DJIA 10339.51 +165.67 (+1.63%) S&P 500 1358.63 +10.28 (+0.76%) Nasdaq 2598.81 +5.76 (+0.22%) Russell 2000 412.32 +6.46 (+1.59%) 30-Year Bond 97 2/32 +4/32 5.45 Yield
Shareholders familiar with CBS Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %> portfolio of online assets -- including stakes in Sportsline USA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPLN)") else Response.Write("(Nasdaq: SPLN)") end if %> and MarketWatch.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MKTW)") else Response.Write("(Nasdaq: MKTW)") end if %> -- no doubt paid close attention to today's news that the media giant will exchange $100 million worth of content and promotions for a 35% stake in a joint venture with online entertainment-related products retailer Big Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BIGE)") else Response.Write("(Nasdaq: BIGE)") end if %> that will own movie and entertainment-themed website hollywood.com. Big Entertainment shareholders, who saw their shares jump $16 5/8, or 105.6%, to $32 3/8 today in trading more than 20 times the 30-day average, applauded the deal. CBS is among the crew of media companies reportedly considering ways to package their respective Internet assets -- the company also obtained a 50% interest in storeRunner for $100 million of promotions over six years -- as separate publicly traded entities. Today's edition of The Wall Street Journal reported that Walt Disney Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %>, a 43% owner of Infoseek <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEK)") else Response.Write("(Nasdaq: SEEK)") end if %>, is entertaining similar thoughts. Infoseek earned $9 3/4 to $87 1/8 today, Disney $13/16 to $35 5/16.
As online bidding giant eBay <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EBAY)") else Response.Write("(Nasdaq: EBAY)") end if %> continues to spread its web in order to shore up better service for its users, the wealth that has come to this recent Foolish Duel subject is sure to be spread. Today, US Office Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OFIS)") else Response.Write("(Nasdaq: OFIS)") end if %> boxed up $1 3/4 to $5 5/8 today after its Mail Boxes Etc. postal services subsidiary announced a five-year shipping and delivery services agreement with the online auctioneer. Mail Boxes Etc. will offer eBay sellers and buyers the infrastructure for packing and shipping; the companies also plan to establish a "hold for inspection" program where Mail Boxes Etc. franchisees -- there are more than 3,000 Mail Boxes Etc. centers in the U.S. -- will provide a place for delivery and inspection of goods sold over eBay. Financial terms of the deal weren't disclosed, but the news was nonetheless welcome for US Office shareholders, whose shares were down about 40% this year before today's news. Web-based e-commerce shipping company iShip.com also got on board with eBay, announcing plans to give users of the auction site information about shipping costs and options. Shares of eBay, strong in early trading, eventually closed down $6 3/4 to $176 5/8.
QUICK TAKES: Hospitality, broadcasting, and cable company Gaylord Entertainment Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GET)") else Response.Write("(NYSE: GET)") end if %> added $4 7/8 to $28 1/4 after CBS agreed to buy KTVT-TV, CBS' Dallas-Ft. Worth affiliate, for $485 million in stock... Cable TV systems operator Adelphia Communications Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADLAC)") else Response.Write("(Nasdaq: ADLAC)") end if %> cleared up $3 15/16 to $64 15/16 after agreeing to buy the cable assets of Harron Communications for $1.17 billion in cash... Digital subscriber line (DSL) services provider Covad Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COVD)") else Response.Write("(Nasdaq: COVD)") end if %>, rated a new "buy" at Pacific Crest Securities today, piped in $19 to $100 1/2 after announcing a pact to provide DSL access to Internet service provider Frontline Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FCCN)") else Response.Write("(Nasdaq: FCCN)") end if %>. Frontline added $3 1/8 to $16 7/8 today... Outdoor furniture maker Meadowcraft <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MWI)") else Response.Write("(NYSE: MWI)") end if %> gained $1 3/16 to $7 1/4 following an $8 per share buyout bid from 73% owner and Chairman Samuel Blount, which represents a 32% premium to Friday's closing price.
