The Lunchtime News - Tuesday, February 25, 1997

FOOL PLATE SPECIAL
An Investment Opinion by MF Templar

One Week 'til D-Day

CENTENNIAL TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CTN)") else Response.Write("(NYSE: CTN)") end if %> emerged from the ashes this morning to rise $2 7/8 to $7 3/8. The PC card manufacturer crumpled during the first few weeks of this month after the firm announced it would have to materially restate first and second quarter earnings due to financial improprieties. Former Chief Executive Emanuel Pinez has been arrested and charged with securities fraud as a result of an elaborate scheme whereby he sold a tremendous amount of stock in the company in the days leading up to his dismissal. Pinez is alleged to have knowingly misrepresented the true financial state of the company, arranging to secretly purchase Centennial products with his own funds and overstating inventories in an effort to meet analyst expectations. Centennial also relieved Chief Financial Officer James Murphy of his post, although he remains on the company payroll.

Today's rise in the stock has been linked to the belief among some investors that Pinez was the reason for all of the problems. The company attracted a large following among William O'Neil-style CANSLIM investors, momentum investors and short-term traders last year when it racked up the single biggest percentage gain on the New York Stock Exchange (NYSE) for 1996. Investors were encouraged last week when consultant Lawrence J. Ramaekers was named interim Chief Executive. He stressed that his first mission would be to "reassure customers and investors that it plans to stay in business." Ramaekers said the company would have to at least restate its last five quarters. Another outsider was brought into the company as the interim Chief Financial Officer, and a team of board members is still trying to untangle the complicated financial wranglings Pinez has left in his wake.

The NYSE is pretty peeved at Centennial, stating that the company's financial statements from 1996 and the first two quarters of 1997 ''should not be relied upon.'' Investors purchasing the stock today need to recognize that the Exchange has said that it will suspend trading in Centennial on March 3rd. During the suspension, the NYSE will seek to delist the company entirely from the exchange because of its falsification of financial statements. Investors who recall a similar scandal at CD-ROM developer Media Vision will remember that even after revised financials were released, the stock fell quickly into the pennies, eventually being completely delisted from all legitimate exchanges. Although Centennial still has the attention of a number of overeager traders and investors, without reliable financial statements from the company no prudent investor should put his savings in a firm that stands a good chance of not trading on a legitimate exchange within a week.

UPS

Direct broadcast satellite company ECHOSTAR COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DISH)") else Response.Write("(Nasdaq: DISH)") end if %> was launched $9 to $27 after announcing that NEWS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> will take a 50% position in EchoStar through the contribution of cash, ASkyB satellites, and other assets. MCI <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCIC)") else Response.Write("(Nasdaq: MCIC)") end if %> will own 10% of EchoStar by virtue of ownership of 20% of News Corp's stake.

THERAGENICS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: THRX)") else Response.Write("(Nasdaq: THRX)") end if %> was propelled $6 higher to $24 1/8 after the company granted worldwide marketing distribution rights to its Theraseed prostate cancer treatment to JOHNSON & JOHNSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %>.

Biotech company CERUS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CERS)") else Response.Write("(Nasdaq: CERS)") end if %> rose $2 1/8 to $10 1/2 after Morgan Stanley, lead underwriter of the company's recent IPO, initiated coverage with a "strong buy" rating.

WINSTAR COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCII)") else Response.Write("(Nasdaq: WCII)") end if %> leapt $2 5/32 to $13 3/32 after yesterday's slump due to a wireless local loop announcement from AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>. Winstar also announced a $450 million debt offering, signaling to nervous holders that institutional investors are still onboard.

Brain cancer treatment developer GUILFORD PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GLFD)") else Response.Write("(Nasdaq: GLFD)") end if %> moved up $1 1/2 to $26 1/4 after the company and marketing partner RHONE POULENC RORER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RPR)") else Response.Write("(NYSE: RPR)") end if %> announced the availability of the Gliadel Wafer in the U.S.

EAGLE HARDWARE & GARDEN <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EAGL)") else Response.Write("(Nasdaq: EAGL)") end if %> rose $2 to $18 1/4 after announcing that it will release earnings a week earlier than expected.

Teleservices company PRECISION RESPONSE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRRC)") else Response.Write("(Nasdaq: PRRC)") end if %> gained $2 7/8 to $30 1/8 after Merrill Lynch, a member of the syndicate that distributed the company's IPO last summer, initiated coverage with "intermediate- and long-term buy" ratings.

MOLECULAR DYNAMICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MDYN)") else Response.Write("(Nasdaq: MDYN)") end if %> rose $1 3/8 to $14 1/2 after Hambrecht & Quist raised its rating on the DNA sequencing systems maker to "strong buy" from "buy."

Turbine engine parts manufacturer GRAHAM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GHM)") else Response.Write("(AMEX: GHM)") end if %> gained $1 3/4 to $12 3/4 after reporting a 37% increase in Q4 earnings from continuing operations.

COCA-COLA FEMSA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KOF)") else Response.Write("(NYSE: KOF)") end if %> moved up $3 5/8 to $36 after the Mexican beverage company-COKE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> joint venture reported a near tripling in Q4 earnings in peso terms.

Retailer HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %> gained $1 5/8 to $53 7/8 on reporting Q4 earnings per share (EPS) of $0.52, beating estimates of $0.49, on a 32% increase in quarterly sales of $4.96 billion.

