DJIA 9009.19 -18.79 (-0.21%) S&P 500 1183.49 +2.11 (+0.18%) Nasdaq 2050.42 +15.67 (+0.77%) Value Line ndx 896.81 +0.54 (+0.06%) 30-Year Bond 104 4/32 +6/32 4.98% Yield
The question of whether holding out for a better deal is a sound business practice is likely first on the minds of NBA players and owners these days. Whether they noted today's news from Quickturn Design Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QKTN)") else Response.Write("(Nasdaq: QKTN)") end if %> is another matter. The electronic design automation tools maker shot up $1 5/8 to $13 13/16 after the company agreed to be bought by rival Cadence Design Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDN)") else Response.Write("(NYSE: CDN)") end if %> in a $253 million stock deal. The $14 per share offer represents a nearly 15% premium over Monday's closing price for Quickturn. That's also an improvement on the $12.125 per share unsolicited offer Mentor Graphics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MENT)") else Response.Write("(Nasdaq: MENT)") end if %> made this summer, a proposal Quickturn's board rejected and called "opportunistic" and "inadequate." Spurned, Mentor tumbled $1 1/4 to $8 3/4 today.
While the Fool spent the day trying to figure out why Xoom.com (XMCM: Nasdaq) didn't pick up "XOOM" as its stock ticker, the Internet IPO du jour, uh, xoomed into the stratosphere in its first day of trading. Xoom closed at $34 7/16, 145.98% above the 4 million share offering's $14 initial price. An online services provider and direct marketer -- free email, web pages, and chat rooms -- Xoom, which hits members with advertisements, can expect competition from recent IPO theglobe.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGLO)") else Response.Write("(Nasdaq: TGLO)") end if %> and GeoCities <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GCTY)") else Response.Write("(Nasdaq: GCTY)") end if %>, among others. For some perspective on Internet offerings from one Fool's point of view, check out this column. Meanwhile, shares of marketing software developer Exchange Applications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EXAP)") else Response.Write("(Nasdaq: EXAP)") end if %> grabbed $4 3/16 to $15 3/16 on its maiden voyage. Its 3 million-share IPO priced yesterday at $11 a share.
QUICK TAKES: Shares of streaming media aggregator Broadcast.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BCST)") else Response.Write("(Nasdaq: BCST)") end if %> flew ahead $15 to $69 3/4 after the company announced a deal with the Nasdaq Stock Market to broadcast quarterly earnings conference calls over the Internet in a pilot program for Nasdaq 100 companies... Integrated oil company Chevron Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHV)") else Response.Write("(NYSE: CHV)") end if %> rose $3 3/4 to $86 3/16 as rumors swirled that it was in takeover talks with Royal Dutch/Shell Group, which would buy Chevron for $65 billion in stock, or $100 per share. Group member Royal Dutch Petroleum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RD)") else Response.Write("(NYSE: RD)") end if %> picked up $2 3/16 to $47 5/16 today while partner Shell Transport & Trading <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SC)") else Response.Write("(NYSE: SC)") end if %> won $2 to $36 13/16. All parties declined comment.
Women's clothing designer and manufacturer St. John Knits <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SJK)") else Response.Write("(NYSE: SJK)") end if %> stitched up $4 13/16 to $26 3/4 after it said it received an offer from company founder, chairman, and CEO Bob Gray and his family to buy the shares they don't already own for $28 a share in cash -- a 28% premium over the company's closing price yesterday of $21 15/16... Online services company America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> posted a gain of $2 5/8 to $93 after it announced deals with GTE Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GTE)") else Response.Write("(NYSE:GTE)") end if %> and Bell Atlantic Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BEL)") else Response.Write("(NYSE:BEL)") end if %> to provide on-line Yellow Pages listings for three years in exchange for a guaranteed $31 million in ad and distribution revenues... Online retail giant Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> swung up $12 3/16 to $216 1/4 today. CyberShop International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYSP)") else Response.Write("(Nasdaq: CYSP)") end if %> agreed to join its new "Shop the Web" comparison shopping service.
Internet hub Lycos <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> took $3 3/8 to $61 1/4 after it opened the Lycos Store, a "virtual department store" with a wide range of products... "Generation Y" retailer dELiA*s Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq:DLIA)") else Response.Write("(Nasdaq:DLIA)") end if %> jumped ahead $2 3/16 to $13 7/16 after it said it was considering alternatives for its Internet unit, possibly to include an IPO. The company reported Q3 EPS of $0.05, below last year's $0.12 figure but in line with the market's consensus estimate... AT&T Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> rang up $4 to $71 after announcing a three-year deal to provide members of the Securities Industry Association and the New York Clearing House Association with local communications services, a pact worth at least $180 million... Grocer Great Atlantic & Pacific Tea Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GAP)") else Response.Write("(NYSE: GAP)") end if %>, which yesterday said it will close or sell 127 of its 907 stores and take a charge of up to $160 million, bagged up $4 9/16 to $30 today after Morgan Stanley Dean Witter upgraded the company to "outperform" from "neutral."
