Ed, Maybe? Wireless cable may be a better business then we thought. I still think the vacuum to fill is high speed internet.
NW
Subj: New Kagan Research Study Shows Cable Giant...
Date: 98-03-17 05:27:08 EST
New Kagan Research Study Shows Cable Giant Tele-Communications Inc. and Mutual Fund Manager Franklin Resources Best-Performing Stocks in This Century's Biggest Bull Market
CARMEL, Calif.--(BUSINESS WIRE)--March 17, 1998--A new study of nearly 4,000 publicly traded companies shows the average stock rose 3,630% from its 26-year low through year-end 1997, led by cable operator Tele-Communications, Inc. (+557,808%) and mutual fund manager Franklin Resources (+556,300%).
The study, conducted by media investment research firm Paul Kagan Associates Inc., also breaks out 217 media companies with an average 4,327% gain and 24 cable TV companies with an average 9,250% advance.
PKA studied common stock of 3,958 companies in the Standard & Poor's Stock Guide, eliminating newer exotic issues, warrants, preferreds and counting only one class of a company's common stock. The study measured a company's lowest price from 1971-1995 vs. its closing quote on Dec. 31, 1997.
"The study is significant," said PKA chairman Paul Kagan, "because the crash of 1974 was followed by the most powerful bull market of this century. That opened up the opportunity for the greatest stock gains of all time.
"Our research shows that potential gains from market lows to highs, for many companies and over a long period of time, are far greater than imagined by those who trade short-term. Our findings are a reminder that stock splits give the illusion of a stock always remaining inexpensive when, in fact, it has actually soared."
The study's findings are conservative, because stock spin-offs were not counted in the tally. Even cable giant Tele-Communications (TCI) came in 8th in the rankings at +178,700%. But TCI's common stock price has been truncated over the years by the most active spin-off and dividend program in market history.
To make it more accurately comparable with other high-flying stocks like Franklin, Intel (+224,700%), Wal-Mart (+126,100%) and Berkshire Hathaway (+120,953%), PKA assumed TCI stockholders retained all shares spun off to them and reinvested all cash dividends paid. Spin-offs and cash dividends of other companies were not included in the study. Inclusion of cash dividends would have edged Franklin Resources ahead of TCI and, even without them, Franklin has taken the all-time lead from TCI in 1998 trading through March 13.
The TCI program of recapitalization, which began in 1979, consisted of six stock splits, six spin-offs, eight stock splits by spin-offs, one spin-off from a spin-off, one sale of a spin-off, two buybacks of spin-offs and six cash dividends.
An investor who would have held onto all shares issued and who re-invested all cash received in more TCI common stock would have enjoyed a rise in the underlying common from 75 cents per share to $4,184 at 12/31/97, unadjusted for all the splits and spins.
The architect of this historic financial engineering is John Malone,TCI's chairman/CEO, whose own wealth has accrued to an estimated $2 billion, while the total trading value of the TCI stock portfolio approaches $40 billion. Malone in January announced a plan to donate most of his fortune to improved education.
With the exception of Berkshire Hathaway, whose Warren Buffett has refused to join the stock-split parade, the split-adjusted cost of the best-performing stocks ranges from 1.5 cents to 6 cents per share. This low figure, arrayed against current stock prices ranging from $16-$120, results in huge rates of return for investors who were willing to wait out market crashes.
Berkshire Hathaway, meanwhile, rose from its all-time low of $38 per share to $46,000 at the end of 1997. It has since risen as high as $62,000 in March. Had BH split like the other top performers in the PKA study, its adjusted all-time low would be 1.5 cents and its current price $60.
Highlights of the PKA stock study have been published this week in the company's CABLE TV INVESTOR newsletter. A complete report with stocks sorted alphabetically and ranked by performance is in preparation. Note: Kagan-managed stock portfolios have held shares of TCI continuously since 1976 and Berkshire Hathaway since 1983.
Paul Kagan Associates, Inc. was founded in 1969 to provide investment and economic research for the entertainment, media and communications industries. Its statistical databases, newsletters, reference books, conferences, valuation, consulting and expert witness testimony are widely used by bankers, investment bankers, attorneys, consultants and leading executives of the cable TV, broadcasting, publishing, motion picture, video, sports, Internet and telecommunications industries.
For more information contact Tim Akin, Marketing Manager, at 408/624-1536, or email tim@kagan.com. Or visit the free Kagan news and data site on the World Wide Web via www.pkbaseline.com. -0- *T
10 BEST-PERFORMING STOCKS 1971-97
'71-'95 12/31/97
LOW(a) PRICE %CHANGE 1. Tele-Communications (Cable TV) $ 0.02 $ 27.94 +557,808%(b) 2. Franklin Resources (Mutual Funds) 0.02 86.94 +556,300 3. Computer Horizons (Data Processing) 0.02 45.50 +291,100 4. ADC Telecomm. (Tel. equip.) 0.02 41.75 +267,100 5. Keane Inc. (Comp. software) 0.02 40.63 +259,900 6. Intel Corp. (Semiconductors) 0.03 70.25 +224,700 7. Progressive Corp. (Auto insurance) 0.06 119.88 +191,700 8. Innovex (Disk drives) 0.02 22.94 +146,700 9. SCI Systems (Electronics) 0.03 43.56 +139,300 10.Countrywide Credit (Mortgage Loans) 0.03 42.88 +137,100
(a) Split-adjusted.
(b) TCI '97 price effectively $87/share pro forma all spinoffs and
re-investment of dividends.
Note: All prices rounded to nearest cent.
OTHER WELL-KNOWN TOP PERFORMERS
'71-'95 12/31/97
LOW(c) PRICE %CHANGE
14. Wal-Mart Stores (Retailing) $ 0.03 $ 39.44 +126,100 15. Berkshire Hathaway (Holding Co.) 38.00 46,000.00 +120,953
16. Circuit City (Retailing) 0.03 35.56 +113,700 23. Comcast (Cable TV) 0.03 31.56 +100,900 24. Hasbro (Toys) 0.03 31.50 +100,700 29. Chris Craft (TV Stations) 0.06 52.31 + 83,600 30. Limited, Inc. (Retailing) 0.03 25.50 + 81,500 32. Southwest Airlines (Transport) 0.03 24.63 + 78,700 34. Mirage Resorts (Hotels) 0.03 22.75 + 72,700 38. Tyson Foods (Poultry) 0.03 20.50 + 65,500
(c) Split-adjusted except for Berkshire Hathaway. *T -0- Note to Editors: (c) 1998 Paul Kagan Associates, Inc. Analysis of Standard & Poor's Data. All rights reserved.
--30--DL/sf* eh
CONTACT:
Paul Kagan Associates
Timothy Akin, 408/624-1536
tim@kagan.com |