Natural gas pipelines and fiber optic network operator Williams Cos. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMB)") else Response.Write("(NYSE: WMB)") end if %> flowed ahead $3 1/2 to $45 3/4 following reports that the Lithuanian government won approval to sell Williams a 66% stake in oil concern Mazheikiu Nafta... Drug wholesaler Bergen Brunswig <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBC)") else Response.Write("(NYSE: BBC)") end if %> popped up $1 1/8 to $21 after announcing at a San Diego conference that it is comfortable with Wall Street estimates of 20 percent-plus revenue increases in fiscal 1999 and mid- to high-teens revenue gains thereafter... Small business Internet services firm Netopia <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTPA)") else Response.Write("(Nasdaq: NTPA)") end if %> jumped ahead $9 1/16 to $19 13/16 after announcing that it licensed its Netopia Site Server 3.0 to Concentric Network <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNCX)") else Response.Write("(Nasdaq: CNCX)") end if %>, a provider of Internet protocol and Web hosting services. Concentric, meanwhile, grabbed $7 to $102 after announcing "ConcentricHost E-Commerce," a suite of Web development services targeting small- to medium-sized businesses.
Ford Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> drove up $15/16 to $61 1/2 after announcing that it will buy Kwik-Fit, the largest independent vehicle maintenance and light-repair chain in Europe, for about 1 billion pounds, or $1.6 billion, in cash... The world's #1 automaker General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> took $2 1/2 to $88 1/8 today; after the market's close, the company announced the approval of plans to distribute its remaining 82.3% stake in Delphi Automotive Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DPH)") else Response.Write("(NYSE: DPH)") end if %>, the world's largest auto-parts maker, to shareholders... Diversified manufacturer Tyco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TYC)") else Response.Write("(NYSE: TYC)") end if %> improved $1 15/16 to $76 1/2 following comments by Chairman Dennis Kozlowski in Barron's that from internal growth alone -- without acquisitions -- the company will be able to nearly double its sales to $40 billion and boost earnings by 20% to 25% per year over the next five to six years... International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> rolled up $2 3/16 to $46 3/8 after BT Alex. Brown upgraded the paper maker's stock to "buy" from "neutral."
Healthcare management and services company MedPartners Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDM)") else Response.Write("(NYSE: MDM)") end if %> rose $5/8 to $5 1/2. The company on Friday night said it reached an agreement with the State of California regarding the company's physician management operations in the state. At least two brokerages upgraded the stock today... Regional competitive local exchange carrier (CLEC) Advanced Communications Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ADG)") else Response.Write("(NYSE: ADG)") end if %> advanced $3 13/16 to $11 1/4 after agreeing to buy the outstanding stock of two privately traded companies -- YPtel Corp. and WebYP Inc. -- for about 15 million shares of stock. The company will be renamed Worldpages.com after the acquisition closes... Analog and mixed-signal chip maker Unitrode <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UTR)") else Response.Write("(NYSE: UTR)") end if %>, which introduced a new low-power voltage mode pulse width modulator aimed at the telecommunications markets, powered up $11/16 to $16 1/8 today... Visual information storage and processing systems company Ampex Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: AXC)") else Response.Write("(AMEX: AXC)") end if %> earned $1 1/16 to close at $5 1/8 after naming television production veteran Marc Chalom to head up its efforts to start a new group of Internet video channels.
Natural gas company Connecticut Energy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CNE)") else Response.Write("(NYSE: CNE)") end if %> heated up $1 3/8 to $26 11/16 today, reportedly on speculation that the company would be bought... Atlanta-based online bank Net.B@nk <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTBK)") else Response.Write("(Nasdaq: NTBK)") end if %>, in the midst of a surge chronicled in last week's news, added $39 to $158 1/2 after CEO D.R. Grimes hinted at an upcoming stock split and said depositor growth is ahead of internal projections... Enterprise software company Netsmart Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTST)") else Response.Write("(Nasdaq: NTST)") end if %> got $1 1/16 to close at $5 11/32 on Friday afternoon's news that management bought 248,156 shares of company stock from a subsidiary of Consolidated Technology, the company's largest shareholder, for $500,000 with an identical purchase to take place Wednesday... Internet website co-location services and direct access provider AboveNet Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ABOV)") else Response.Write("(Nasdaq: ABOV)") end if %> zoomed ahead $45 3/8 to $150 1/4 after Internet advertising company DoubleClick <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DCLK)") else Response.Write("(Nasdaq: DCLK)") end if %> chose AboveNet to co-locate its Web servers.
