Interesting Comments from Barron's....FYI...
<<From today's Barron's Weekday Special.
Another Blow for Compaq
Compaq Computer's disclosure on Friday that its quarterly profits would
come in at less than half of analysts' estimates shook up the industry. But
some, like Rob Cihra, a PC hardware analyst at ING Barings, think investors
need not be alarmed.
He says the shortfall was expected -- "but not to that degree," emphasizing
that revenues were still only 3% short of his estimates. Nevertheless, he thinks
the stock won't go down much in the short term.
Reiterating what he told Barron's Online last month ("Tech Managers Say It's
Buying Time Again," Weekday Trader, March 2), Cihra sees the problem as
both a seasonal and Compaq-specific issue, rather than a sign of an
industrywide malaise.
"[Compaq's move to an] indirect model is still relatively disadvantaged with
respect to Dell," he says. But with its current restructuring, "at least they're
taking the steps in the right direction." Once that's behind them, he believes
Compaq can remain competitive in growing revenues and earnings.
With one caveat: "Investors should
remember that the PC industry is no
longer a hypergrowth industry. It is not
yet mature, but getting there," he
explains. But he thinks there are still
opportunities for investors in the group.
Compaq and Dell remain his top picks.
"It's still possible for a company that's
executing well to do well, especially in a
consolidating industry,' he says.
Execute or be executed, it seems.>> |
