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

To: Roads End who wrote (17634)	2/18/1998 11:59:00 PM
From: Kevin Chesser	Respond to of 97611

Riechers, thank you. The overly optimistic glee on the DELL board has reached a point that it sends me "DELL is a SELL" signals. I played DELL's earnings release precisely a year ago. The stock did rally the next morning but settled up only a fraction by the end of the day. Over the ensuing weeks, it settled down over 10%. I have watched DELL since. Seems Dell runs in the week or so ahead of earnings. "Surprises" at the announcement and the profit taking moves it lower. Am I jealous of its move, earnings surprise and popularity? Sure, but it will help CPQ. Ford and GM compete fiercely but both can succeed. Think about it though...in 1991 or 1992 CPQ had its last "major" crash. As CPQ recovered, DELL was practically unheard of. Even a couple years later in 1994, DELL was still struggling (I actually wished then that CPQ would acquire DELL...but I never bought DELL stock!) DELL came around in 1994, 95 in time to catch the PC market beginning to explode. They are doing business well. Of course their growth rate is higher...they were (and are) smaller. Meanwhile CPQ was 2+ years into its recovery. Revenues were already escalating. Translate...growth rate is slower because CPQ was established. Today, BOTH companies are growing market share (actually CPQ's point growth was greater than Dells..but not on a percentage basis <ggg>). My point...both companies have enjoyed the robust 90's. BUT which stock do you want to hold. DELL will have to grow at 50% annually forever to maintain its valuation. Can you spell R-I-S-K-Y. Just my (nonaggressive investor) opinion. Kevin