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Technology Stocks : Compaq
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To: Spots who wrote (15874)2/1/1998 3:58:00 PM
From: hpeace  Read Replies (2) of 97611
 
cpq's gross margins are planned to increase drastically with the
enterrise biz moving to 50%+ and with the service and support biz already a 50% Gross margin biz.
do it again and increase the margins.

you keep using the term pc..cpq isn't a pc compnay....
they are a entrprise computing company that will even expand to home appliance and toys...
although i don't see the pc-tv entertainment center working til we have hd-tv.
plus you left out that when the dec deal is chopped up that cpq might have 8 billion in cash instead of the 6.8 billion in cash.
count on margins going up and up and up...
they have increased almost 25% in two yrs... and we may get that increase in 3 yrs now....that's 34% margin in 3 yrs
that cash can buy buy higher margin prodcuts.
go back and calculate how much of an investment turned into a million.
start with 1984 low.
why would you assume the margins of 27.6..when cpq has gone from 22 to 27.6 in 2 yrs.
and the dec and tandem purchase will take margins even higher.
dec's margins were 34% and they were rising of late.
dec makes 50% on their S&S biz. cpq will sell off the dec pc biz that was dragging down the margins to 34%.

also, where do you get 43...
I get that 25k on margin buys 50k of stk.

1 million dollars is 20 times that 50k...
so where is the 43 from.
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