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

To: Diamond Jim who wrote (18431)	2/27/1998 4:25:00 PM
From: Bong Lewis	Respond to of 97611

i also sold 1/2 Dell position yesterday and buy cpq today at 32 1/8. Buy cpq is safer at current level.

To: Diamond Jim who wrote (18431)	2/27/1998 4:30:00 PM
From: Elwood P. Dowd	Read Replies (6) \| Respond to of 97611

THREAD......Where are all those guys that were ABSOLUTELY CERTAIN that CPQ would close today @ 39-40??? I had HOPED for 36 and that was wrong, too! Anybody out there BRAVE enough to forecast the last sale price for next Friday at 4pm??? I wouldn't even venture a guess, except to say LOWER than it is now. Okay, press me and I'll go with 29 3/4. Any takers??? Winner get an all expenses paid 7 day Carnival cruise to the Caribbean with Kathy Lee, compliments of Frank while he fulfills "other committments." McCoy and StockDork not welcome! (might as well have some fun as the stock goes down the toilet)Stephen

To: Diamond Jim who wrote (18431)	2/27/1998 5:44:00 PM
From: Rossignol	Read Replies (2) \| Respond to of 97611

James and thread, try this out for size - I've often been told that return on invested capital (ROIC) is one of the best indicators of a company's productivity, and that the metric correlates fairly well with stock price. In CPQ's last financial report, Mason said ROIC increased to 90% for the 4th quarter. In DELL's latest financial reports, ROIC was stated at 186-217% using the latest numbers. Are they both reporting competing metrics with each other? If these are comparative, it's reasonable in my mind to conclude that by this metric, then Dell is outperforming in this area by something around 2-2.4 to 1. Even if these numbers are unfair to compare, I think analysts (who love their ratios) have latched on to this highly touted metric. Someone tell me if I'm missing something - Is CPQ a quarterly number and DELL a fiscal one? Or is DELL really this much better? If they are fair to compare, now let's look at P/E ratios. Today's close shows CPQ at 26.7, DELL at 46.4. They ratio at about 1.7 - if you believe that ROIC (and I think a lot of analysts do) is an indicator of stock price, then DELL could have another 20-30 points of steam. IMHO, DELL is a dangerous short, but we'll see soon enough. This also explains why inventory is so hot - its a big component in ROIC. Combine that with DEC merger, I'm guessing ROIC is strained even more. I'm not down on CPQ, in fact just the opposite. If anyone knows how to manage this number, its Mason. And I'm sure he will, that's why I'm an investor, not a trader. They aren't going to let DELL run away with this number. If I'm missing something with the ROIC's, I apologize to the thread but would appreciate the education.