Investment Opinion
FOOL PLATE
SPECIAL
WESTINGHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WX)") else Response.Write("(NYSE: WX)") end if %> continues to transform itself from a moribund industrial giant to a reinvigorated broadcasting behemoth, announcing the acquisition of radio superpower INFINITY BROADCASTING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: INF)") else Response.Write("(NYSE: INF)") end if %> this morning. Shareholders of Infinity Broadcasting will received 1.71 shares of Westinghouse for each share of Infinity -- an implied valuation of $32 1/4 for each share of Infinity. Including debt and netted-out cash, the price tag for this acquisition looks to be $2.94 billion to this Fool, although $3.9 billion is the number that the media is throwing around.
"I have been saying for a while that radio was the real hidden jewel [of the CBS/Westinghouse combination]", Westinghouse Chairman and Chief Executive Officer (CEO) Michael Jordan announced today at a press conference. Jordan views the opportunities in radio as superior to the opportunities in network television in the post telecommunications-reform universe. Infinity and Westinghouse will now have combined trailing radio revenues of $1 billion. The combined radio group will have an astounding 83 radio stations in 16 markets, giving it a strong position in all U.S. radio markets.
The main beneficiaries of today's move are the shareholders of other publicly-traded radio concerns, as their valuations shot up this morning. AMERICAN RADIO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMRD)") else Response.Write("(NASDAQ: AMRD)") end if %> rose $2 to $36 1/2, EVERGREEN MEDIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: EVGM)") else Response.Write("(NASDAQ: EVGM)") end if %> surged $2 to $43 3/4, EMMIS BROADCASTING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: EMMS)") else Response.Write("(NASDAQ: EMMS)") end if %> was up $1 to $43 3/4 and CHANCELLOR BROADCASTING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CBCA)") else Response.Write("(NASDAQ: CBCA)") end if %> rose $3/4 to $27.
Local area networker CABLETRON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CS)") else Response.Write("(NYSE: CS)") end if %> rose $1 7/8 to $67 3/8 this morning after posting quarterly earnings of $0.87 EPS, a cool penny above consensus expectations.
CHATTEM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CHTT)") else Response.Write("(NASDAQ: CHTT)") end if %> reported $0.26 in earnings from continuing operations this morning, up from a mere $0.09 EPS a year ago. Shares were boosted $1 1/8 to $9 1/4.
Punk Ziegel, possibly the best-named brokerage firm on the planet, moved IMNET SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IMNT)") else Response.Write("(NASDAQ: IMNT)") end if %> to "aggressive buy" from "buy" this morning, causing it to rise $3 to $31 1/4 after the firm set a price target of $50.
Some stocks that have been slaughtered in the past few days have begun to rebound: CALIFORNIA AMPLIFIER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CAMP)") else Response.Write("(NASDAQ: CAMP)") end if %> rose $1 1/8 to $22 1/8, ZYTEC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ZTEC)") else Response.Write("(NASDAQ: ZTEC)") end if %> moved up $1 1/4 to $15 1/4, AMATI COMM. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMTX)") else Response.Write("(NASDAQ: AMTX)") end if %> increased $31/64 to $20 7/64 and IOMEGA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IOMG)") else Response.Write("(NASDAQ: IOMG)") end if %> climbed $1 5/8 to $31 1/4 -- all on no appreciable news.
OSHKOSH B'GOSH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GOSHA)") else Response.Write("(NASDAQ: GOSHA)") end if %> announced yesterday it would be taking a charge next quarter to close an unprofitable plant, a move that the Street rewarded today by bidding the shares up $1 1/2 to $18 1/8.
STRUCTURAL DYNAMICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SDRC)") else Response.Write("(NASDAQ: SDRC)") end if %> recovered $1 7/16 to $21 3/16 this morning after getting pounded two days ago when Adams Harkness raised its rating on a competitor, PARAMETRIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PMTC)") else Response.Write("(NASDAQ: PMTC)") end if %>.
