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

To: Captain Jack who wrote (81967)	5/4/2000 7:43:00 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

CJ, Do you need me to post $50 by January 2001 every day? Just because I don't spend my life reading and posting here doesn't mean I have changed my mind. The general economic news and fears are hurting the whole market, but anyone reading your posts would think CPQ was the only company suffering. NW

To: Captain Jack who wrote (81967)	5/4/2000 8:52:00 PM
From: Salah Mohamed	Respond to of 97611

CJ ... About CPQ Stock Price >>>Since there is no longer talk of 40 or 50,, hell not even 30 now,,, are you buying at this level? Looking for lower,, 25 or ??? Evidently you think MC/Ben will lead this into the promised land,,, so where are you buying?<<< If there is no talk about 40 or 50, it doesn't mean that we aren't going to get there. It is probably a good sign that almost everybody is downbeat. Yes, I would buy at this level, and yes, I do believe MC/Ben will lead the stock into the promised land. Let me explain. The current weakness in the stock is clearly tied to the overall market weakness and more importantly the less than robust guidance for Q2 which no one mentioned here. The guidance by Greene for Q2 during the CC is as follows: Revenue: 10.2B Operating Margin: 22.5% to 23.5% Expenses: 18% Tax Rate: 32% This translates to an EPS range of $.18 (10.2B x (.225-.18) x (1-.32) / 1.74B shares) to $.22 which is obviously lower than expectations. One smart analyst jumped immediately on these Q2 numbers and asked if they are guiding the analysts lower, MC response was 'we have absolute confidence in the guidance for the year, we stand behind these numbers', or basically something to this effect. In any case, the revenue number looks good but the EPS numbers are weak. Whether Greene was being conservative in his guidance or not, I don't know, but I remember that when he was selected for the CFO job with CPQ, several analysts said that Greene was always conservative during his days with Kodak. Then, if MC has absolute confidence in FY00 numbers (EPS of $1.07), and it seems that several analysts believed him since four of them upgraded the stock the next day, it is safe to assume we would make this year numbers. For FY01, the consensus estimate is $1.50. IMO, when Q3 results are announced sometime in October and it becomes apparent that MC is on track, the stock will be awarded a reasonable forward multiple of 30 and the stock should hit the 40-50 range by late 2000 or early 2001. Add to this that the November to January period has historically been good for stocks. Yes, I do believe that this will happen, but don't take my word for it.