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Non-Tech : CompUSA (CPU)

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To: Bill Wexler who wrote (795)	11/10/1998 4:17:00 PM
From: Bill Wexler	Read Replies (1) of 3187

I listened to the CC, and I was even more pleased. They were very happy with the Computer City absorption, noting that while Tandy was running them, they were losing enormous amounts of cash. Halpin noted that "the brakes have been put on" and the company is in the process of growing the businesses. ASPs seem to be stabilizing. There may be some slight downward trend in the next few months, but they didn't seem overly concerned. The technical support and training businesses are booming. Same store sales decreased as a result of weaker corporate sales. Halpin was cautious about next Q, stating that they may still be weak. But he added that, "I'm always conservative about this." So it all boils down to this: - Earnings came in higher than expected. - Gross sales were up. - Gross margins took a hit, as well as same store sales. - ASPs are stabilizing. - The Computer City acquisition went off a lot better than expected. - Management remains cautious about next Q. So the disaster that everyone was expecting, didn't happen - and it looks like we are coming off the cyclical bottom. I stand by my strong buy recommendation.

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