El; Thanks I am posting his comments below:
Yahoo Zoo
by: sikorskys76 103146 of 103147
Dan Niles, the most influential tech sector analyst, has blasted INTEL, DELL, and IBM recently -- prior to the company's warnings.
Because of his tendency to be a Cassandra analyst, looking for problems at companies, versus a Polyanna analyst who analyizes companies through rose-tinted glasses, I would have expected him to blast Compaq ahead of their earnings.
However, he has been inclined to reserve his comments.
This is due to the fact that the sweep of Compaq's prior TOP management has left the Wall Street analyst community with no corporate insiders who they can attempt to massage inside information from.
The new management team at Compaq has been excruciatingly scrupulous in keeping an arm's length distance from the Wall Street community.
This can be attributed to the fact that they wish to walk-the-walk before they can talk-the-talk.
Having seen the share price trading at 52 week lows, new management clearly understands that credibility comes from substance not the appearance of substance.
Look to Tuesday's earnings release to deliver on their committment to return Compaq to profitability.
Although the lack of analyst guidance and news vacum has punished the stock, I would expect that this is a bear-trap as Compaq continues to grow market share and retain supremacy as the #1 PC maker and provider of services.
Cost cutting is the key to the "turnaround" at Compaq.
Apple Computers TWO years ago saw both its market share declining along with their profits. They addressed both issues and the stock has rebounded strongly.
Compaq's problems are not nearly as troublesome as Apple's was, making the stock price appear to reflect a gloomier scenario for the company's fundamentals than what the economic realities dictate.
Look for a trade above 20 prior to the earnings on Tuesday, with a 10-15% gap HIGHER to the 22-24 level on favorable earnings results.
Should Compaq give a "all-clears" signal to analysts in forward guidance -- another 10-20% gain can be expected ON TOP of the 22-24 level. (or 26)
All in all, with IBM on Friday morning expected to rebound 5-7% from its lows, Compaq by comparison could trade on Friday up to 20 per share -- setting up for a move to 26 within ONE WEEK (predicated on positive earnings and analyst upgrades on the back of them) |
