FOOL PLATE SPECIAL
An Investment Opinion by MF Templar

Deja Vu at 3COM

3COM <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> is being slaughtered today, down $10 7/8 to $39 7/8 after the Santa Clara, California-based manufacturer of networking gear announced it would not make its third quarter estimates. The stock has been getting pasted over the past few trading sessions after Chief Executive Eric Benhamou told analysts on January 28th that the company had seen slight weakness in December. The revelation caused analysts to get antsy about 3Com's February quarter, and they lowered ratings and earnings estimates all last week. 3Com's fiscal third quarter is a difficult quarter to predict due to seasonal weakness in the networking business. Apparently, the analysts did not slice enough.

3Com revealed that revenue for the quarter would be in the $770 to $810 million range, well above the $606 million the company booked last year, but sequentially down from $820.3 million last quarter. Net profits will be supressed as well, hitting the mid-$0.40 earnings per share (EPS) to low $0.50 EPS range compared to $0.42 EPS last year and well below the $0.64 EPS consensus estimates. The financial damage has been caused by aggressive price cuts across 3Com's product line, most notably on its fast EtherLink XL 10/100 PCI cards where the company has just knocked the price down as low as $94 each in lots of 100 compared to the previous $135 each in 100 packs. 3Com is matching the price cuts that INTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> made on competing adapter cards last week. 3Com will also lower prices in its lower-end hub and switch product line to spur demand.

3Com has rarely seen dramatic drops in its stock price this decade. In fact, there are really only two comparable days in 3Com's history. On August 29, 1990, shares lost more than one-third their value after a conference call where 3Com's management discussed the "declining economy and near-term impact on the company." Analysts at the time saw earnings coming in below estimates due to poor visibility. On May 28, 1993, 3Com was whacked for more than 30% after Merrill Lynch and Wessels, Arnold & Henderson cut their ratings on the stock. At the time, 3Com's efforts to move heavily into the router and hub market were not going very smoothly. 3Com's woes are yanking down many other companies in networking space, as detailed in today's Downs.

UPS

Subacute healthcare provider THERATX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: THTX)") else Response.Write("(Nasdaq: THTX)") end if %> gained $3 1/2 to $16 5/8 after agreeing to merge with VENCOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VC)") else Response.Write("(NYSE: VC)") end if %> in a deal valuing TheraTx at $17.10 per share.

PLASMA & MATERIALS TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PMAT)") else Response.Write("(Nasdaq: PMAT)") end if %> bolted $4 1/8 higher to $16 after the semiconductor equipment company announced an advance in dielectric insulating materials, a "breakthrough in semiconductor manufacturing" that will speed up semiconductors.

Life science research outsourcer TRIPOS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TRPS)") else Response.Write("(Nasdaq: TRPS)") end if %> picked up $2 1/8 to $22 5/8 after reporting Q4 earnings per share (EPS) of $0.32, smoking estimates of $0.22 per share.

COLE TAYLOR FINANCIAL GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CTFG)") else Response.Write("(Nasdaq: CTFG)") end if %> gained $1 1/2 to $19 1/4 after the company announced it will complete the spin-off of its Cole Taylor Bank subsidiary, distancing that company from the used-car lending side of the business.

Year 2000 solutions company ACCELR8 TECHNOLOGY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACLY)") else Response.Write("(Nasdaq: ACLY)") end if %> gained $3/4 to $15 1/2 as the Y2K convention continues in Washington, D.C.

TELCO COMMUNICATIONS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCGX)") else Response.Write("(Nasdaq: TCGX)") end if %> gained $1 3/4 to $17 after Donaldson, Lufkin & Jenrette started coverage of the long-distance discounter with a "buy" rating.

After filing to sell 20% of its Hartford Life unit in an initial public offering, ITT HARTFORD GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HIG)") else Response.Write("(NYSE: HIG)") end if %> was marked up $3 3/4 to $79 by happy investors.

SEA CONTAINERS LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SCR.A)") else Response.Write("(NYSE: SCR.A)") end if %> added $1 to $18 3/8 after the container leasing company, a perpetual value investor's favorite, was mentioned by Al Frank of the Prudent Speculator in this weekend's Barron's.

Fingerprint identification systems company IDENTIX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: IDX)") else Response.Write("(AMEX: IDX)") end if %> surged $1 7/8 to $12 5/8 after announcing its systems will be integrated in the next release of ORACLE's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %> Universal Server.

DOWNS

CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %> fell $4 5/8 to $58 1/2 on the 3Com news, which is regarded by most analysts of the sector as unrelated to Cisco's fortunes. FORE SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FORE)") else Response.Write("(Nasdaq: FORE)") end if %> also lost $2 1/2 to $27; CABLETRON SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CS)") else Response.Write("(NYSE: CS)") end if %> slid $2 to $28 7/8; ASCEND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %> fell $5 5/8 to $61 5/8; and XYLAN <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XYLN)") else Response.Write("(Nasdaq: XYLN)") end if %> ticked down $1 1/4 to $19 1/8.

