FOOL PLATE SPECIAL
An Investment Opinion by MF Templar

CompUSA Slumps

COMPUSA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %> plunged $4 3/8 to $16 3/8 today on heavy volume after the personal computer retailer announced quarterly sales results for its fiscal second quarter. Although net sales increased a healthy 22% during the period to $1.20 billion, comparable store sales only edged up 1.5%, well below the 7.2% the company reported last quarter. To explain the anemic same-store sales results, Chief Executive James Halpin cited tough comparisons with the introduction of Windows 95 last year and ominously pointed to "a softening of retail sales towards the end of the holiday season."

The August 1995 introduction of Windows 95 created a huge bulge in sales in the December quarter of 1995 for retail computer outlets, making comparisons to last year tough -- something that BEST BUY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>, CIRCUIT CITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CC)") else Response.Write("(NYSE: CC)") end if %> and OFFICEMAX <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMX)") else Response.Write("(NYSE: OMX)") end if %> have been struggling with for weeks. Long viewed as immune to vagaries in the consumer diet for personal computers, CompUSA had been one of the few retail names to consistently post strong results in the face of this widespread weakness. Today Goldman Sachs slashing its rating on CompUSA, as analysts had anticipated stronger sales from the company over the crucial holiday season. The Street has been worried about sales from CompUSA since last quarter, when the company was whacked after reporting first quarter results.

If CompUSA can maintain the 2.0% profit margins it enjoyed last year, the $1.20 billion in revenues should bring $24 million to the bottom line, or roughly $0.13 to $0.14 earnings per share (EPS) adjusting for the recent split. If margins slipped because of lower-than-expected sales volumes, then the results should come in slightly below the current $0.135 EPS consensus estimates, which would be the first quarterly earnings disappointment in years. Perceived weakness at CompUSA is weighing on shares of personal computer-related stocks like U.S. ROBOTICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USRX)") else Response.Write("(Nasdaq: USRX)") end if %>, down $2 3/4 to $69 1/4 this morning, as that company is depending on strong sales of its new X2 modem technology in the last three weeks of the quarter to carry the day. DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> and CDW COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDWC)") else Response.Write("(Nasdaq: CDWC)") end if %> also were down.

UPS

STRATUS COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SRA)") else Response.Write("(NYSE: SRA)") end if %> gained $1 7/8 to $29 1/8 on a rating upgrade to "trading buy" from Goldman Sachs.

GILAT SATELLITE NETWORKS LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GILTF)") else Response.Write("(Nasdaq: GILTF)") end if %> was boosted $1 7/8 to $26 1/2 after announcing the acquisition of Skydata Inc., as well as entering into a Chinese joint venture.

Tool company STANLEY WORKS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SWK)") else Response.Write("(NYSE: SWK)") end if %> gained $2 to $29 after announcing that John Trani, formerly chief executive officer (CEO) of the Medical Systems segment of GENERAL ELECTRIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %>, will join the company as Chair and CEO.

POWERWAVE TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PWAV)") else Response.Write("(Nasdaq: PWAV)") end if %> rose $1 1/2 to $16 1/8 after Alex. Brown & Sons initiated coverage of the cellular telephone infrastructure company with a "strong buy" rating.

Healthcare software company PHAMIS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHAM)") else Response.Write("(Nasdaq: PHAM)") end if %> added $1 to $13 7/8 after announcing two contracts on New Year's Eve.

Pharmaceutical company VIVUS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VVUS)") else Response.Write("(Nasdaq: VVUS)") end if %> gained $3 3/4 to $40 after the New England Journal of Medicine reported on the efficacy of the company's drug for impotence.

DOWNS

DAYTON HUDSON CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DH)") else Response.Write("(NYSE: DH)") end if %> lost $1 1/2 to $37 3/4 after reporting that it expects December same-store sales decreases at stores other than its Target stores.

Web browser company SPYGLASS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPYG)") else Response.Write("(Nasdaq: SPYG)") end if %> lost $1 5/16 to $11 3/16 after announcing that first quarter earnings will come in at a loss of $0.10-0.13 per share and that revenues from MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> will be minimal.

NATIONAL SURGERY CENTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCI)") else Response.Write("(Nasdaq: NSCI)") end if %> fell $3 3/4 to $34 1/4 after Alex. Brown & Sons cut its rating on the outpatient surgery provider to "buy" from "strong buy" based on valuation.

OUTDOOR SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OSIA)") else Response.Write("(Nasdaq: OSIA)") end if %> slipped $2 3/8 to $25 3/4 after the advertising company announced two acquisitions earlier this week.

Retailer J.C. PENNEY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JCP)") else Response.Write("(NYSE: JCP)") end if %> fell $2 to $46 3/4 after the company warned of lower gross margins and fourth quarter earnings well below the consensus estimate of $1.49 per share.

COMPUTER ASSOCIATES INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CA)") else Response.Write("(NYSE: CA)") end if %> is down $3 3/4 to $46 on fairly heavy volume.

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO                   BORING PORTFOLIO
ATCT up $1/4 at $13 1/2        BGP down $1 1/2 at $34 3/8
AOL down $7/8 at $32 3/8       CSL down $1/2 at $60
CHV down $3/4 at $64 1/4       CSCO down $3/4 at $62 7/8
COMS down $1 at $72 3/8        GNT down $1 1/8 at $37 1/2
GM up $1/4 at $56              ORCL up $1/8 at $41 7/8
IOM unch. at $17 3/8           OXHP up $1/8 at $56 3/8
KLAC down $1 1/2 at $34        PMSI up $1/16 at $10 15/16
LU down $1/2 at $45 3/4        SLR down $1 3/8 at $52
MMM down $5/8 at $82 3/8       TDW down $3/8 at $44 7/8
T up $1/2 at $41 7/8