Investing For Growth
Investing For Growth
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by Robert Sheard (MF DowMan) LEXINGTON, Ky. (Mar. 22): It seems like feast or famine for news stories on the IFG stocks. Yesterday, nothing interesting to report for the ten in the current model portfolio; today, stories are flying across the wires left and right.
The obvious key story for the IFG portfolio today is Adobe Systems' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ADBE)") else Response.Write("(NASDAQ:ADBE)") end if %> earnings report after the bell yesterday. Adobe managed to beat Street estimates, posting $0.44 per share versus estimates of $0.41, but the announcement that killed the stock today was that Hewlett-Packard <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:HWP)") else Response.Write("(NYSE:HWP)") end if %> will not be using Adobe's PostScript software in some HP LaserJet printers starting in the second half of 1997. Did the Street over-react? After all, the sum of all LaserJet products accounts for only five percent of Adobe's 1995 revenues. Nevertheless, several analysts downgraded the stock. For more details, see MF Templar's Special Section on Adobe today.
According to the Israeli Treasury, Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:INTC)") else Response.Write("(NASDAQ:INTC)") end if %> has agreed to "sweeten" its deal with the government in order to build a $1.6 billion chip manufacturing plant in Kiryat Gat. The government's concern stemmed from a fear that because it was investing $600 million (roughly 38% of the cost), it stood to lose more than it would gain from the plant being built there. Intel has agreed to buy more goods and services from Israeli industry to ease the government's fears.
Although not currently in the model portfolio, one of the current top ten IFG stocks got hammered today after announcing earnings. Biomet <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:BMET)") else Response.Write("(NASDAQ:BMET)") end if %> recorded a third-quarter profit of $0.20 per share versus $0.18 in the year-ago period. The Street was looking for $0.21. Biomet also announced that it received a net payment of roughly $2.9 million from U.S. Surgical <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:USS)") else Response.Write("(NYSE:USS)") end if %> upon the termination of their joint effort to develop resorbable synthetic bone and hard tissue substitute products. Biomet will record the gain in the fourth quarter. In other Biomet news, the company is still waiting for the court's judgment on a recent jury verdict against it. Biomet lost a patent infringement case brought by Raymond Tronzo, who was awarded $55 million in damages by the jury. The stock plunged more than 13% today.
Although Biomet is among the top ten for the traditional IFG approach, this is one my Relative Strength variation says to avoid. Of the 22 IFG stocks as of last Friday, Biomet had the worst Relative Strength ranking, a paltry 54. Maybe there's something to this approach?
For those of you wondering what happened to Pacifica Health <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:PHSYA)") else Response.Write("(NASDAQ:PHSYA)") end if %> this week (another stock on the current IFG list but not in the current model portfolio), on Wednesday the company warned that its second-quarter earnings would fall about 7% or 8% shy of analyst expectations. . . ouch!
Have a great weekend and look for the updated list of IFG stocks late Saturday or early Sunday (assuming my Value Line arrives tomorrow.) |
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INVESTING FOR GROWTH (3/22/96)
Day Week Month Year History
IFG -0.74% -0.88% -1.56% 0.38% 3983.91%
DJIA 0.17% 0.93% 2.75% 10.15% 580.06%
S&P 500 0.22% 1.43% 1.59% 5.63% 510.80%
NASDAQ 0.22% 0.24% 0.20% 4.76% 644.66%
Rec'd # Security In At Now Change
10/10/94 9586 Micron Tech 16.63 31.75 90.98%
1/5/96 3387 Sterling Soft 52.75 69.50 31.75%
4/8/95 5828 ADC Telecom 28.38 37.00 30.40%
4/8/95 3794 Intel 43.56 56.13 28.84%
1/5/96 3183 Comp Assoc 56.13 69.75 24.28%
1/5/96 4168 Oracle 42.88 48.88 13.99%
1/5/96 2627 Comp Sci 68.00 71.38 4.96%
7/8/95 3866 Tellabs 48.00 49.00 2.08%
7/8/95 3776 Applied Mat 49.13 36.50 -25.70%
1/5/96 4229 Adobe Sys 42.25 31.38 -25.74%
Rec'd # Security Cost Value Change
10/10/94 9586 Micron Tech $159,367.25 $304,355.50 $144,988.25
1/5/96 3387 Sterling Soft $178,664.25 $235,396.50 $56,732.25
4/8/95 5828 ADC Telecom $165,369.50 $215,636.00 $50,266.50
4/8/95 3794 Intel $165,276.13 $212,938.25 $47,662.13
1/5/96 3183 Comp Assoc $178,645.88 $222,014.25 $43,368.38
1/5/96 4168 Oracle $178,703.00 $203,711.00 $25,008.00
1/5/96 2627 Comp Sci $178,636.00 $187,502.13 $8,866.13
7/8/95 3866 Tellabs $185,568.00 $189,434.00 $3,866.00
7/8/95 3776 Applied Mat $185,496.00 $137,824.00 $(47,672.00)
1/5/96 4229 Adobe Sys $178,675.25 $132,684.88 $(45,990.38)
CASH $458.86
TOTAL $2,041,955.36
Transmitted: 3/22/96
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