Wednesday, May 8, 1996
THE MARKET MIDDAY
FOOL PLATE
SPECIAL
Blowing Off the Foam
Somebody apparently set the ticker tape to run backwards today, as Fools
saw some of the recent gains in a number of stocks disappear as fast as they
came. Removable drive manufacturer Iomega <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IOMG)") else Response.Write("(NASDAQ: IOMG)") end if %> slipped $4 7/8 to
$61 1/8 while chip-maker IMP Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IMPX)") else Response.Write("(NASDAQ: IMPX)") end if %> slumped $1 1/8 to $17, proving
yet again that fast gains are normally offset by equally fast losses. Ion
Laser Tech <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX:ILT)") else Response.Write("(AMEX:ILT)") end if %>, off $3 7/8 to $25, and Barra <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BARZ)") else Response.Write("(NASDAQ: BARZ)") end if %>, down
$3 3/8 to $24 3/8, also were seen trying to prove Newton's law of gravity
on no known press releases. If it was not no news, it was good news. America
Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMER)") else Response.Write("(NASDAQ: AMER)") end if %> dropped $6 3/8 to $63 5/8 after beating consensus estimates
for earnings and revenues. Quick gains followed by quick losses mean that
there is a lot of uncertainty out there. Fools are cautioned to keep in mind
that it is at the moments of maximum uncertainty that true bargains become
apparent.
The most stunning show was a series of stocks that have been powered upward
by Carl Lutz's Cabot Market Newsletter. Given that Fools eschew newsletters,
you might not know that Mr. Cabot has managed an average 10.2% return over
the past 15 years according to Hulbert's Financial Digest before commissions
and spreads were deducted. This is compared to 14.8% for the S&P 500,
a return easily duplicated with an index fund. Despite this lackluster showing,
readers of the Cabot Letter buy the heck out of stocks. . . names like Presstek
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PRST)") else Response.Write("(NASDAQ: PRST)") end if %>, Zoltek <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ZOLT)") else Response.Write("(NASDAQ: ZOLT)") end if %>, RGB Computer & Video <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:EDIT)") else Response.Write("(NASDAQ:EDIT)") end if %>, and now JLG Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: JLGI)") else Response.Write("(NASDAQ: JLGI)") end if %> are all, in part, products of
Cabot. JLG Industries climbed $5 3/4 to $61 1/4 after a Cabot recommendation,
although its brethren fared more poorly: Presstek fell $6 1/4 to $141 3/4,
Zoltek was off $8 5/8 to $82 and RGB Computer was down $2 1/2 to $13 1/4.
As Fools are never nimble traders and Cabot's longer-term record is quite
ugly, I would evaluate any stock it recommends on its own merits.
UPGRADES & DOWNGRADES
Amerin Corp. (AMRN), which provides private mortgage insurance, rose $1
3/4 to $22 1/2 after Donaldson, Lufkin & Jenrette upped its rating to
"buy" from "outperform".
EARNINGS SURPRISES
America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMER)") else Response.Write("(NASDAQ: AMER)") end if %> beat consensus earnings estimates of $0.13
per share (EPS) by a penny today, even after taking about one and a half
cents in charges for amortiziation and the acquisition of Ubique. The company
slipped $6 3/8 to $63 5/8 in spite of announcing members at 5.5 million
subscribers, a new Japanese joint venture and a new 20-hours-for-$20 price
option.
Connectivity equipment provider Summa Four <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SUMA)") else Response.Write("(NASDAQ: SUMA)") end if %> neatly beat
estimates of $0.11 EPS by four cents, rising $1 to $18 today.
Fax-sender Xpedite Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: XPED)") else Response.Write("(NASDAQ: XPED)") end if %> popped up $3/4 to $19 1/4 after
it beat consensus estimates by a nickel, reporting $0.29 EPS.
Protective gear manufacturer Bacou USA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BACU)") else Response.Write("(NASDAQ: BACU)") end if %> rose $2 3/8 to $18
5/8 after reporting earnings of $0.25 EPS versus $0.30 EPS in the year-ago
period.
Iomega competitor Syquest <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SYQT)") else Response.Write("(NASDAQ: SYQT)") end if %> apparently performed a wonder
rarely seen on Wall Street -- they actually managed to lose more money than
they took in as revenues. Restructuring its failed removable drive operations,
the stock slumped $5/8 to $5.
Happiness Express <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HAPY)") else Response.Write("(NASDAQ: HAPY)") end if %>, down $1 1/2 to $2 3/8, made for some
very unhappy shareholders today when it reported that losses for the year
would be wider than expected and it might have to restate some prior 1996
quarters due to accounting irregularities. The company develops children's
room decor and toy-related products.
Text-searching and retrieval software provider Excalibur Technologies
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: EXCA)") else Response.Write("(NASDAQ: EXCA)") end if %> was whacked for $5 1/4 to $20 3/4 after pre-announcing a first
quarter loss on only 10% greater revenues.
Recent initial public offering (IPO) Wilmar Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: WLMR)") else Response.Write("(NASDAQ: WLMR)") end if %>
dropped $2 to $23 3/4 after it reported $0.10 EPS versus $0.07 EPS last year.
Wilmar markets and distributes repair and maintenance products to the housing
industry.
ODDS & ENDS
Medical-device maker Target Therapeutics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TGET)") else Response.Write("(NASDAQ: TGET)") end if %> rose $3 3/8 to
$48 1/2 after a court granted the company a temporary injunction against
Cordis and SciMed, preventing the companies from infringing on Target's
microcatheter patent.
News late yesterday that Synopsys <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SNPS)") else Response.Write("(NASDAQ: SNPS)") end if %> will buy 9.9% of recent
IPO Cooper & Chyan Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CCTI)") else Response.Write("(NASDAQ: CCTI)") end if %> set Cooper on fire today,
rising $7/8 to $17 5/8. Synopsys is paying $14.50 a share, improving its
market position in the semiconductor electronic design automation (EDA) market
and getting quite a deal in the bargain.
Penny stock follies continued today. "Investors" in Comparator Systems
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IDID)") else Response.Write("(NASDAQ: IDID)") end if %> got a rude awakening when the stock dropped $1/4 to $5/8 --
a 28.6% loss. Perhaps they are moving to Curtis Mathes Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CRTM)") else Response.Write("(NASDAQ:CRTM)") end if %>, another questionable company with a supposedly new kind of television
in development, up a ridiculous percentage today.
Zytec <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ZTEC)") else Response.Write("(NASDAQ: ZTEC)") end if %> continued to struggle after the Boring Portfolio
decided to sell its shares, down another $3 21/64 to $34 today.
Micrion <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MICN)") else Response.Write("(NASDAQ: MICN)") end if %> fell $5/8 to $29 3/4 today after announcing a
settlement with KLA Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: KLAC)") else Response.Write("(NASDAQ: KLAC)") end if %> over some patent issues, saying
it will take a $0.65 EPS fourth quarter charge to pay off KLA.
Initial public offering (IPO) Nova Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NIS)") else Response.Write("(NYSE: NIS)") end if %> slipped $1 1/4 to
from its first trade of $29, another piece of evidence that blindly buying
IPOs can send one quickly to the poorhouse.
Advanced Magentics <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: AVM)") else Response.Write("(AMEX: AVM)") end if %> is up $3 1/4 to $21 1/2 after it announced
a share buyback of 250,000 shares. They have 6.8 million outstanding.
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Randy Befumo (MF Templar), a
Fool Transmitted: 05/07/96
Selena Maranjian (MF Selena),
another Fool