Intermodal marine containers lessor CRONOS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CRNSF)") else Response.Write("(Nasdaq: CRNSF)") end if %> dropped $2 1/2 to $4 after a number of board members, as well as the company's auditor, resigned. The company is a competitor of the above-mentioned Sea Containers Ltd.

LOMAK PETROLEUM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LOM)") else Response.Write("(NYSE: LOM)") end if %> was hit for a $2 1/4 loss to $18 1/8 as Prudential cut its rating on the company to "sell" from "hold" after the energy exploration and production company reported earnings last Thursday. NEWFIELD EXPLORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NFX)") else Response.Write("(NYSE: NFX)") end if %> was also cut to "sell" from "hold" by the same analyst.

Telco equipment company ECI TELECOM LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ECILF)") else Response.Write("(Nasdaq: ECILF)") end if %> fell $1 1/8 to $21 7/8 after reporting Q4 EPS of $0.37, a wee bit shy of estimates of $0.38.

OAK INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OAK)") else Response.Write("(NYSE: OAK)") end if %> lost $7/8 to $19 7/8 as the telco equipment components supplier reported fourth quarter EPS of $0.30, falling short of estimates of $0.35.

Life sciences equipment maker BIO-RAD LABS <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: BIO.A)") else Response.Write("(AMEX: BIO.A)") end if %> lost $3 to $28 on continued fallout from last week's report of a 40% decline in pre-charge net income.

GAYLORD ENTERTAINMENT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GET)") else Response.Write("(NYSE: GET)") end if %> dropped $2 3/4 to $22 5/8 on agreeing to sell its Nashville Network and Country Music Television cable outlets to WESTINGHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WX)") else Response.Write("(NYSE: WX)") end if %> for $1.55 billion.

CHESAPEAKE ENERGY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHK)") else Response.Write("(NYSE: CHK)") end if %> fell $2 5/8 to $20 3/8 on the apparent sector call from Prudential Securities today and recent weakness in spot oil prices. PRECISION DRILLING CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PDS)") else Response.Write("(NYSE: PDS)") end if %> also slid $3 to $43 1/4.

Well servicing company PRIDE PETROLEUM SERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRDE)") else Response.Write("(Nasdaq: PRDE)") end if %> didn't escape the damage, falling $1 3/8 to $18 7/8. On Friday, the company filed to sell $500 million in securities.

DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> lost $2 7/8 to $62 7/8 despite the decrease in pricing for complementary products, namely network adapter cards. One company that does make such products for laptop PCs, XIRCOM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XIRC)") else Response.Write("(Nasdaq: XIRC)") end if %> lost $2 to $25 1/8.

Due to the freak-out with networking companies, LEVEL ONE COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LEVL)") else Response.Write("(Nasdaq: LEVL)") end if %>, a supplier of communications semiconductors, lost $3 1/8 to $28 1/4.

HELD

Finance company THE THAXTON GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: THAX)") else Response.Write("(Nasdaq: THAX)") end if %> pre-announced last Friday that it will report a Q4 loss of $0.07-0.14 per share due to the company's strengthening reserves against possible losses in auto financing.

CONFERENCE CALLS

RAINFOREST CAFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %>
(402) 222-9929 -- through February 11

CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>
(800) 633-8284 in USA
(303) 446-5399 elsewhere
passcode: 2338711#

ANN TAYLOR STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ANN)") else Response.Write("(NYSE: ANN)") end if %>
(re: January sales)
(402) 351-9977 -- replay through 5:30 PM EST on 2/14

ALLIED SIGNAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALD)") else Response.Write("(NYSE: ALD)") end if %>
(800) 633-8284 (reservation # 2216671)
replay avail. thru 2/13

02/11/97 (Tuesday)
APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %>
(800) 642-1687 (access code: 221082) -- replay after 5:30

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO                  BORING PORTFOLIO
ATCT down $1 1/4 at $6 1/4       BGP down $1/4 at $41 3/4
AOL down $1 at $34 7/8           CSL up $3/8 at $31 5/8
CHV down $1/8 at $65 5/8         CSCO down $4 7/8 at $58 1/4
COMS down $10 5/8 at $40 1/8     GNT unch. at $39
GM down $1/4 at $56 1/2          ORCL unch. at $40
IOM down $1/8 at $16 3/4         OXHP down $3/4 at $50 5/8
KLAC down $5/8 at $40            PMSI down $3/8 at $11 1/2
LU down $1/8 at $54 3/4          SLR down $3/8 at $55 3/4
MMM down $1/8 at $84 1/4         TDW down $3/8 at $42 1/2
NCR up $1/4 at $36 1/8
T up $5/8 at $38 7/8