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

To: Nutty Buddy who wrote (72280)	11/18/1999 8:33:00 PM
From: Elwood P. Dowd	Read Replies (5) \| Respond to of 97611

From INVESTools Advisory today... by: upallllnite 11/18/1999 8:25 pm EST Msg: 116107 of 116107 Compaq: Top Tech Value Play (CPQ) Value investor Al Frank has a good record of picking up leading high tech firms at bargain prices. For instance, he bought IBM at a split-adjusted $12 in 1993 ($95 on November 12) and Apple Computer at $16 in 1997 (now $90). Scenting another opportunity, Frank's top pick for this month is another out-of-favor tech giant. Compaq Computer (CPQ) just lost bragging rights as the top US PC vendor to Dell. But it remains the world's largest PC vendor with a 12.8% market share. Frank points out that shares of Compaq dropped by 63% since January 1999. The company lost $0.10 per share in Q2 due to weak revenue growth, too much fat in the cost structure, PC pricing pressures and post-acquisition problems with Digital Equipment. That cost veteran CEO Eckhard Pfeiffer his job in April; the company took an $858 million restructuring hit in Q3. "Nevertheless, we think a turnaround may be underway," Frank says. Chief among new signs of life are a return to profitability; Compaq posted an operating EPS of $0.07 for Q3, beating analyst estimates by $0.02. New CEO Michael Capellas credits a new strategy to "enable the next generation Internet infrastructure" with a jump in demand for Compaq's PCs. Compaq also enjoys a balance sheet with $6 billion in cash and no long-term debt. The stock trades at just 82% of revenues (compared with 485% for Dell). "We would buy Compaq up to $20.70 as our three-to-five year target price is $41," Frank says. Posted as a reply to: Msg 1 by YahooFinance Go to Msg #: < Previous \| Next > [ First \| Last \| Msg List ] Reply