DJIA: 7730.88 -63.52 (-0.81%) S&P 500: 963.04 -7.74 (-0.80%) Nasdaq: 1576.51 -11.41 (-0.72%) Value Line Index 858.67 -7.26 (-0.84%) 30-Year Bond 103 20/32 -25/32 5.86% Yield
Drug delivery technology company Alkermes, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALKS)") else Response.Write("(Nasdaq: ALKS)") end if %> gained $1 7/8 to $25 after it announced the signing of an agreement with R. W. Johnson Pharmaceutical Research Institute, a Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> company, for the further development of Alkermes' proprietary "ProLease injectable sustained release drug delivery" formulations. This technology attempts to get around multiple injections through the use of a gradual release method once in the body. In exchange for worldwide rights to products resulting from the collaboration, Johnson & Johnson will provide Alkermes with development funding, milestone payments, and royalty payments based on sales. Alkermes is expected to manufacture the ProLease products, while R.W Johnson will be responsible for conducting clinical trials and securing regulatory approvals, and Johnson & Johnson will be responsible for marketing the product worldwide. This move ultimately gives Alkermes a measure of efficacy (until now it has experienced success in animal studies) as well as much needed capital.
Amsterdam-based international trading and packaging company NV Koninklijke KNP BT announced today that it has informed BT Office Products International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BTF)") else Response.Write("(NYSE: BTF)") end if %> that it will make an offer to acquire the remaining 30% of the company that it doesn't already own for $10.50 per share in cash. BT Office Products was up $13/16 to $11 3/16 on that news. Interestingly, BT Office Products was formerly wholly owned by the Dutch company, but it sold the 30% stake (10 million shares) in a spin-out in July of 1995 at $11.50 per share. KNP BT is in the midst of a restructuring where it is considering splitting its distribution and packaging businesses into separate companies. Some observers have suggested that the bid for the remaining BT Office shares is only a prelude to the eventual breakup of the company, but KNP BT denies this.
QUICK TAKES: Apria Healthcare Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHG)") else Response.Write("(NYSE: AHG)") end if %> gained $1 to $11 15/16 after considering a revised takeover offer from Transworld HealthCare <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TWHH)") else Response.Write("(Nasdaq: TWHH)") end if %> that is rumored to be around $1.43 billion, or $13 per share in cash and $5 in equity... SIFCO Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SIF)") else Response.Write("(AMEX: SIF)") end if %>, a company that serves 90% of the world's airlines with production, repair, plating, machining, and marketing of jet engine and airframe components, gained $2 to $20 1/2 after posting Q1 1998 EPS of $0.47, doubling EPS from the prior year period... Corporate ISP and backbone provider PSINet <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PSIX)") else Response.Write("(Nasdaq: PSIX)") end if %> received a surprise $10 per share cash acquisition offer from the former CEO of Digex yesterday. The shares rose $9/16 to $9 today, suggesting that the market believes the company will not approve its proposed deal to exchange 20% of its equity with IXC Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IIXC)") else Response.Write("(Nasdaq: IIXC)") end if %> for 10,000 route miles of OC-48 fiber.
Microsemi Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSCC)") else Response.Write("(Nasdaq: MSCC)") end if %> and BKC Semiconductors <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BKCS)") else Response.Write("(Nasdaq: BKCS)") end if %> reported that they have signed a definitive agreement for Microsemi to acquire BKC for $9.17 per share in cash, which boosted shares of BKC $2 3/4 to $8 5/8... Aphton Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APHT)") else Response.Write("(Nasdaq: APHT)") end if %> gained $1 1/4 to $11 1/2 after announcing a statistically significant increase in survival results in the Phase I/II clinical trials of its "anti-gastrin therapeutic vaccine Gastrimmune," which was administered to patients with end-stage colorectal cancer... Asyst Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASYT)") else Response.Write("(Nasdaq: ASYT)") end if %> gained $1 1/4 to $26 1/8 after Prudential Securities reiterated its "buy" rating on the semiconductor materials handling company... Multimedia projection products company In Focus Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INFS)") else Response.Write("(Nasdaq: INFS)") end if %> added $2 1/4 to $29 1/4 on posting Q4 EPS of $0.58 versus $0.45 in the prior year period.
Revenue recognition-plagued database company Sybase Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SYBS)") else Response.Write("(Nasdaq: SYBS)") end if %> plummeted $1 15/16 to $7 3/4 after the company postponed its release of final results for its fourth quarter and fiscal year. Recalling Sybase's 1995 woes, the company blamed improper revenue recognition practices at the company's Japanese subsidiary and announced that it would have to restate revenues for all of 1997. Many thought in January that CEO Mitchell Kertzman's appearance on CNBC had put all of these concerns to bed even though his appearance was tied to pre-announcing poor fourth quarter results. Kertzman said at that time that the company's Asian orders were very strong. Today's episode is just the thing a company trying to regain credibility with investors does not need. Rather than blaming a rogue element in the organization, shareholders might want to consider overall management quality in light of this happening at a company where it has happened before.
