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Politics : Ask Michael Burke
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To: Joseph G. who wrote (653)8/22/1996 8:35:00 PM
From: Knighty Tin   of 132070
 
Joe, It is definitely not just spreading the risk. CPQ is actually my top put candidate and the other two, Gate and Dell, are the risk spreaders. First, growth in Europe and the US will be muted this year. The big growth will be in Asia where they do not have brain dead dumping rules. The Japanese cos. will eat Compaq's lunch over there. There is no question that the Japanese have cheaper mfg. than a firm like CPQ. CPQ has already had three really lousy quarters in a row even without the new competition. Sales growth was 14 percent last quarter. The last time CPQ had sales growth of less than 25 percent was in 1992. Lousy sales growth combined with price cuts whacking margins combined with an all-time high on the stock spell disaster in my book. This is definitely a contrary opinion, but I like Compaq's chances of crashing and burning. Look at the recent price cuts on portables and the China price cuts. Life is getting tough for Pfeiff the knife. MB
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