Compaq Message Board - Msg: 10175554

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Technology Stocks : Compaq

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To: isdsms who wrote (63566)	6/18/1999 11:26:00 AM
From: jim kelley	Read Replies (1) of 97611

No doubt CPQ has negatively affected the entire sector sometimes intentionally. But HWP, IBM, Packard Bell, etc. also have their own problems. In an all out price war, every company would suffer. DELL the company has been least affected within the sector because it is the low cost producer (OPEX+ COGS). DELL can do well while the other companies are losing money on each machine they ship. DELL has many other advantages over the other companies including GTW. DELL will do fine this year but its main price appreciation will occur in the second half when business is strongest. Just do not expect 100% appreciation per year. 40% appreciation is a very healthy rate of return. CPQ's future is cloudy and it may end up being a much smaller company than it is today. Profitability is now many quarters away. This restructuring will ramble on for more than another year. They swallowed an unhealthy company (DEC) and now they have caught the disease.

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