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

To: Mohan Marette who wrote (17019)	2/7/1998 8:00:00 PM
From: Satish C. Shah	Read Replies (1) \| Respond to of 97611

<<1) One apparent reason is the number of stocks outstanding. CPQ now has over a billions shares outstanding whereas DELL has only approx.365 million shares outstanding.>> CPQ = 1.6 b, DELL = 326 m <<2) PE- Look at the PE of each companies,Dell is at some 40 something and CPQ is approx 25 or something.This means investors are willing to pay more for DELL than CPQ based on the the rate of growth in revenue and earnings,both are higher for DELL.>> at today's prices pe for CPQ = 29.5 DELL = 46.35 <<If DELL were to have the same # of shares outstanding and earnings & growth rate were similar to CPQ then at these levels Dell wouuld have traded for approx.$37.00.>> If Dell and CPQ were identical (same # of shares, growth, earnings) as you are suggesting, then I do not see why the price should be different. But if you mean DELL had the same # of shares as CPQ (and DELL's current growth and earning) then DELL would trade at 108 X 326/1600 = about $ 22 ( to keep the current market capitalization.) I hope this clears up the picture a tiny bit. Regards, Satish