The Courier-Journal from Louisville, Kentucky • Page 36

ersonal Finance D2 THE COURIER-JOURNAL WEDNESDAY, NOVEMBER 8, 2000 ID THE MONEY LINE CURRENT SAVINGS YIELDS Mutual funds emphasizing value may be poised for a comeback Money market Six One Two Four deposit Minimum month Minimum year Minimum veer Minimum year Minimum account deposit CO deposit CO deposit CD deposit CD deposit BANKS In recent years, "value" investors have been beaten into the ground. The kids laughed at them on the playground. "Growth" investors ki sand in their eyes. Now, those tat-. tered egos are starting to revive.

So far this year, the value half of Standard Poor's 500-stock index has gained 5.7 percent, according to Morningstar, while the growth half declined 9.4 percent. A value investor bets on stocks JANE BRYANT QUINN Area Bank 3.75 $2,500 6.50 $2,500 6.75 $1,000 6.75 $1,000 6.75 $1,000 Auburn Banking Co. 3.30 2,500 4.58 2,500 5.35 500 5.51 500 5.88 500 Bank of Louisville 3.05 10,000 5.25 2.000 6.00 500 6.00 500 6.25 500 Bullitt County Bank 2.78' 2,500 5.61 1,000 6.65 1,000 7.19 1,000 7.19 1,000 Central Bank, Lex. 6.18 10,000 4.50 1,000 5.00 500 5,25 500 5.75 500 Citizen Union, Shelbyvllle 4.59 25,000 5.32 500 6.35 500 6.86 500 6.00 500 Commonwealth Bank 4.00 1,000 7.25 1,000 7.00 1,000 6.75 1,000 6.00 1,000 Community Bank 4.70' 5.40 500 6.82 500 6.85 500 6.20 500 Farmers Bank, Frankfort 2.43 2,500 4.36 500 4.45 500 4.91 500 6.85 500 Farmers State Bank 3.04' 2,500 5.09 500 5.63 500 5.68 500 6.14 500 Fifth Third Bank, Lou. 6.25 10,000 6.15 500 6.75 500 6.00 500 6.25 500 Firstar, Lou.

6.00 25.000 3.85 500 4.30 500 6.75 500 4.40 500 Firstar, Paducah 1.161 100 3.25 500 3.50 500 3.80 500 4.10 500 First Bank 6.64 10,000 6.50 500 7.00 500 7.00 600 6.95 500 First Capital Bank 5.54 10,000 6.40 500 6.75 500 6.75 500 6.75 500 First Citizens Bank 2.75 100 6.50 500 5.25 500 6.25 500 6.25 500 Heritage Bank 4.70' 5.40 500 6.35 500 6.60 500 7.04 500 Hometown National Bank 3.50' 1,000 6.00 500 6.25 500 6.50 500 6.00 500 Lou. Comm. Development Bank 5.10 200 5.65 200 5.95 200 5.80 200 New Washington State 3.04 1,000 5.75 1,000 6.50 1,000 7.00 1,000 6.50 1,000 Peoples, Bullitt Co. 3.30 1,000 6.09 1,000 6.24 1,000 6.40 1,000 6.61 1,000 Peoples, Mt Washington 2.53' 2,500 6.71 1,000 6.86 1,000 6.50 1,000 6.45 1,000 Peoples B'ank of Tayforsvllle 2.94 2,500 5.10 500 6.40 500 7.19 500 7.19 500 Peoples State Bank, Hodgenvllle 3.56 2,500 5.75 2,500 6.25 2,500 6.50 2,500 7.00 2,500 PRP National Bank 6.17 500 5.32 500 6.04 500 6.61 500 6.61 500 Republic Bank, Lou. 4.75 25,000 3.85 1,000 6.15 1,000 6.80 1,000 6.50 1,000 River City 6.04 50,001 5.10 1,000 5.25 100 6.26 100 6.50 100 Shelby County Trust 3.10 2,500 4.32 500 7.19 500 7.19 500 4.84 500 Stock Yards Bank 2.75 1,000 5.00 500 6.50 500 6.75 500 6.75 500 INTERNET BANKS USAccess (wmv.usaccessrjank.com) 5.90 $7,500 7.11 $500 7.26 $500 7.25 $500 7.00 500 SAVINGS BANKS and THRIFTS Bank of Louisville, FSB 3.05 $10,000 5.25 $2,000 6.00 $500 6.00 $500 6.25 $500 First Savings Bank 4.25 10,000 5.00 1,000 7.00 500 6.95 500 7.25 500 Regional Bank, FSB 5.66 25,000 5.25 1,000 6.00 1,000 6.10 1,000 6.25 1,000 BROKERAGE HOUSES Advestlnc.

