I'm new to this thread. Trying the 30 day deal. But I've been watching what has been said here for a long time, since about post 7000. I think this recent downturn in the stock is just a normal cyclical event in the electronics industry. The first quarter is always slow and about the first half of the second. This quarter was just amplified by the Asian woes. True Compaq missed the numbers and overbuilt, but they're a smart company and will handle the situation. Compaq has also been misquoted about the first quarter earnings. Many people are saying a "break even" quarter, in my understanding that means no profit, no loss. What Compaq has said was they will have a 'FLAT' quarter, a profit in line with 1st quarter 1997. Which was a $387 million profit. Still not bad. Compaq is also looking ahead to the third and fourth quarters, when the back to school and holiday sales really heat up. They surely must have their new product lines ready to hit the production floor. They will not be left out of these hot sales opportunities because of their current inventory woes.
In my opinion, when the quiet period is over with the Digital deal, Compaq will be able to open up to the press and to shareholders and assure them of what their plans are. This should all come to a head around late May or the first of June, when new products start to hit the shelves, and sales start stepping up. IMO you should see Compaq share price back to mid-30's by the time second quarter results are posted in July. That will be because Compaq is able to begin talking more open, and will have their inventory problem behind them and assure that they are track again.
I own many shares of CPQ, and believe in their future. I do get a sick feeling when I see a $10/share loss, but I know that will turn around. It always has with this company. Looking for $250/share in 5 years. Go long on CPQ. |