KIMBERLY CLARK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KMB)") else Response.Write("(NYSE: KMB)") end if %> gained $3 3/4 to $105 3/4 after Goldman Sachs raised its rating on the consumer products company.

Remote access software company XCELLENET INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XNET)") else Response.Write("(Nasdaq: XNET)") end if %> moved up $2 to $18 1/4 after the company announced a 1.5 million secondary offering, including 730,000 shares owned by MOTOROLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %>.

SUPERIOR TELECOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SUT)") else Response.Write("(NYSE: SUT)") end if %> gained $2 to $25 1/2 after the telecommunications equipment manufacturer reported Q1 EPS of $0.47, beating estimates of $0.32.

Microwave communications equipment maker REMEC INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: REMC)") else Response.Write("(Nasdaq: REMC)") end if %> moved up $2 1/4 to $28 3/4 on announcing a 100% increase in Q4 EPS of $0.18 and the proposed merger of the company with a privately-held components supplier.

DOWNS

Pharmaceutical testing company CLINTRIALS RESEARCH <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CCRO)") else Response.Write("(Nasdaq: CCRO)") end if %> fell $6 3/4 to $16 1/2 after Wessels Arnold dropped its rating on the company, according to Dow Jones.

CENTIGRAM COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CGRM)") else Response.Write("(Nasdaq: CGRM)") end if %> fell $1 5/8 to $12 1/8 after the voice messaging and communications systems company reported Q1 EPS of $0.10, missing estimates of $0.18 due to lower-than-expected revenues from a European customer.

Explosives detection systems maker VIVID TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VVID)") else Response.Write("(Nasdaq: VVID)") end if %> lost $2 3/4 to $21 3/4 on a Lehman Brothers downgrade to "outperform" from "strong buy."

NETCOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETC)") else Response.Write("(Nasdaq: NETC)") end if %> slid $1 3/16 to $10 1/4 after CS First Boston cut its rating on the Internet service provider to "hold" from "buy."

Investors dropped TELE-COMMUNICATIONS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %> shares $1 1/8 to $12 7/8 fearing death from above, delivered from the orbiting News Corp.-EchoStar direct broadcast battle stations.

APPLIED MAGNETICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: APM)") else Response.Write("(NYSE: APM)") end if %> lost $3 to $50 as investors analyze the company's hostile offer for rival disk drive head maker READ-RITE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RDRT)") else Response.Write("(Nasdaq: RDRT)") end if %>.

Energy exploration company BELCO OIL & GAS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOG)") else Response.Write("(NYSE: BOG)") end if %> fell $3 3/8 to $19 5/8 after Smith Barney cut its rating on the company to "neutral" from "accumulate."

CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %> lost $2 7/8 to $56 1/8 after the company said that its sales growth will slow. Cisco also said that it is more dependent upon capital spending cycles rather than secular growth of its markets, and it will slow hiring in its third quarter to 400-500 people.

CONFERENCE CALLS

DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>
replay avail. at 7:30 PM EST for 24 hrs.
(800) 633-8284 (reservation # 2454194)

WAL-MART <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMT)") else Response.Write("(NYSE: WMT)") end if %>
replay avail. until 1:00 PM EST
(800) 633-8284 (reservation # 2339970)

LIMITED INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LTD)") else Response.Write("(NYSE: LTD)") end if %>
(800) 805-3502

HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %>
(303) 446-5399 (reservation # 2348408) -- replay avail thru 2/25

GENZYME CORP-TISSUE REPAIR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GENZL)") else Response.Write("(Nasdaq: GENZL)") end if %>
(402) 220-6030 -- replay through 5PM on 2/25

MORROW SNOWBOARDS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MRRW)") else Response.Write("(Nasdaq: MRRW)") end if %>
(201) 628-6885 replay until 2/28

ELTEK LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELTKF)") else Response.Write("(Nasdaq: ELTKF)") end if %>
(913) 661-0487 code: 314285

SAFESKIN CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFSK)") else Response.Write("(Nasdaq: SFSK)") end if %>
(800) 642-1687 code # 262152

HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %>
(402) 220-3005 -- replay after 12:00 noon until 2/28

ORTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORTL)") else Response.Write("(Nasdaq: ORTL)") end if %>
(402) 220-5186 -- replay through 3/7

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO                 BORING PORTFOLIO
ATCT down $1/16 at $5 1/2      BGP down $1/8 at $42 3/8
AOL up $1 1/8 at $36 5/8       CSL unch. at $34 1/2
CHV up $1/2 at $66 3/4         CSCO down $2 3/8 at $56 5/8
COMS up $9/16 at $39 1/4       GNT up $1/2 at $38 1/8
GM up $3/8 at $59 3/8          ORCL down $3/16 at $40 1/8
IOM unch. at $16 1/4           OXHP down $1/4 at $56 7/8
KLAC down $5/8 at $44 3/8      PMSI up $1/4 at $11 5/8
LU up $1/8 at $59              SLR up $1 1/4 at $56 1/2
MMM up $1 1/8 at $87 5/8       TDW down $3/8 at $42 5/8
T down $3/8 at $40 3/4

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Randy Befumo (MF Templar), a Fool
Fool Plate Special

Dale Wettlaufer (MF Raleigh), another Fool
Ups & Downs

Brian Bauer (MF Hoops), and yet another Fool
Editing