6.45 $1,000 6.55 $1,000 6.60 $1,000 6.70 $1,000 American Express Financial 6.65 1,000 6.70 1,000 6.65 1,000 Edward Jones 6.40 5,000 6.55 5,000 6.65 5,000 6.75 5,000 A. G. Edwards 6.55 1,000 6.55 1,000 6.60 1,000 6.75 1,000 Hllllard-Lyons 6.45 5,000 6.60 5,000 6.60 5,000 6.75 5,000 Merrill Lynch 6.35 1,000 6.40 1,000 6.50 1,000 6.65 1,000 Morgan Stanley Dean WHter 6.60 1,000 6.70 1,000 6.85 1,000 6.70 1,000 Prudential Securities 6.45 1,000 6.50 1,000 6.65 1,000 6.75 1,000 Salomon Smith Barney 6.45 1,000 6.55 1,000 6.60 1,000 6.75 1,000 Sttfel Nlcolaus 6.45 5,000 6.60 5,000 6.60 5,000 6.75 5,000 rowth stocks left value stocks in the ust. Might the climate change? "The first sign that a particular investment style might be coming into vogue is that its techniques stop killing those who practice it," said analyst James Bianco, writing for The Leuthold Group in Minneapolis. When the economy moderates (or is perceived to be moderating), value does better than growth, Bianco said.

Still, stock prices remain relatively high, So far, Bianco sees only three groups with excellent values today: aerospacedefense, managed health care and health-care facilities. If we indeed undergo a shift to value stocks, many investors will have to rethink the way they choose their mutual funds. Often, you go by the stars awarded by Morningstar, which tracks and analyzes mutual-fund performance. Morningstar rates funds according to past performance and level of risk. The top performers get five stars; the lowest performers, one star.

Every rated fund has been in business for three years or more. Stars are widely used as a sales tool. Five-star funds tout their status in ads, and investors pile in. The five-star U.S. equity funds today are overwhelmingly growth funds.

If you spread your money over three or four of the best, you have not diversified. They're all buying the same kinds of stocks. Mark Warshawsky, director of research at the TIAA-CREF Institute (that's the giant teachers' pension fund), has just published an analysis of recent Morningstar ratings. He found that in 1998 and 1999 only about one-third of the five-star or four-star mutual funds stayed in those upper ranks. At some point, the rest fell to three-star level or The drop could reflect recent un-derperformance.

Maybe the fund's stocks are falling out of favor. Alternatively, the fund might have had a great year in 1997, but that year just dropped out of Morning-star's three-year performance measure. In this case, maybe its stocks weren't as strong as you thought when you bought in 1998. The longer a fund has had a high rating, the less likely it is to drop down, Warshawsky said. Funds have a slightly better chance of remaining in the top ranks if they've been there for at least 10 years.

There's more slippage among the younger funds and those funds, in particular, are more apt to emphasize growth today. John Rekenthaler, Morningstar's research director, said there's actually not much difference between mid-ranked funds and top-rated ones. Three-star, four-star and five-star funds have been found to perform pretty much alike, he said. Still, those funds do better, on average, than two-star or one-star funds. If that's the case, you shouldn't worry if your fund moves from level to level, as long as it rates three stars and up.

Even if growth funds weaken, they'll keep their high Morningstar ratings for a while, thanks to their fine records in the past. Performance ratings always look backward. Rekenthaler guesses that value funds might need three years of outperforming growth funds before they would dominate the star ratings again. That's something for stargaz-ers to think about. Jane Bryant Quinn's column appears Sundays and Wednesdays.

Write her at the Washington Post Writers Group, 1150 15th St. N.W., Washington, D.C. 20071. "The Washington Post whose prices are depressed. Maybe the industry has problems.

Maybe the company made some mistakes. Either way, value stocks are low-priced, compared with various measures of what the company might be worth. Investors expect the company to turn around. If it does, the stock should soar. How cheap the stock price really is depends on now you measure value.

For example, take the priceearnings ratio, wnich compares the stock price with current or predicted earnings per share. The average stock is selling for 25 times predicted earnings today. value investors prowl for promising stocks whose priceearnings ratios fall well below that average. By contrast, growth investors look for companies whose earnings and stock price are growing fast. Their priceearnings ratios are typically well above average.

As long as profit growth looks strong, these stocks should rise even more. During the 70s and '80s, value stocks generally captured the performance derby. But starting in the early '90s, Current rates, obtained yesterday, are expressed as annual percentage yields and are shown for some of the most common consumer savings Instruments, They do not cover all the options available, and they are subject to change. Southern Indiana institutions. Compiled by Sarah Shipley Rate with minimum deposit; rate Increases with larger Investment.

