Compaq Message Board - Msg: 8056546

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Technology Stocks : Compaq

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To: robbie who wrote (50018)	2/26/1999 3:03:00 PM
From: Chuzzlewit	Read Replies (2) of 97611

No Robbie, I'm not here to gloat. I think my point is that in careful study of the sales trends of CPQ, DELL and GTW it is clear to me that Compaq routinely stuffs its channels in the fourth quarter. That means that if you invest in CPQ (I do not) you need to have a crash helmet on when the analysts annually "discover" Q4 channel stuffing. I am not being critical of Compaq stuffing its channels during Q4. It must do so in anticipation of Christmas sales. But there is a clear implication that the excess inventory sitting in the channel must impact sales in the following Q1. That means that Q4 sales will be overstated and that Q1 sales will be understated. The real mystery is why "analysts" are surprised every year by this practice. TTFN, CTC

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