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

To: rupert1 who wrote (76632)	1/25/2000 10:14:00 PM
From: Captain Jack	Respond to of 97611

Vic--- <<"There may be some disappointment in WS " An understatement! <<"few who might upgrade">> MAybe in 6 months,, unlikely now IMO. <<"cannot see large institutions selling off - there is no reason.">> Not so certain,, probably not but they were not great at hanging around last year at this time... I see few buyers though,, why come now? Wait and see what 6 months brings. It seems to be a very slow period coming IF the mkts remain stable-- if not they will be happier on the sidelines. <<"The initial pressure on the stock price will be from momentum traders who bought on the hype expecting $35/37/40 soon. But what percentage of the float do they own?">> Not much but can cause enough volatility to get those on the edge to bail...

To: rupert1 who wrote (76632)	1/25/2000 10:25:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

Victor - Very cogent post. The analysts were expecting less revenue and less growth than CPQ reported, and were upgrading based on those assumptions. They work mostly by the numbers and they will not be fooled or confused by the press. Not to say they are such smart guys - they work a lot better with 20-20 hindsight - but CPQ beat expectations, it can't be anything but good news. Furthermore the upside was "predictable" but on the high side of the estimates - exactly where good guidance would put it. Perhaps the street is getting more comfortable with this style of guidance. I especially like the conservative guidance around 1Q - as you point out, this is a seasonal pattern and nothing unusual. If the company continues to concentrate on cutting costs, building revenue responsibly, and investing in both the existing high margin businesses as well as the visible high flyers, the investment community will be a lot more comfortable with assigning a higher multiple - right now there is a risk discount on the stock. I would be happy with 40's mid year and 50's late in 00 or early in 01, especially if CPQ once again becomes one of those stocks (like INTC and MSFT) that I rarely look at or think about - just occasionally check to see how well it's doing.