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

To: robbie who wrote (19605)	3/5/1998 1:52:00 PM
From: robbie	Read Replies (3) \| Respond to of 97611

Now Dell est. for FYE 1/99 is 3.63. 133.5/3.63=36.77. So the score is Dell 37, Compaq 16. If CPQ had Dell's PE, CPQ stock price = 62.14 If Dell had Cpq's PE, DELL stock price = 57.97 More realistic - CPQ and Dell have PE of 27.5, and CPQ stock price is 46.47, and Dell's is 99.82 Robbie

To: robbie who wrote (19605)	3/5/1998 1:57:00 PM
From: Andreas	Respond to of 97611

Wall Street is full of hypocrites when it comes to p/e's. Varying p/e's between industries is normal and logical (ie. p/e's for many cyclicals like autos are around 6 - 8). And even within the same industry p/e's will vary depending on such factors as growth of the particular company as compared to growth of others in the same industry. However, you're right - the disparity between cpq and dell is way out of line. CPQ's p/e ought to be higher (22 - 27 ) and Dell's ought to be lower (30 35). This is where the hypocricy comes in. Right now Dell is suffering from tulip syndrom (remember the tulip fiasco in europe 4 - 5 hundred years ago? One tulip bulb was worth lots of acreage; ten cows plus 20 sheep plus plus plus - pure nonsense. But you couldn't tell anyone right before the bubble burst - they'd string you up fore heresy). Dell carries with it less uncertainty as compared to cpq and therefore since the money has got to go somewhere - Dell's the place. They know better but they are hoping they can bail out and leave the hot tulip/potato in the next guys hands.