"Concept" restaurant Planet Hollywood International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PHL)") else Response.Write("(NYSE: PHL)") end if %> slipped $3 5/16 to $7 1/8 after announcing that it expects revenues and profits for the fourth quarter of 1997 to fall "significantly short of analysts' estimates." The company expects to report EPS (before charges) of $0.01 compared with estimates of $0.22. With same-store sales down 13% in the fourth quarter on a 3% total revenue increase, the company blamed competition from other theme restaurants such as Rainforest Cafe <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %>. To top things off, the company also announced that it will see relatively "flat revenues and modestly lower earnings in 1998." In other words, the company expects 1998 EPS of about half the $0.90 that analysts are expecting.
Asset manager United Asset Management Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UAM)") else Response.Write("(NYSE: UAM)") end if %> dropped $1 1/2 to $21 13/16 after announcing that it expects to take a non-cash charge between $165 million and $175 million against pre-tax earnings for its fourth quarter. The charge relates to writing down intangible assets arising from acquisitions of a real estate investment management firm and Newbold's Asset Management, a value-oriented institutional manager that is now part of the company's Pilgrim Baxter unit. UAM is not expected to increase its quarterly dividend, but it did announce an eight million share addition to its share repurchase authorization. The company also said that it expects EPS between $0.32 and $0.34 for the quarter, versus expectations for $0.34. At its current run-rate of approximately $3.02 per share in operating cash flow per share (net income + depreciation and amortization), UAM is selling at 7.2 times cash flow per share. Add debt per share and subtract cash per share from the price per share and the company is selling at an enterprise value-to-cash flow ratio of 9.8. That compares with an enterprise value to cash flow ratio of 18.3 times at T. Rowe Price <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TROW)") else Response.Write("(Nasdaq: TROW)") end if %> and 11.4 times for Franklin Resources <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEN)") else Response.Write("(NYSE: BEN)") end if %>.
Oilfield services giant Schlumberger <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLB)") else Response.Write("(NYSE: SLB)") end if %> fell $9 5/8 to $71 7/8 after reporting Q4 EPS of $0.75, up 44% from last year. The company commented in its press release that oil companies may re-evaluate exploration and production (E&P) plans depending on the effects macroeconomic dislocations in developing Asian nations have on the balance of supply and demand for crude products. Investors took that to mean that the company's projection of a 10% increase in client E&P spending may be revised downward, but it could also be taken that clients will revise upward their spending plans after reviewing the situation. With May 1999 oil futures down more than 20% over the last few months, investors are only considering the negative side of that statement, which in the absence of a conference call is a sentiment that builds upon itself. The company confirmed this afternoon that its clients could move either way, and not just down.
QUICK CUTS: Oil & gas driller Diamond Offshore <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DO)") else Response.Write("(NYSE: DO)") end if %> dropped $4 15/16 to $39 7/8 after reporting Q4 diluted EPS of $0.55. Basic EPS of $0.57 did meet the Zacks mean estimate though. Not counting a gain on sale of assets last year, operating income per share increased 86% in the quarter... Internet service provider Earthlink Network <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELNK)") else Response.Write("(Nasdaq: ELNK)") end if %> fell $5 7/8 to $31 after Everen Securities lowered its rating on the company to "market perform" from "outperform." The call was based on valuation, which the analyst believed may have become rich in light of current merger & acquisition valuations in the industry... Organ transplant therapies company Sangstat Medical <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SANG)") else Response.Write("(Nasdaq: SANG)") end if %> was felled for $6 1/2 to $26 after Hambrecht & Quist lowered its 1998 EPS estimate from $1.20 to a loss of $0.36 per share. H&Q's analyst said she was too aggressive with estimates in light of recent product delays.
Robert Mondavi <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MOND)") else Response.Write("(Nasdaq: MOND)") end if %> was squashed $7 11/16 to $40 1/8 after the winemaker reported Q2 EPS of $0.66, in line with estimates The company warned that it is experiencing a shortage of its Woodbridge Chardonnay and that increased competition in the imported wine segment will necessitate higher marketing spending... Semiconductor wafer stepper company ASM Lithography <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASMLF)") else Response.Write("(Nasdaq: ASMLF)") end if %> fell $8 1/2 to $64 7/8 on reporting 1997 EPS of approximately $2.35 (including a gain), above the First Call estimate of $2.22. However, Investors were concerned about cautious comments from the company's CEO. Also of slight concern for quantitative/momentum investors, taking the gain out of EPS, it appeared as though earnings missed estimates, which doesn't match with the reception analysts gave the results in comments to various news outlets... Removable media storage company Iomega <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IOM)") else Response.Write("(NYSE: IOM)") end if %> crashed after the bell, losing $3 23/32 to $9 1/32 in after-market trading from its close of $12 3/4. The company reported Q4 EPS of $0.13, $0.02 below the First Call mean estimate due in part to a sequential decline in the company's operating margin as well as slower-than-expected revenue growth and product development.
