.Write("(NYSE: NDC)") end if %>  rose $2 1/8 to $40 1/2 after posting 1Q EPS of $0.38, versus estimates of $0.37, with a rise in revenue to $120.1 million. That represents 19% growth compared to revenue for the first quarter of last year. One of the largest makers of rebuilt engines, BONDED MOTORS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BMTR)") else Response.Write("(Nasdaq: BMTR)") end if %>, motored ahead $1 1/2 to $8 1/2 even though it said that third quarter results will be significantly below expectations.

QUICK TAKES: Newspaper concern NEW YORK TIMES CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NYT.A)") else Response.Write("(NYSE: NYT.A)") end if %> rose $3 1/4 to $54 1/2 after it promoted some fiscally savvy personnel -- Laura J. Corwin moved to vice president and will retain her position of corporate secretary and Ellen Taus was promoted to treasurer from assistant treasurer... ORION CAP CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OC)") else Response.Write("(NYSE: OC)") end if %> said it will begin a tender offer for the approximately 2.9 million shares of insurance company GUARANTY NATIONAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GNC)") else Response.Write("(NYSE: GNC)") end if %> not already owned by Orion at $34 each, which boosted shares of Guaranty $2 1/16 to $34 9/16... Salomon Brothers analyst Rick Weingarten raised his rating on transaction processor FIRST DATA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FDC)") else Response.Write("(NYSE: FDC)") end if %> to a "strong buy" from a "buy," moving shares up $1 7/8 to $38 1/2... DOW JONES & CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DJ)") else Response.Write("(NYSE: DJ)") end if %> launched $2 3/8 to $48 1/4 after announcing the creation of a customizable enterprise-wide business news and research solution dubbed "Dow Jones Interactive"... U.S. FILTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: USF)") else Response.Write("(NYSE: USF)") end if %> dropped a bombshell on Australian-based MEMTEC LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MMTCY)") else Response.Write("(Nasdaq: MMTCY)") end if %> yesterday evening when the Palm Desert, California-based water filtration consolidator bid $30 a share for the company, boosting Memtec shares $9 1/2 to $34 1/8.

SEER TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEER)") else Response.Write("(Nasdaq: SEER)") end if %>, a component-based application developer, moved $1 1/2 to $7 5/8 after announcing that it it will launch a middleware offering called "NetEssential"... Shares of magnetic storage disk maker KOMAG INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KMAG)") else Response.Write("(Nasdaq: KMAG)") end if %> spun $3 3/16 higher to $21 7/16 as Montgomery Securities analyst Paul Fox raised his rating to "buy" from "hold" and set a one-year price target of $30-$40... Computer marketer ELEK-TEK <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELEK)") else Response.Write("(Nasdaq: ELEK)") end if %> said it has agreed to sell its assets for $43 million to computer reseller CREATIVE COMPUTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MALL)") else Response.Write("(Nasdaq: MALL)") end if %>, which subsequently rose $1 7/8 to $13... On the heels of Tuesday's announcement that it will see record third quarter results, MONARCH CASINO & RESORT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCRI)") else Response.Write("(Nasdaq: MCRI)") end if %> gained $1 to $8 today on reiterating its earnings expectation of $0.15-$0.17 per share for the quarter... International long distance provider STAR TELECOMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STRX)") else Response.Write("(Nasdaq: STRX)") end if %> shot skyward $2 3/4 to $22 1/8 after Furman Selz started coverage on the company with a "buy" rating and added it to its recommended list... DATA RACE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RACE)") else Response.Write("(Nasdaq: RACE)") end if %> sped $1 1/16 higher to $8 11/16 after it signed a national distribution agreement with Inacom Communications to distribute the "Be There!" product line... Interactive marketing and communications product designer EAGLE RIVER INTERACTIVE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ERIV)") else Response.Write("(Nasdaq: ERIV)") end if %> rose $1 1/4 to $11 1/4 after it and Sharp Electronics Corp. today announced the launch of a major redesign of Sharp's corporate website.

GOATS

DONNELLEY ENTERPRISE SOLUTIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DEZI)") else Response.Write("(Nasdaq: DEZI)") end if %> slid $1 to $9 3/4 after the information technology outsourcing company said it will take a number of charges in the coming quarter to increase reserves for doubtful accounts receivable and to adjust accounting accruals on a number of contracts. One change the company will make includes the percentage of contracts completed -- in other words, it may have recognized a higher level of revenues in past accounting periods than it should have. The company also announced the "resignation" of its Chief Financial Officer. The statistical policymaking behind accounts receivable treatment is the job of the CFO, as is the decisionmaking regarding revenue recognition policies.

Cosmetics company REVLON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: REV)") else Response.Write("(NYSE: REV)") end if %> lost $3 5/8 to $49 1/16 after saying it is confident that it will meet the Q3 mean EPS estimate of $0.62. That followed a research note from PaineWebber, which cut its revenue estimate for the quarter by $30-35 million, per the guidance from the company. Like any other multinational firm, Revlon is dealing with the strength of the dollar. That means that foreign currencies, such as the German mark, will buy less in terms of dollars. For instance, a mark bought about 67 cents last Christmas and it will now buy 56 cents. If a multinational company tries to raise its prices abroad to compensate, it can price itself out of the market, as Japanese car companies saw in the U.S. market, especially in 1994. If it hedges, or uses derivatives to try to offset currency fluctuations, it can lose more money on what amounts to trading losses if it can't estimate accurately its revenue levels. Revlon is somewhere in between, using slight amounts of hedging so it will offset some of the dollar's strength and make its earnings numbers for the quarter.