Year 2000 solutions company Keane <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: KEA)") else Response.Write("(AMEX: KEA)") end if %> celebrated a move up of $1 to $22 1/8 after Lehman Brothers reinstated the stock with a "neutral" rating and a 12-month price target of $25 per share... Financial services holding company Equitex <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EQTX)") else Response.Write("(Nasdaq: EQTX)") end if %> bagged $5 9/16 to $23 7/16 after reporting plans to merge with First TeleBanc Corp., the holding company for Net1Bank, which aims for online banking greatness... Heavy equipment maker Caterpillar Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAT)") else Response.Write("(NYSE: CAT)") end if %> crawled up $2 5/8 to $51 3/8 after Merrill Lynch boosted its near-term "accumulate" from "neutral," setting a $57 per share price target and maintaining a long-term "buy" rating... Cellular services company Shared Technologies Cellular <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STCL)") else Response.Write("(Nasdaq: STCL)") end if %> got $3 3/4 to $12 1/16 after Lone Star Asset Management analyst Bill Mauerman set a "strong buy" rating on the shares. Mauerman has a $45 per share 12-month price target.
Compaq Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> sank $6 11/16 to $24 1/4 after warning late Friday that its Q1 results likely will fall short of analysts' estimates, with earnings around $0.15 per share on revenues of $9.4 billion. That's less than half of the $0.31 per share analysts had been expecting for the period. In a conference call, company executives tried to quell oft-stated concerns that something is seriously wrong at the Houston-based company, laying blame for the shortfall squarely on the shoulders of "industrywide" PC pricing and demand issues. That insistence dragged other boxmakers lower today, even though it contradicted comments last week from Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> CEO Michael Dell that conditions in the industry are "healthy." Dell fell $1 3/4 to $41 13/16, Gateway <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTW)") else Response.Write("(NYSE: GTW)") end if %> slid $2 7/8 to $69 7/8, and IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> lost $2 7/8 to $183 7/16.
Wireless communications high-power radio frequency (RF) power amplifiers maker Spectrian Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPCT)") else Response.Write("(Nasdaq: SPCT)") end if %> was zapped for a $1 7/16 loss to $8 7/8 after saying higher manufacturing costs, order delays, and weak market conditions will result in fiscal Q4 revenues down 20% to 28% from last year's levels and a loss between $1.75 and $1.95 per share, worse than the Zacks' mean estimate of a loss of $0.40 per share. Unlike recent Daily Double RF Micro Devices <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RFMD)") else Response.Write("(Nasdaq: RFMD)") end if %>, which makes power amplifiers and other internal goodies for cell phone supplier Nokia <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NOK.A)") else Response.Write("(NYSE: NOK.A)") end if %>, more than half of Spectrian's revenues are derived from ground station components to wireless infrastructure firm Nortel <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NT)") else Response.Write("(NYSE: NT)") end if %>. The divergent directions of those separate markets can be seen in the two companies' recent share price movements -- Spectrian's stock has been cut in half since the beginning of the year while RF Micro Devices shares have more than doubled.
QUICK CUTS: Telecommunications equipment supplier Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> was knocked down $3 15/16 to $59 11/16 following a downgrade to "hold" from "buy" from SoundView Technology Group. An article in yesterday's New York Times also raised questions about the quality of the company's Q4 earnings... Online community operator theglobe.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGLO)") else Response.Write("(Nasdaq: TGLO)") end if %> lost $6 13/16 to $72 1/8 on dilution fears after announcing that it intends to sell four million common shares in a secondary offering, including two million shares to be sold by existing shareholders... Wound treatment programs operator Curative Health Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CURE)") else Response.Write("(Nasdaq: CURE)") end if %> was sliced $3 3/8 to $4 11/16 after the Justice Department joined a whistleblower suit against the company and hospital operator Columbia/HCA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COL)") else Response.Write("(NYSE: COL)") end if %>, alleging that Columbia and Curative worked together in a kickback scheme to defraud Medicare.
