<THE FOOLISH FOUR>
by Robert Sheard
LEXINGTON, KY. (July 15, 1998) -- It's not too often that three of the Foolish Four stocks will be down for the day and the portfolio will still have a nice overall gain, but when the one winner leaps forward more than 10%, it packs a big punch. That's just what happened today after Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> posted a knockout earnings number for the second quarter.
Kodak has been mired in efforts to restructure and cut costs, and the second quarter results showed that the film giant is much farther along than anyone anticipated. With Wall Street expecting earnings per share of $1.13, compared to last year's $1.11, Kodak recorded an impressive $1.38 a share (diluted).
Company officers aren't patting themselves on the back yet, but the analyst community is excited that the earnings slide appears to be ending for Kodak. Most of the analysts raised their outlook for Kodak. Two such examples are Prudential's Alex Henderson raising the stock to a "buy" and Morgan Stanley's Rebecca Runkle raising her rating to "outperform."
There's no way to say whether Kodak will go into the Dow Dogs Hall of Fleas as a classic victory, but it's looking that way today. Out of favor for months and months while it restructures, the stock was cheap for the patient Dow investor. Now that a turnaround seems to be working, the stock will regain some favor with the rest of the investment community and the Dow Approach investor makes a sweet profit.
It still doesn't completely make up for Philip Morris' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> woes this year, but it's a nice step in that direction, and the year still has five and a half months left. Who knows? Would that all such Dogs cleaned up this nicely.
Current Dow Order | 1998 Dow Returns
[Robert Sheard is the author of the The Unemotional Investor (Simon & Schuster, 1998) available now at Amazon.com and your local bookseller.]
07/14/98 Close
Stock Change Last -------------------- UK -1 52.19 IP - 3/8 42.94 MO - 11/16 39.25 EK +8 3/4 82.50 |
Day Month Year
FOOL-4 +2.21% 3.47% 12.36%
DJIA -0.12% 3.16% 16.77%
S&P 500 -0.24% 3.61% 21.06%
NASDAQ +1.33% 5.27% 27.01%
Rec'd # Security In At Now Change
12/31/97 206 Eastman Ko 60.56 82.50 36.22%
12/31/97 291 Union Carb 42.94 52.19 21.54%
12/31/97 289 Int'l Pape 43.13 42.94 -0.43%
12/31/97 276 Philip Mor 45.25 39.25 -13.26%
Rec'd # Security In At Value Change
12/31/97 206 Eastman Ko 12475.88 16995.00 $4519.13
12/31/97 291 Union Carb 12494.81 15186.56 $2691.75
12/31/97 289 Int'l Pape 12463.13 12408.94 -$54.19
12/31/97 276 Philip Mor 12489.00 10833.00 -$1656.00
CASH $754.73
TOTAL $56178.23
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