I don't want to be unduly rude - but this one is for the bottom sniffers!
___________________________
nice article from the zoo: brian_cranston
May 14 1999
3:09PM EDT
Money Magazine
Sock Focus
June 1999
By Peter Keating
Can Compaq Come Back ?
.............Clearly, Compaq is in crisis. But has it gone irretrievably astray ? Or have impatient investors turned Compaq into the most endangered species - a top tech stock selling at a bargain price ?
Compaq doesn't make itself easy for shareholders to embrace. It took investors over
a cliff in the first quarter of last year too, cutting its earnings targets..........
Several fund managers and analysts, however, are making the case that a $35 billion company attempting a complicated restructuring is entitled to more than a couple of quarters to turn itself around. "The changes Compaq is trying to make are sticky, and
they are always harder and always take more time than investors expect," says Howard Kornblue a co-manager of the $ 500 million (assets) Pilgrim MagnaCap Fund. After the earnings stumble, Kornblue moved to increase the fund's 150,000-share stake in Compaq by one-third.
........"It's possible to succeed with a hybrid strategy," says Wendy Abramowitz of Argus Research. "Look at IBM, which has had a nice rebound in PC sales."
........In short, if you're looking for reliable earnings, you'll have to put your money elsewhere. But if you're the kind of investor who's willing to bet on turnaround plays-with all the volatility and rocky quarters that accompany them-Compaq has the making of a long-term winner. Sure, it faces daunting challenges. It's trading for 1.1
times sales Vs. 2.3 for IBM and 5.7 for DELL. "At this juncture, all the negatives are priced into the stock," says Kronblue. "We believe the bottom is here."
|
