Orca -
Any relation to the SRO orca crew?
I agree entirely with your sentiment. In terms of fundamentals CPQ is not only the best positioned to command business in the future, but I would say the only major player who is well positioned. I have pointed out previously that CPQ acquired key technology in a number of areas which can not be replicated, patents going back 20 and 30 years which enable royalty-free development in core areas like clustering and networking, and a breadth of product line which will enable them to quickly move to high profit products when markets shift. Dell is a one-trick pony (but it's a great trick and a pretty strong pony). Dell will face severe challenges in the next few years to maintain their momentum since they are not making the infrastructure investment to move upstream. HP has a conflicted business model which has been reflected in their performance for the last year, they are playing defensively. IBM is scrambling to transition away from mainframe, AS400, and RS6000 business without letting anyone know, kind of like an elephant trying to tiptoe. Sun has to move from their SPARC base to a standard platform and somehow embrace NT without losing their position as the last bastion of 'real' Unix. Given those dynamics CPQ long is a no-brainer. The question is where the savvy investor would go for the next 3-6 months. CPQ certainly looks good at these prices and it would not take much to jack it back up to early January prices, but will that happen in 2Q, 3Q or 4Q? My guess would be 4Q based on how long it takes the street to figure out what is really happening, the time for the DEC acquisition to translate to $ on the CPQ bottom line, and the traditional CPQ business cycle. |