QUICK CUTS: APPLIED EXTRUSION TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AETC)") else Response.Write("(Nasdaq: AETC)") end if %> dropped $1 to $9 1/4 after the specialty plastics manufacturer warned that it expects to report a year-over-year decline in operating earnings for the fourth quarter and that it is planning on taking an accounting bath to "rationalize" certain operations... DART GROUP CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DART.A)") else Response.Write("(Nasdaq: DART.A)") end if %> fell $8 1/2 to $104 1/2 on saying it has broken off discussions regarding a possible sale of its Crown Books unit... Specialty coated materials manufacturer MATERIALS SCIENCES CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MSC)") else Response.Write("(NYSE: MSC)") end if %> lost $1 1/4 to $13 7/8 on reporting a 59% year-over-year EPS decline on flat sales for its third quarter and announcing that it expects full year FY98 earnings to decline from last year's $1.04 per share performance... Medical device manufacturer PERCLOSE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PERC)") else Response.Write("(Nasdaq: PERC)") end if %> fell $2 1/8 to $24 1/2 after advising investors last night that it foresees second quarter revenues falling below analysts' estimates. Revenues will be flat sequentially at $1.2 million.

FOOL ON THE HILL
An Investment Opinion by Randy Befumo

Whirlpool Cleans Up In Transaction With Transamerica

WHIRLPOOL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WHR)") else Response.Write("(NYSE: WHR)") end if %> received a huge boost today after making a deal with TRANSAMERICA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TA)") else Response.Write("(NYSE: TA)") end if %>. Shares rose $8 1/16 to $64 7/8 after Transamerica forked over $1.35 billion to acquire approximately $1.23 billion in receivables and all of the finance operations of Whirlpool. Investors are excited over such a huge slug of cash being thrown Whirlpool's way because it paves the way for Whirlpool to completely pay off its $900 million in debt and reduces the company's receivables by roughly 50% to $1.22 billion, strengthening the balance sheet. Whirlpool also took a controlling interest in Brasmotor S.A. and eliminated 4,700 jobs in a cost-cutting measure.

Finance operations at Whirlpool? Yep. Someone has to finance retailers who want to buy a score of washing machines. Like many other manufacturers and retailers of consumer durables like Ford or General Motors, Whirlpool opened its own credit bank called Whirlpool Financial National Bank and starting doing business making loans to retailers that wanted to sell its products but could not afford to pay for them all upfront. Now just as Ford has issued equity in its ASSOCIATES FIRST CAPITAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AFS)") else Response.Write("(NYSE: AFS)") end if %>, Whirlpool is getting out of the financing business to focus on appliances. In Whirlpool's case, rather than spinning the company off as a separate operation, it has forged a ten-year strategic alliance with Transamerica for that company to acquire the business and continue performing the function for Whirlpool.

Whirlpool's finance operations directed at providing financing for retailers are quite large and have international reach. Unfortunately for shareholders, most investors did not even realize that these operations were there, let alone value them appropriately. In fact, having the receivables from the credit operations on the balance sheet actually hurt the manufacturer in the eyes of investors who require a high degree of liquidity from their investments. Even with a clear delineation between profits from financing and profits from manufacturing, it was hard to come up with a value for Whirlpool Financial given that it only earned Whirlpool $6 million last quarter. The result was valuing Whirlpool as a manufacturing operation and ignoring the financing business, a move that in retrospect is clearly incorrect. Whirlpool's finance operation is being purchased at 32% of what the whole company was worth yesterday.

The deal is a huge win for Transamerica, as it gives the San Francisco-based company best known for life insurance a big push in the commercial finance direction. Getting a ten-year contract to finance customers of the largest manufacturer of appliances in the world is a pretty big deal. Although the shares are only up marginally today, the company's stock sits securely at a 52-week high. With the $7.93 EPS estimates for 1998 probably due to get raised a bit as the company has added about 2% to its total assets, it still trades at only 12.6 times earnings despite the 43% rise in share price over the past year. The company has a 2% dividend yield and has grown earnings an average of 11% annually over the past five years.

Although the move helps Whirlpool tremendously, the real interesting name that pops up on the investor radar appears to be Transamerica. Whirlpool still trades at almost 17 times 1998 earnings estimates after seeing earnings drop an average of 7% per year over the past five years. Even if the company grows at the projected 10% rate over the next five years, it will grow slower than the industry with meager 3.1% profit margins. The $6.3 billion Transamerica has 13.1% margins, a much better balance sheet, no volatile consumer finance business, and a nice push in the commercial and real estate finance business. Transamerica currently is valued at a discount to other life insurance giants like ALLSTATE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALL)") else Response.Write("(NYSE: ALL)") end if %> and CNA FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CNA)") else Response.Write("(NYSE: CNA)") end if %> based on forward earnings expectations. All in all, although Whirlpool is the name investors are swarming all over today, Transamerica appears to provide the most opportunity.

CONFERENCE CALLS

HEILIG-MEYERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HMY)") else Response.Write("(NYSE: HMY)") end if %>
(804) 254-3939 -- replay

FLEET FINANCIAL GROUP/QUICK & REILLY
Re: Fleet's acquisition of Quick & Reilly
(800) 839-3444 -- replay through 9/19 @ 1:00 pm EDT

EASTMAN KODAK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %>
Earnings shortfall pre-announcement
(402) 398-4725 -- replay through 9/22

THIS WEEK'S CONFERENCE CALL SYNOPSES

ORACLE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %> Call
EASTMAN KODAK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> Call

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