<THE FOOLISH FOUR>
by Robert Sheard
LEXINGTON, KY. (July 27, 1998) -- The last of our Foolish Four holdings for 1998 reported earnings today, as Union Carbide <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UK)") else Response.Write("(NYSE: UK)") end if %> reported a gain of 85 cents a share versus $1.28 per share last year. Analysts were looking for 84 cents a share.
Despite "beating the Street," the report wasn't very well received. The usual culprits conspired to hurt this quarter's results: falling prices, weakness in Asia, and the strong dollar. Even though low raw material costs helped a bit, they weren't enough to offset the Terrible Trio.
The reason the Street punished the stock today, however, is that the weakness in prices is likely to dampen results in the next couple of quarters as well, at least according to BT Alex Brown analyst Sergey Vasnetsov. In mid-afternoon trading, Union Carbide had given up 5%.
Overall, however, the Foolish Four stocks fared decently this earnings season. Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> blew the estimates away while the other three stocks were basically in line with analyst estimates.
On a little better note today, Credit Suisse First Boston added Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> to its focus list and rated the stock a "buy." Whether sustainable or not, big MO has been moving up a bit of late and is starting to threaten breakeven on the year.
With the current correction dropping the Dow and the Standard & Poor's 500 a few percentage points, Philip Morris' rise has helped close the gap between the Foolish Four and the indices. The first step is catching the Dow. The next step is putting a little distance between the Four and the Dow and going after the S&P 500.
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.]
07/27/98 Close
Stock Change Last -------------------- UK -2 48.88 IP + 7/16 43.94 MO + 3/4 42.31 EK - 3/4 84.00 |
Day Month Year
FOOL-4 -0.71% 4.35% 13.32%
DJIA +1.02% 0.85% 14.16%
S&P 500 +0.57% 1.18% 18.22%
NASDAQ +0.11% 2.03% 23.11%
Rec'd # Security In At Now Change
12/31/97 206 Eastman Ko 60.56 84.00 38.70%
12/31/97 291 Union Carb 42.94 48.88 13.83%
12/31/97 289 Int'l Pape 43.13 43.94 1.88%
12/31/97 276 Philip Mor 45.25 42.31 -6.49%
Rec'd # Security In At Value Change
12/31/97 206 Eastman Ko 12475.88 17304.00 $4828.13
12/31/97 291 Union Carb 12494.81 14222.63 $1727.81
12/31/97 289 Int'l Pape 12463.13 12697.94 $234.81
12/31/97 276 Philip Mor 12489.00 11678.25 -$810.75
CASH $754.73
TOTAL $56657.54
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