Elwood, Michael, MeDroogies, and others;
Dell's current trailing p/e is about 44.60 while cpq's is 32.3. Furthermore, Q4 for cpq will substitute higher eps for lower eps to a greater extent than dell, thereby bringing down the cpq p/e even further relative to Dell's p/e. In other words the spread between cpq's and dell's forward p/e will be even larger. Unfortunately, there is a disconnect between cpq whose growth rate is accelerating while dell's growth rate is contracting. The market, for reasons which are unclear to me, fails to recognize the difference between the two in terms of forward earnings growth rates! Will this situation ever be corrected I wonder?
As for tomorrow, I have a feeling that cpq will not take it on the chin as much as dell for the very reasons I cite above. Nonetheless, it will be punished for dell's problems. Michael, when will the market recognize once and for all that cpq is quite a different company from dell? |