Independent mortgage banking company Headlands Mortgage Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HDLD)") else Response.Write("(Nasdaq: HDLD)") end if %> shot up $4 3/4 to $21 3/4 on last night's news that GreenPoint Financial Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPT)") else Response.Write("(NYSE: GPT)") end if %> agreed to buy the company in a $473 million stock deal. The deal vales Headlands at nearly $24 per share, more than a 40% premium over yesterday's closing price... Shares in video transport and network access system maker Tellabs <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLAB)") else Response.Write("(Nasdaq: TLAB)") end if %> rang up $4 11/16 to $68 15/16 on continued enthusiasm over a $100 million multi-year contract with Sprint <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FON)") else Response.Write("(NYSE: FON)") end if %>. Today's Lunchtime News, still available and still hot, has more on Tellabs... FNB Rochester Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FNBR)") else Response.Write("(Nasdaq: FNBR)") end if %> jumped $9 3/8 to $31 1/8 after agreeing to merge with Buffalo, New York-based M&T Bank Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTB)") else Response.Write("(NYSE: MTB)") end if %> in a stock and cash deal valuing the company at $33 per share. The deal strengthens M&T's position in western New York and adds to its strong market share across western and central New York.
Proposal management services company SM&A Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WINS)") else Response.Write("(Nasdaq: WINS)") end if %> ran ahead $3 to $11 3/4 after it announced plans to buy back up to 300,000 shares of its common stock, approximately 1.8% of the total currently outstanding... Modeling and computer design products maker 3D Systems Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TDSC)") else Response.Write("(Nasdaq: TDSC)") end if %> moved ahead $1 3/4 to $8 1/4 after releasing Cibatool SL 5530HT, a new high-temperature resin to be used with its solid imaging systems... TV and radio station operator Emmis Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EMMS)") else Response.Write("(Nasdaq: EMMS)") end if %> tacked on $2 1/16 to $41 13/16 after it said it expects to beat Wall Street's EPS estimates for Q3 when it reports results Dec. 18. Five analysts surveyed by First Call currently have a mean estimate of $0.09 per share.
Drug developer Centocor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNTO)") else Response.Write("(Nasdaq: CNTO)") end if %>, which contracted Genzyme Transgenics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GZTC)") else Response.Write("(Nasdaq: GZTC)") end if %> to develop antibodies in goat's milk that are used to fight chronic diseases, popped up $2 7/16 to $38 9/16 today... Trash services company Waste Management <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMI)") else Response.Write("(NYSE: WMI)") end if %> picked up $1 7/16 to $45 7/8 after it settled a class action lawsuit against its recently acquired Waste Management Holdings subsidiary yesterday. The company expects an after-tax charge of $70 million in Q4 in connection with the settlement... Guidant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GDT)") else Response.Write("(NYSE:GDT)") end if %> rose $5 9/16 to $95 9/16 after announcing the U.S. market release of its Ventak Mini IV automatic implantable cardioverter defibrillator system for combating irregular heartbeats.
Faced with the prospect of continuing low metals prices in the near-term, copper and gold mining company Freeport McMoRan Copper & Gold <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FCX.A)") else Response.Write("(NYSE: FCX.A)") end if %> decided today to eliminate its regular quarterly common stock dividend in an effort to cut costs. However, the extension of the company's "Hunker Down & Go" cost-cutting program did not go over so well with traders, who instead decided to "Hunker Down & Sell" Freeport shares, sending the stock down $1 3/16 to $10 1/16. Freeport will use the cash formerly set aside for dividends to pay down its debt load, which it sees falling by an estimated $250 million in fiscal 1999 if commodity prices stay at current levels. According to reports, copper prices have fallen 17% this year as the Asian financial crisis crimped demand from Japan, the world's second-largest consumer of the commodity.
Food products and restaurant firm Fresh Foods <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FOOD)") else Response.Write("(Nasdaq: FOOD)") end if %> spoiled for a $1 1/2 loss to $6 after pre-announcing fiscal Q3 earnings between $0.19 and $0.23 per share, which is below the $0.46 to $0.53 per share the company said analysts had been expecting. The company blamed the shortfall on conversion problems and slow branded food sales at its restaurants, adding that the problems will likely persist and result in Q4 earnings "consistent" with the Q3 results. The company merged with steakhouse operator Sagebrush Inc. in January and decided to convert its existing restaurants to the Sagebrush concept. However, problems from the switcheroo are still nagging the company's performance. Discouraged by the bumpy transition, BancBoston Robertson Stephens cut its rating today to "long-term attractive" from "buy."
QUICK CUTS: Information technology education centers operator Computer Learning Centers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CLCX)") else Response.Write("(Nasdaq: CLCX)") end if %> was flunked for a $15/16 loss to $5 15/16 after reporting fiscal Q3 EPS of $0.03, below the First Call mean estimate of $0.13. The company blamed the shortfall on an 18% year-over-year decline in same center enrollments... Consumer products giant Procter & Gamble Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PG)") else Response.Write("(NYSE: PG)") end if %> was Hawaiian Punch-ed for a $2 5/8 loss to $84 1/8 following a downgrade to "neutral" from "attractive" from Bear Stearns on fears of slowing near-term global unit sales volume growth. Those same fears carried over into the shares of soft drink company Coca-Cola Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %>, which lost $1 1/2 to $67 1/8.
