Compaq Message Board - Msg: 1725042

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Technology Stocks : Compaq

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To: Thomas Dremel who wrote (3875)	7/8/1997 10:54:00 PM
From: Harry Landsiedel	of 97611

Re: CPQ owner earings. My 97 owner earnings is $5.82 per share vs. $6.25 EPS estimated. In 98 I'm projecting $7.25 EPS and $7.11 owner earnings. I usually follow Value Line for depreciation and cap spending numbers but for some reason they are way off on cap spending for CPQ. For EPS numbers I follow 1st Call or Value Line. Owner earnings vs EPS is more important for capital intensive businesses like Intel's than for CPQ. How the Tandem purchase will affect this calculation I don't know yet. (What little I've seen of Tandem's #'s, I'm not impressed.) I saw a 6% ROI, which is much too low. I don't mess with companies unless they have a 20% ROI or better. I agree with you that it is tougher and tougher to find companies with a PE below their growth rate. We'll see where CPQ fits after Thursday. As a long term investor, the SSG is very helpful, but the way CPQ has moved since April, one wonders what the future returns will be. But I'm not complaining. Good investing. HL

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