Nuclear aircraft carrier and submarine builder Newport News Shipbuilding <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NNS)") else Response.Write("(NYSE: NNS)") end if %> was torpedoed for a $3 1/16 loss to $27 11/16 after The Wall Street Journal reported that Defense Department officials are leaning toward trying to block the company's proposed merger with fellow Navy shipbuilder General Dynamics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GD)") else Response.Write("(NYSE: GD)") end if %> due to national security concerns over the ongoing consolidation of the defense industry... E-business software company Segue Software <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEGU)") else Response.Write("(Nasdaq: SEGU)") end if %> slid $1 3/16 to $5 1/2 after saying its Q1 revenues will come in between $8.3 million and $8.8 million, essentially flat with last year's $8.6 million. The company also lowered its results for Q3 and Q4 due to certain "non-compliance with ... company policies."
Information search and retrieval software developer Excalibur Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EXCA)") else Response.Write("(Nasdaq: EXCA)") end if %> was cut $1 1/4 to $17 7/8 after CE Unterberg Towbin changed its opinion on the stock to "long-term buy" from "buy," which is apparently a bad thing... Thrift holding company Golden State Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GSB)") else Response.Write("(NYSE: GSB)") end if %> fell $1 to $23 1/4 after a Federal claims court decided that the government should pay $909 million in restitution and damages for breach of contract related to a supervisory goodwill lawsuit brought by Glendale Federal Bank, which has since been absorbed by Golden State. However, some observers had expected the total award would be as high as $2 billion.
Non-laser vision correction products maker KeraVision Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KERA)") else Response.Write("(Nasdaq: KERA)") end if %> was blindsided for a $1 15/16 loss to $11 3/8 following a Goldman Sachs downgrade to "market outperform" from "recommend list"... Diversified energy company Avista Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AVA)") else Response.Write("(NYSE: AVA)") end if %> was shocked for a $1 loss to $14 13/16 after saying losses at its energy trading and marketing unit will result in Q1 EPS as much as $0.15 below the $0.49 the company said analysts had been anticipating... Semiconductor wafer fabrication systems maker Novellus Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NVLS)") else Response.Write("(Nasdaq: NVLS)") end if %> lost $7 11/16 to $56 1/4 despite reporting Q1 EPS of $0.25, down from $0.60 a year ago but in line with analysts' estimates. However, the company said it remains only "cautiously optimistic" about its future prospects.
FOOL
ON THE HILL
An Investment Opinion
by
Alex Schay
Prescription Profits
The public chain drugstores advanced almost 75% in 1998, and this heavily scrutinized segment of the market has seen valuations soar over that period. Duane Reade <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DRD)") else Response.Write("(NYSE: DRD)") end if %>, the largest drug chain in New York on the basis of sales volume, experienced some valuation deflation today dropping $1 1/2 to $24 7/8. The market is possibly pricing in yet to be revealed first quarter results and/or same store sales figures -- with most of the company's high profile brethren already coming in with strong Easter sales (CVS reported 16.9%, Walgreen came in with 15.6%, Eckerd jumped 16.8% and Rite Aid saw 10.8% growth).
Duane Reade's prescription drug sales (as reflected by same-store pharmacy sales) grew 21.5% in 1998 compared to 1997. Sales of prescription drugs represented 28.3% of total sales in 1998 compared to 25.1% of total sales in 1997. The firm has some of the lowest prescription processing numbers (per store, per week) at around 970 (Q4) compared with the big-chain average of 1100, but this is due to both the lack of third-party plans in the New York City area and the firm's business concentration in commercial areas. Prescription drug sales as a percentage of overall sales are among the lowest in the industry at Duane Reade:
Prescription Sales % Total
CVS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CVS)") else Response.Write("(NYSE: CVS)") end if %> 58%
Duane Reade <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DRD)") else Response.Write("(NYSE: DRD)") end if %> 28.3%
Longs Drug Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LDG)") else Response.Write("(NYSE: LDG)") end if %> 37% (Q1)
Rite Aid <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RAD)") else Response.Write("(NYSE: RAD)") end if %> 54.2%
Walgreens <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAG)") else Response.Write("(NYSE: WAG)") end if %> 50%
Rev./ Tot Rev./ Cap. Stores Rev. Store Sq.ft. Sq.ft. Ex. CVS 4122 15.3b 3.711m 30.6 m $500 $502.3m DRD 128 587.4m 4.589m 564,838 $1040 $33.266m
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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Contributing Writers Brian Graney (TMF Panic), a Fool David Marino-Nachison (TMF Braden), a new Fool
Editing |