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Technology Stocks : Compaq

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To: Robert Sherman who wrote (21930)3/19/1998 12:30:00 AM
From: Andreas   of 97611
 
One slight problem. How the heck is cpq supposed to earn $1.80/shr. this year? We already have one annual forecast at about $.38. That's right - 38 pennies per share. Let's assume they're way off base and cpq in fact earns twice that. Then at 22 times earnings the stock is worth about $16.72. Of course that begs the question - why should cpq be entitled to a pe of 22 with stunted growth? After all cpq is not the high quality, high growth, high profitability company like - Yahoo or Excite or AOL (tongue in cheek).

In reality it is quite pointless to try and guess right now what they will earn in 1998. There isn't a single forecast out there (Zacks or First Call or whoever) that is credible right now. No one knows and no-one can know. Call up your broker if you have one and ask him/her what your brokerage has as earnings forecast for cpq for 1998. He's likely to tell you that the only number they have is 30 days old, is therefore obsolete and therefore it's anybody's guess.
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