Tefron Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TFR)") else Response.Write("(NYSE: TFR)") end if %>, which makes branded intimate apparel for retailers such as Intimate Brands' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBI)") else Response.Write("(NYSE: IBI)") end if %> Victoria's Secret unit, was ripped for a $4 5/8 loss to $7 after saying "quality control issues" for some garments produced by subcontractors will result in sales and earnings figures "below plan" in Q4 and in the first half of fiscal 1999... Swedish drug developer Astra AB <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: A)") else Response.Write("(NYSE: A)") end if %> fell $1 1/16 to $20 13/16 after officially agreeing to merge with Britain's Zeneca Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZEN)") else Response.Write("(NYSE: ZEN)") end if %> in a stock swap valued at $34.6 billion. For more details on the deal, see this morning's Breakfast With the Fool.
Hotel and casino operator Starwood Hotels & Resorts <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HOT)") else Response.Write("(NYSE: HOT)") end if %> lost another $1 3/16 to $25 1/8 after falling 11% yesterday on news that the delayed opening of its "Glory of Rome" riverboat casino will result in fiscal Q4 funds from operations a dime below the Street's estimate of $1.50 per share. Prudential Securities reduced its rating to "accumulate" from "strong buy," and Schroder & Co. cut its view to "outperform" from "outperform significantly"... Oil and gas exploration and production company EEX Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EEX)") else Response.Write("(NYSE: EEX)") end if %> sank $3/4 to $7 1/8 after the company set a one-for-three reverse stock split... Arts and crafts retailer A.C. Moore Arts & Crafts <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACMR)") else Response.Write("(Nasdaq: ACMR)") end if %> was knocked down $1 5/16 to $5 1/16 after saying its Q4 same-store sales growth will be in 1% to 2% range, which is below the 5% to 6% growth rate the firm said analysts had been expecting.
Semiconductor automatic test equipment maker Credence Systems Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMOS)") else Response.Write("(Nasdaq: CMOS)") end if %> slid $5/16 to $19 1/2 after reporting a fiscal Q4 loss of $0.38 per share (excluding charges) and saying chairman and CEO Wilmer Bottoms has resigned... TLC The Laser Center <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LZRCF)") else Response.Write("(Nasdaq: LZRCF)") end if %> was torched for a $1 1/8 loss to $20 7/8 after PaineWebber downgraded the operator of laser vision correction centers to "attractive" from "buy"... Tree farm and pulp and paper mill operator Longview Fibre Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LFB)") else Response.Write("(NYSE: LFB)") end if %> was pruned $1/2 to $10 1/2 after reporting fiscal Q4 earnings of $0.02 per share compared to $0.08 per share a year ago, which was $0.05 per share shy of the First Call mean estimate.
FOOL
ON THE HILL
An Investment Opinion
by
Louis Corrigan
Actively Managed Money
Over the weekend, I was combing through some investment performance records and came across an interesting mutual fund that's consistently managed to keep pace with the market. Better yet, it's done so with minimal trading. Unlike the average fund, which turns over about 77% of its holdings every year, this one makes relatively few transactions. In 1995, just 6.6% of the holdings were changed; in 1996, just 4.8%; in 1997, 6.4%; and so far this year, 8.6%. Low turnover is important because academic studies show that frequent trading correlates with market underperformance.
That's partly because trading expenses come out of investment returns. Related studies also suggest that many investors are simply overconfident; they think they're smarter than they really are. The stocks they sell often do better than the stocks they replace them with. Patient investors may make other mistakes, but they're a little less susceptible to the overconfidence of the market timer. Of course, the tax consequences of frequent trading don't even figure into most studies on the subject, and they can eat away even more at profits.
What's really impressive about this fund, though, is that its managers have shown real skill at picking stocks. They don't just avoid periodic dumping. Because the managers take a largely buy-and-hold approach, they tend to ride their winners. Consider these savvy picks from 1996 alone.
Date Company Bought Current
3/27/96 EMC Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %> $10 3/4 $82 5/16
3/29/96 WorldCom <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCOM)") else Response.Write("(Nasdaq: WCOM)") end if %> $23 $62 21/32
9/5/96 Dell <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> $4 1/4 $68 1/8
9/30/96 Lucent <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> $22 7/8 $99 3/8
12/18/96 Guidant <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GDT)") else Response.Write("(NYSE: GDT)") end if %> $28 1/8 $95 9/16
Date Company Sold Current
8/15/96 Ogden <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OG)") else Response.Write("(NYSE: OG)") end if %> $18 3/8 $25 7/16
11/1/96 Yellow <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YELL)") else Response.Write("(Nasdaq: YELL)") end if %> $12 $16 7/8
12/31/96 Luby's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LUB)") else Response.Write("(NYSE: LUB)") end if %> $19 7/8 $14 15/16
12/31/96 Shoney's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SHN)") else Response.Write("(NYSE: SHN)") end if %> $7 $1 1/2
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), another Fool David Marino-Nachison (TMF Braden), a new Fool
Editing |