EARNINGS MOVERS
Micrel Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCRL)") else Response.Write("(Nasdaq: MCRL)") end if %> down $4 15/16 to $31 1/16; Q4 EPS: $0.25; Estimate: $0.23
Seattle Filmworks <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FOTO)") else Response.Write("(Nasdaq: FOTO)") end if %> down $1 15/16 to $9 3/8; Q1 EPS: $0.09; Estimate: $0.09
Heartland Express <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HTLD)") else Response.Write("(Nasdaq: HTLD)") end if %> down $3 1/8 to $23 7/8; Q4 EPS: $0.24; Estimate: $0.25
FOOL
ON THE HILL
An Investment Opinion
by
Randy Befumo
Investing Information
One of the more perplexing tasks individual investors have to face is where to get information about publicly traded companies. As strangers in a strange land when they first come to the world of investing, they not only face the already daunting endeavor of finding information from a variety of sources, but they also face the even more important task of determining which information is important. Unless facts are placed in a framework that provides meaning, they can be confusing, contradictory chunks of white noise.
Getting Data
The lowest form of information is data, which almost always takes the form of numbers. Whether daily stock prices, condensed financial statements, or a variety of quantitative tools, fortunately for investors there are a wide array of places on the World Wide Web to get this stuff. At the risk of being self-promotional, one of the first places that you should look is the variety of tools that are available at www.fool.com. The Quote, Chart, and Financials offerings cover the gamut of current price, recent price history, condensed historical financials, and current earnings estimates.
For America Online readers, a faster way to get most of these items is Keyword: Quote, Keyword: Historical Quotes, and Keyword: First Call. For readers who like to use the World Wide Web and for some reason desire other sources, there are a quite a few options. For simple delayed quotes, you can go just about anywhere, although www.pcquote.com and www.quote.com are specifically designed with this in mind. For real-time quotes, don't waste your money unless you want to be a tick-by-tick trader swapping slightly higher returns for much higher tax burdens and an ulcer. For historical quotes, the quote places as well as www.BigCharts.com offer more comprehensive charts than the www.fool.com site.
For distilled financials, it ultimately depends on whether or not you want to pay money. The www.fool.com site gets its historical financials from Media General Financial Services through Hoovers (www.hoovers.com), but Media General offers much more comprehensive financials at the www.wsrn.com site. The depth of the annual information at www.wsrn.com makes it the place to go when you want to look at five or six year financial trends. Although it costs money, www.marketguide.com's Provestor reports top www.wsrn.com in that they offer detailed quarterly information, although only four years at the most.
Finding Info
Information (or "info"), as distinct from data, is anything with words that is intended to be objective. Press releases, federal filings, and company descriptions are the three main objects of desire here. Like delayed quotes, press releases are nearly ubiquitous. On America Online, Keyword: Company News has BusinessWire, PRNewswire, and Reuters. At www.businesswire.com and www.prnewswire.com you have the databases of each of these companies, which make money by having the company sending out the press release pay them as well as having the services that subscribe fork over money too. Over time its likely that their margins will get squeezed as the Internet takes off, but for the time being they control the flow of info, and if you are looking for just one or the other on the Web, their sites are not a bad place to start.
The www.fool.com site gets its news from www.newsalert.com, which consists of press releases and our own proprietary FoolWires. The NewsAlert site also has a full Reuters feed, which can be helpful if you are looking for recent information on a company. NewsAlert carries what seems to be a 60 or 90 day archive, which is much longer than most of its competitors. Another major wire service, Dow Jones, is carried for free on the new www.smartmoney.com site, which is one of the better aspects of this place. A third set of wires can be found at www.bloomberg.com. As for online newspapers, www.wsj.com and www.investors.com are the two major business newspapers online, while the New York Times has an America Online site in addition to its Web presence.
Federal filings through EDGAR are available in a number of places. I must stress here that nine times out of ten, the best information I get is from the company's federal filing. As the SEC forces the company to put certain key information in them, reading a few 10-Qs and a 10-K is often the most efficient way to figure out a company in a few hours. Although www.sec.gov has an EDGAR archive, I normally use either www.freeedgar.com or www.edgar-online.com via the Fool Financials option on www.fool.com. As for company descriptions, for right now the major source of these are either the descriptions in the 10-Ks or www.hoovers.com, which has a subscription component for investors who like the format and style of the reports.
Certainly there are plenty of other places on the Web that offer investing information of some kind, but given that we'd like to keep you exploring the Fool editorial content as opposed to these other places, I probably have pushed the "mention other Web sites" envelope as far as it can go with one exception. At www.investorama.com, Doug Gerlach has done an outstanding job of cataloging a wealth of investment sites. Basically, if you are looking for anything else, you probably want to start there or in www.yahoo.com's business and investing areas. Believe it or not, substantially all of background information used to create Fool Editorial pieces comes from these sources, particularly EDGAR. If you as an investor do not check any other source, EDGAR is definitely where you should be looking.
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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ANOTHER FOOLISH THING
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Randy Befumo (TMF Templr), a Fool One
Dale Wettlaufer (TMF Ralegh), Fool Two
Alex Schay (TMF Nexus6), Fool Three
Contributing Writers
Brian Bauer (TMF Hoops), Fool Four
Editor
