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Technology Stocks : Compaq

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To: James R Mohr who wrote (15572)1/29/1998 9:17:00 AM
From: Johnnie W.  Read Replies (3) of 97611
 
An analysis showing why CPQ/DEC is a great buy!

CPQ has around 160 million shares outstanding that earn $1.19/share. It will issue 150 million more shares to acquire DEC and each DEC share now makes $2.10 per share. This averages $1.19 + $2.10/2 = 1.645 per share. Although there will be some initial merger charges these may be immediately offset by accretion and corporate growth (i.e., just look at the Tandy deal, etc.) So given a growth rate of 30 % the stock is worth 30 x $1.65 = $49.50. END OF STORY! ANY COMMENTS!
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