Source: Financial Institutions EARNINGS REPORTS Breakfast menu boosts Louisville Daiiy Queens chicken, a salad bar. All we did was add some new customers that liked ice cream." It also gave managers such as Madison a chance to become corporate partners, owner-operators who buy into their stores with sweat equity. "Nobody runs a business like they But they are veterans as well, own it like somebody who owns it, "There's a lot of closeness," he Bond said. said. Many of the former Burger Queen "When we get together it's like and Druther's operators began in having a family reunion, a lot of peo- their early 20s, said Bond, 47, so pie who greatly care about one an- they've still got quite a few years left, other." the breakfast market, its Louisville stores were ahead of the curve.

Breakfast accounts for about 25 percent of their business. In 1981 Burger Queen executives Bob Gatewood and Tom Hensley bought the company and converted it to the Druther's concept. "We were struggling as Burger Queen, and we were struggling as Druther's," said Bond, who was a 10-year veteran of the McDonald's chain when he became a Burger Queen manager in 1979. "It seemed we would get to the edge of financial disaster, then there would be a reprieve Continued from Page Dl Ed Watson, chief operating officer of International Dairy Queen Inc. of Minneapolis.

"These were professional restaurateurs. They haa track records." The first Burger Queen store in the Louisville area opened in Middletown in 1963. It was a Florida concept that Louisville partners James Gannon and George and John Clark built up and eventually bought. "People talk about limited menus it was ready limited in those days," Kull said. "The menu was a hamburger or 2 TtfXffft Almost Family Inc.

Almost Family of Louisville provides adult day health-care services in several states, including Kentucky and Indiana. Quarter ended Sept. 30 MM 1999 Ch9. Revenue 2, 545, 155 $11,105,137 13 Net Income 54,072 199,384 153 Per shore .15 150 Kentucky Electric Steel Inc. Kentucky Electric Steel is based in Ashland, Ky.

Quarter ended Sept. 30 2000 1999 Chg. Revenue 124,499,000 $26,392,000 -7 Net income 124,000 Per share .03 Year ended Sept. 30 2000 1999 Chg. Revenue til 1605,000 $105,389,000 8 Net income 317,000 978,000 -68 Per share .08 .34 -07 Whose MBA Programs Earned the "Innovation in Education Award'? American Assembly of Collegiate Schools of Business 1 null imiEiiE III 1 (fill Umvsnriw Loyola" Mnrthmctfm "We were struggling as Burger Queen, and we were struggling as Druther's." cheeseburger, a fish sandwich, one size of french fries, two sizes of soft drinks and one size milk shake." The drive-through window was still years away.

Burger Queen broke new ground among Louisville fast-food restaurants with its tor some reason. But it was real tough for us to be a small, regional player. Our annual sales for our entire group never even approached McDonald's or Burger King's advertising budget." Hensley and Gatewood converted the brand to Dairy Queen, first bELIARMINE Tumbleweed Inc. Tumbleweed, which is based in Louisville, operates restaurants in seven states and at eight international locations. Quarter ended Sept.

DQ operator Bill Bond 2000 1999 Cha. $14,442,000 $13,526,000 7 661,000 Revenue Net income Per share .11 seating for 28. "Everybody was just in- venting as they went, Kull said. McDonald's and Burger King were in town. So were now-defunct brands Burger Chef, Red Barn and Jiffy Burger.

McDonald's may have started the fast-food breakfast with the Egg McMuffin, but Hardee's made it an official part of the menu in the late 1970s with its made-from-scratch biscuits. Burger Queen followed suit about that time. Twenty years later, when Dairy Queen began a push for a share of as franchisees. Later they sold their interest to Dairy Queen. "Druther's had good units, fairly good volumes, but they'd gone through a leveraged buyout and the parent organization was financially strapped, Watson said.

"We were fortunate. That area of the country, we didn't have a great presence and a lot of conflicts" with existing Dairy Queen franchises. It was a good marriage, Madison said. "As Druther's we had a fair share of food business fish, fried Pomeroy Computer Resources Inc. Pomeroy of Hebron, sells and leases computer equipment.

Quarter ended Oct. 5 2000 1999 Cha. Revenue $246,911,000 $197,090,000 25 Net income 8,187,000 4,532,000 25 Pershore Si 18 UNIVERSITY Problem: fluto parts company tost track of 5,000 major orders. In September, an auto parts company lost track of a week's worth of orders, and key personnel quit. 475 clients have sent threatening correspondence for unfulfilled orders.

The company is trying to keep it quiet. Solution: The Vobix Platform, a hosted solution for opportunity tracking, financial integration with eeommerce, and collaboration tools operating in the Microsoft 2000 environment. Results: Moved inventory more efficiently Avoided hiring additional IT staff Tracked and logged all purchasing Standardized office communications Contact: Michael Paynter at 502-426-4007 ext. 148 or michaelpvobix.com. -jSt mm Microsoft I IT GREAT PLAINS.