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

To: TechMeister who wrote (18833)	3/2/1998 8:05:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Tech - I'm on your side!! But, six months ago if I told you Dell would be worth more than CPQ and would have doubled while CPQ did nothing, what would you have told me? John PS - This stock is one hard mutha to figure out. Take Motorola today. It's PE is higher than CPQ's, latest news is that it's having big problems with it's cellular equipment, there was a downgrade today, and the stock goes UP. Not so with this one, keeps leading me down the path of 'the tape is telling the future story', hope I'm wrong as I'm long...

To: TechMeister who wrote (18833)	3/2/1998 9:50:00 PM
From: Loki	Respond to of 97611

TechMeister... RE: "1999 Estimated EPS = $2.50" Do the $2.50 (est. & two years away) represent any DEC numbers? Why are you looking at TODAY'S stock price in relation to a PE using estimates and two years forward? ______________________________________________________ Another way one can look at the CPQ (DEC) / DELL Last 4 quarters: (source SI profile) Net profit CPQ - 8.1% - 8.4% - 8.7% - 9.1% Net profit DELL - 7.7% - 7.6% - 7.8% - 7.6% Net profit CPQ+DEC - 5.4% - 6.4% - 6.2% - 7.0% 1. Excellent numbers for DELL and CPQ. Good for CPQ+DEC. 2. CPQ higher revenue and therefore % numbers are more impressive. 3. CPQ has tremendously more outstanding shares. Either way, looking at estimates or past performance does not explain the markets reaction to DELL vs CPQ. If CPQ+DEC have a 7.5% net profit (1998) on combined revenues one can calculate the expected share price at X 25. (See my post to Spots end of January.) Loki