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

To: rudedog who wrote (91084)	5/3/2001 1:47:57 PM
From: profile_14	Respond to of 97611

Rudedog, I think you are disagreeing with me on the point regarding how long it can last. If so, I would only point out that Dell has more cash (double) than Compaq right now. Funding going forward should be an issue if Compaq cannot right its cost structure to mirror Dell's. On the other points made in your and the other poster's note I agree wholeheartedly. As I said in one of my last sentences, it is a question of who loses less, not who gains. By commoditizing products one takes away any allegiance to the source of the product unless there is the depth of service and or other products to follow up on with the customer. In that department, I think Compaq wins hands down. Either way it forces companies to optimize their operations sooner rather than later. I presently do not own either stock or options on either stock. I just finished buying an initial position in GLW again. It is in a trading range and it is more volatile than CPQ, allowing one to cycle it faster. See the Briefing.com article below regarding its value. briefing.com Trader's Edge: Corning Inc (GLW) 03-May-01 09:45 ET The chase is on... The precipitous advance in the Nasdaq over the past several weeks has left many investors sitting on a pile of cash. Investors are now scrambling to find sound investment ideas, fearful that the Nasdaq will resume a bull advance without them onboard. A perusal of the fundamentals of the best and brightest reveals that the vast majority have already become disconnected from their fundamentals. You will be happy to discover that there are a few that still fall into the value category. Trading Points What is there to like about a market that has already run more than 35% in a little less than a month, and where valuations have already returned to bubble levels? Longs have a couple of things in their favor: a) investors continue to place significant bets on the bear side that this advance falls on its face and lows are retested; b) the mountain of cash, which Mario Bartiromo incessantly reminds us is building on the sidelines, is finally feeling bold enough to move back into the market. We feel that the intelligent way to reenter this market as an investor is to decide which stocks mutual funds view as "must owns." To meet this criterion a company must be the number one or two player in its space; carry a multiple that is not at a significant premium to its growth rate; and possess a management team that Wall Street feels it can believe when earnings guidance is given. This analyst thinks that Corning (GLW 23.61) fits the bill. This leading provider of optical components to the telecom industry has seen 18 months worth of share price gains go up in smoke as investors were beaten out of the market by serial earnings warnings from the tech sector and eventual capitulation by overexposed mutual funds... We now find the stock trading 30% off its 52-week low of $18.19 reached April 3rd. Corning has guided down estimates twice over the past two months. Recent string of lowered guidance has pulled down the consensus numbers for 2001 and 2002 to $1.01 and $1.20 per share, yielding earnings multiples of 23.5 and 20.0, respectively... Given that sector leaders such as Cisco and JDS Uniphase have already reinflated to forward multiples of 66 and 68, respectively, Corning presents itself as a legitimate bargain. More compelling is that while these companies are projected to show negative earnings growth in 2002, GLW is still expected to grow EPS at respectable clip of 19%. Not yet a given that earnings estimates for 2001 have bottomed. However, a more important question is if investors would be willing to accept another downward revision in numbers from the company without throwing the stock into the fire. We think that the market would prove accommodating. Continued participation in this leg of the recovery requires only indication from the company of a deceleration in revenue and margin declines... In light of the drubbing that most investors have taken in their portfolios over the past year, it would seem that companies would be put to a higher standard. They will, later in the year, when the focus shifts from damage control to the ability to reaccelerate growth. Until then, Corning will be a "must own."

To: rudedog who wrote (91084)	5/3/2001 1:54:26 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Rude - A question for you in regard to your update. Why do you think Dell is not more efficient in the low end server business? I just read a 1U server review in PC magazine where Dell won because it had a 1U box with better specs selling for $4196 as compared to the Compaq box for $5904. I bought a workstation from CPQ last time, from Dell this time. Pricing was not even in the same ballpark, although I see CPQ now cutting workstation prices. Thanks, John

To: rudedog who wrote (91084)	5/3/2001 1:57:57 PM
From: profile_14	Read Replies (2) \| Respond to of 97611

Furthermore, I think Dell is waving the market share flag and making blunt statements of brutal competition in an attempt to put forward a marketing message that is aggressive AND that at the same time, masks the real issue, which is that they are going to have lousy earnings for a while to come. Instead of warning, just mask it as something else while dropping prices a little bit more now that inventory issues at the chip makers are not a bottleneck. Dell made disparaging comments regarding Steve Jobs and Apple Computer in the latest BusinessWeek issue. I think that either he is a great poker player or the biggest fool for being openly vociferous about his competition in a way that shows more his anxiety than his acumen for competing and making money. I would not call those statements worthy of a first class CEO. You also win by being humble and killing them with kindness, not by being brazen and openly uncouth.