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Technology Stocks : Compaq
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To: Windseye who wrote (20858)3/9/1998 12:03:00 AM
From: Craig Schilling  Read Replies (2) of 97611
 
Windseye,

I've been a lurker on this thread for a while and participated on the Dell thread. The comments on this thread remind me of all the other threads that saw a sector run up and then run down as rotation from the sector changed. We saw the same thing with the semi and networking industries in 95,96 and in DD in 97. People fall in love with these companies and think the stock price will continue to go up forever. The sector had a great run and now it's time to move on.

The fact is that the computer manufacturing sector has seen it's run up and now the sector is going through distribution as earnings acceleration has begun to decrease along with margins. MUEI,HWP,GTW, IBM, CPQ and DELL are all going through the same process and you will see PE's begin to fall in all the companies all be it not at the same time, as trading is different on the different exchanges. Hedge funds have been shorting these stocks over the last month and will continue to do so until the PE's get back to there historical levels. The bottom line is that your going to see big swings on the stock price as people begin to realize or not realize what's going on. If you have to be in the sector then protect yourself by staying in low PE stocks. But remember PE's are only the past because we don't know the future earnings until the company brings them home. (DD sector was a classic in PE miscalculation)

Craig
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