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Q2 For the most part, ad agency (and related) stocks handily outperformed the blue-chip end of the stock market (as measured by the Dow Jones) during the second quarter. First-quarter results were generally good, and investors seem to be anticipating additional bottom-line gains when the June reports come out. Of the stocks with prices above the cost of a paperback novel, the best performance came from WPP Group. Management there has been promising that the margins of the major operating units would move up toward the level of the principal competitors, and that's what's happening. A margin-improvement story appears to be fueling Y&R's stock, too. This equity is new to the group, which went public in mid-May. The collapse of many Asian economies has been more of an opportunity than a threat to these companies. Although none get more than 15 percent of their total revenue from Asia, they still see the region as an attractive area for long-term growth. Some are scouting for acquisitions, figuring prices will be lower and managements more tractable during the current "crisis." --Alan Gottesman (westendal pobox.com) is principal of West End Consulting.

THE GOTTESMAN FILE

A look at ad-stock performances in the second quarter

..........4/1/98.....6/30/98.....Change

.....Leap.....1.38.....2.75.....100.0%
.....WPP Group.....57.50.....67.25.....17.0%
.....Young & Rubicam*.....28.06.....32.00.....14.0%
.....TMP Worldwide.....30.88.....34.88.....13.0%
.....Cordiant.....10.88.....12.25.....12.6%
.....Omnicom.....44.63.....49.88.....11.8%
.....Think New Ideas.....23.67.....26.13.....10.4%
.....Grey.....370.00.....396.00.....7.0%
.....Saatchi & Saatchi.....14.13.....13.75.....-2.7%
.....CKS Group.....18.63.....18.00.....-3.4%
.....Snyder Comm......46.38.....44.00.....-5.1%
.....True North Comm......33.69.....29.25.....-13.2%
.....DJIA.....8,868.32.....8,952.02.....0.9%

Source: West End Research. *Y&R's quarter-opening quote is actually
the closing price as of 5/12/98, its first day of trading.