BE AEROSPACE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BEAV)") else Response.Write("(NASDAQ: BEAV)") end if %> rose $1 1/8 to $14 after reporting a profit in its fiscal first quarter versus a massive loss after a charge last year.
TEKTRONIX <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TEK)") else Response.Write("(NASDAQ: TEK)") end if %> moved up $3 5/8 to $42 1/8 this morning after beating consensus estimates by a penny with $0.86 EPS. Salomon, Goldman and Jensen all took advantage of the rally to move up their ratings on the shares.
Seeing the success paper giant BOISE CASCADE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BCC)") else Response.Write("(NYSE: BCC)") end if %> has had since it spun off its office products unit, ALCO-STANDARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASN)") else Response.Write("(NYSE: ASN)") end if %> announced this morning that it would do the same. So why is it off $9 5/8 to $49? Because it also said third quarter earnings would be light.
BANK OF NEW YORK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BKNYW)") else Response.Write("(NASDAQ: BKNYW)") end if %> got mashed for $2 7/8 to $40 5/8 after the company announced that it would use the proceeds from the sale of a large credit-card portfolio to create a $350 million charge-off provision for its remaining credit card operations. Financials were whacked, including: DEAN-WITTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DWD)") else Response.Write("(NYSE: DWD)") end if %> down $1 5/8 to $56 7/8, FIRST USA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FUS)") else Response.Write("(NYSE: FUS)") end if %> lost $2 3/4 to $54 1/4, and the THE MONEY STORE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MONE)") else Response.Write("(NYSE: MONE)") end if %> was off $1 1/8 to $21 3/4.
A rising medical loss ratio combined with the announcement of lower-than-expected profits crushed HMO RIGHTCHOICE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RIT)") else Response.Write("(NYSE: RIT)") end if %>, down $2 3/8 to $13 5/8. Also down in sympathy: OXFORD HEALTH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: OXHP)") else Response.Write("(NASDAQ: OXHP)") end if %> off $2 1/4 to $39 1/8, UNITED HEALTHCARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UNH)") else Response.Write("(NYSE: UNH)") end if %> losing $2 1/8 to $48 3/4 and PACIFICARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PHSYA)") else Response.Write("(NYSE: PHSYA)") end if %> down $1 1/2 to $70 1/2.
TEXLON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TLXN)") else Response.Write("(NASDAQ: TLXN)") end if %> got mashed for $4 1/16 to $10 7/16 after reporting that it will lose $0.50 EPS in the first half of 1997. Hambrecht & Quist cut the stock to "hold" from "buy" as a result.
MICROCOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MNPI)") else Response.Write("(NASDAQ: MNPI)") end if %> continued to slide, down $3/8 to $11 1/4 over growing concerns that the remote access provider will not meet upcoming earnings estimates.
PRESSTEK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PRST)") else Response.Write("(NASDAQ: PRST)") end if %> continued to get mashed, down $5 3/8 to $44 7/8 today, after revising earnings down to $0.06 EPS from $0.10 EPS in the last quarter in a dispute over accounting conventions. Presstek shares hit a high of $200 about a month and a half ago.
READ-RITE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RDRT)") else Response.Write("(NASDAQ: RDRT)") end if %> lowered third quarter earnings expectations due to order cancellations, and fell $13/16 to $14 3/8 for its troubles.
STANFORD TELECOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: STII)") else Response.Write("(NASDAQ: STII)") end if %>, which enjoyed a run-up early in the quarter based on high-speed Internet access hopes, lost $3 3/4 to $41 3/4 today. Another Internet related-company, NAVARRE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: NAVR)") else Response.Write("(NASDAQ: NAVR)") end if %> dropped $1 5/8 to $21 5/8 as well. Speculation is that portfolio managers are cleansing portfolios of some of their more speculative stocks.
Randy Befumo (MF Templar), a
Fool
Selena Maranjian (MF Selena),
another Fool