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Technology Stocks : Compaq

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To: rudedog who wrote (70669)10/31/1999 8:39:00 PM
From: jim kelley  Read Replies (2) of 97611
 
Dog,

Assuming that CPQ grows revenues by 12-15% per year
and earns $2 for Y2000, I calculate a stock price of
$24 to $30 dollars per share. No premium should be
placed on growth below the market norms IMO.

But this is hardly the double whereof you speak.
That would require a stock price of 36-38 per share.

It is also possible for CPQ to incur further losses in its effort to reduce OPEX. They have to pay for the layoffs.
In Europe, I think they have to pay a year salary per laid off employee. Including those restructuring charges I doubt
if CPQ will make a profit in Y2000.
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