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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (70434)	10/27/1999 11:21:00 PM
From: Captain Jack	Respond to of 97611

HHHHMMMMmmmmmmmmmm -- " but is looking to hear more about future strategy from Compaq, which did not give much guidance about fourth-quarter profits">> and probably will not either ...

To: E_K_S who wrote (70434)	10/27/1999 11:33:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

I took my cue from the response to analysts on this question by Capellas during the CC - he went through the list but pointed out that there were NO short term supply problems, only the possibility that there might be spot shortages in the future given the high industry demand for those key components. We know they have long term agreements for LCD and DRAM with Samsung, and now also for DRAM from Micron. He mentioned processors as a potential problem - without being specific. He might have been refering to AMD's ability to maintain yield and ramp K7 production. Have you listened to the replay of the analyst CC??

To: E_K_S who wrote (70434)	10/28/1999 7:52:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

Eric: If the future price of a stock could be determined by a slide-rule there would be no market. Nor would there be any need for analysts - professional or amateur. A computer would be more consistent and objective. There are many more variables than those you listed or have been listed by the analysts you cite. A few points to consider: 1. The removal of doubts about YK2. 2. The catch-up effect after YK2 delayed expenditures. 3. Continued economic growth in the US joined by recovering world economies. 4. The exponential growth of e-commerce in the US and the world. 5. The introduction of Windows 2000. 6. The shift to wireless. 7. The shift in Europe and other international markets from metered to unmetered access to the internet. 8. Weaknesses in COMPAQ's competitors. 8. The introduction of new COMPAQ consumer and enterprise products. 9. The re-focussing of COMPAQ services and commercial PC's. 10.The removal of up to $1.75 billion in expenses. 11.The progressive transition to direct. 12.The shift in market perceptions - computers moving from being a troubled sector to a sector on brink of new cycle of rapid growth. 12.Market's tendency to exaggerate trends, to price future growth, and to anticipate by 6-9 months. Finally, one does not have to believe that COMPAQ's or any stock's price will always be in a steady state of equilibrium with its fundamentals (it has been oversold for some time): it is perfectly possible for a stock to dip and spike around its value line. I believe that the targets for earnings produced by the analysts you cite are deliberately conservative and I believe that in the next 12 months the forward p/e will fluctuate between 15-30.