THE MOTLEY FOOL LUNCHTIME NEWS: Tuesday, May 14, 1996

FOOL PLATE SPECIAL

MedPartners <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDM)") else Response.Write("(NYSE: MDM)") end if %> is buying rival Caremark <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CK)") else Response.Write("(NYSE: CK)") end if %> in a $2.5 billion deal that will create the largest physician practice management company in the world. In a stock-for-stock deal, Caremark shareholders will get 1.21 shares of MedPartners for every share of Caremark they have tucked away. The transaction needs to be approved by the boards of both companies, but preliminary statements from MedPartners suggests that this deal will add 13% to 14% to fiscal 1996 earnings, 10% to fiscal 1997 earnings and allow MedPartners to continue to grow at 30%-plus per year for the foreseeable future.

MedPartners has been on a bit of an acquisition roll in the last few months, buying privately-held Mullikin in August of 1995 and Pacific Physician Services in December of 1995. The company has removed most of its larger rivals and has given it a nationwide base of physician practices to manage -- theoretically driving down fixed costs and allowing the company to leverage an unprecedented nationwide network. Caremark manages prescription drug benefits programs as well as offering orthopedic and oncological services to physician practices, adding crucial competencies to the MedPartners monolith. Caremark was spun off from Baxter International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAX)") else Response.Write("(NYSE: BAX)") end if %> in 1992 due to conflicts between the unit's goals and Baxter's hospital supply customer base.

UPGRADES & DOWNGRADES

Morgan Stanley upped Ortel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ORTL)") else Response.Write("(NASDAQ: ORTL)") end if %> from "outperform" to "strong buy" this morning, sending the stock up $2 to $19. Morgan Stanley helped to underwrite the telecommunications services company's initial public offering (IPO) in late 1994.

Entertainment console manufacturer 3DO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: THDO)") else Response.Write("(NASDAQ: THDO)") end if %> rose $2 5/8 to $12 5/8 after Morgan Stanley raised the stock from "neutral" to "outperform".

Merrill Lynch initiated Ciber Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CIBR)") else Response.Write("(NASDAQ: CIBR)") end if %> with an "intermediate- to long-term buy" rating today, boosting the shares $3 1/2 to $43 1/4.

Contradicting some of their peers yesterday, PaineWebber moved ValuJet <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: VJET)") else Response.Write("(NASDAQ: VJET)") end if %> up to a "buy" from "attractive", moving the stock of the beleaguered discount airline up $1 to $14 11/16.

EARNINGS SURPRISES

Manhattan Bagel's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BGLS)") else Response.Write("(NASDAQ: BGLS)") end if %> first quarter earnings caused the stock to soar $1 to $26 this morning, as it posted $0.12 EPS versus only $0.03 EPS a year ago.

Upscale retailer Williams-Sonoma <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: WSGC)") else Response.Write("(NASDAQ: WSGC)") end if %> rose $7/8 to $27 3/8 after the company reported an operating loss of $0.09 EPS, one penny better than the consensus estimates.

United American Healthcare <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UAH)") else Response.Write("(NYSE: UAH)") end if %> dropped $2 1/4 to $12 1/4 after reporting a loss of $0.13 EPS versus net profit of $0.33 EPS a year ago.

Semiconductor manufacturer Hadco Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HDCO)") else Response.Write("(NASDAQ: HDCO)") end if %> beat estimates of $0.70 EPS by a penny, but still sold off $3 3/8 to $24 1/8 on its decreasing backlog and possible comments by management in the conference call about a lack of visibility in forward quarters.

ODDS & ENDS

Tecnomatix <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TCNOF)") else Response.Write("(NASDAQ: TCNOF)") end if %> rose $2 1/2 to $21 1/8 after its announcement late yesterday that it would hold a secondary offering where it would issue about 2.5 million more shares.

Zenith Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZE)") else Response.Write("(NYSE: ZE)") end if %> continued to sell off, down $7/8 to $14 1/8, only two weeks after the television manufacturer was magically transformed by market frenzy into the harbinger of the Digital Age.

Freidman's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: FRDM)") else Response.Write("(NASDAQ: FRDM)") end if %> slumped $1 1/8 to $23 7/8 after the company announced a dilutive public offering of 2.2 million shares to extinguish cash-sucking debt.

The Wall Street Journal's "Heard on the Street" column mashed APAC Teleservices <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: APAC)") else Response.Write("(NASDAQ: APAC)") end if %> for $1 3/4, falling to $82, after it simply pointed out that the stock trades at 200 times earnings and 20 times sales.

Del Global Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: DEL)") else Response.Write("(AMEX: DEL)") end if %> dropped $1 to $13 1/4 after the company surged earlier in the week as a result of a column in the New York Post.

Cardinal Bancshares <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CARD)") else Response.Write("(NASDAQ: CARD)") end if %>, following yesterday's announcement of approval from shareholders to spin off its Security First Network Bank, rose $4 3/4 to $86 1/2.

NOTE:

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Randy Befumo (MF Templar), a Fool
Selena Maranjian (MF Selena), another Fool

Transmitted: 05/14/96