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

To: Jorge who wrote (18334)	2/27/1998 2:35:00 AM
From: qpd	Respond to of 97611

Feb 26, 1998 (6:22 PM ET) - The Motley Fool Evening News PC maker Compaq Computer (NYSE:CPQ - news) lost $1 1/8 to $32 7/8 after the company was downgraded by Salomon Smith Barney to "neutral" from "outperform." Apparently the analyst at Salomon thinks the company is carrying too much inventory, which could cause problems in the near term. Using Compaq's latest 10-K filing, one can determine that the costs of goods sold during Q4 was $5.3 billion, while the average quarterly inventory balance for the fourth quarter $1.79 billion. Based on these figures, the company turned its inventory 2.96 times during the quarter, or about once every 4.4 weeks. During the previous three quarters, Compaq turned its inventories an average of 2.55 times per quarter quarter, or about once every 5.2 weeks. So based on those numbers, the company's inventory controls are actually improving rather than getting worse. However, the company turned inventory 3.1 times in Q4 1996, or once every 4.18 weeks.