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

To: Mike Gordon who wrote (22884)	3/21/1998 9:28:00 PM
From: E.H.F.	Read Replies (1) \| Respond to of 97611

Yes, I agree with you that perception is reality...but that only works for so long. The rate of future earnings growth estimations will eventually change the perception. Right now, I'm not sure what CPQ is going to earn this year, and I'm not going to listen to any analyst. What is a fact is that previous earnings growth has been very good, and we are no where near a computer glut...there are millions and millions of new users still to purchase their first computer, and then there's still the repeat business. Regardless of what they earn this year, I expect them to grow earnings at a rate that will change perception and cause the stock to raise. Brokers, analysts all look at the present. I don't go by P/Es so much as I look at the earnings growth rate. There's people who think AOL is too high, because their P/E is 500 plus, but if you look at the fact that they earned .12 last year, are expected to earn .92 this year, and 1.70 next year, the price is fully justified, and may even be undervalued. That is a 142 percent compounded return (earnings per share) over a three year period. If they can even come close to maintaining this type of earnings growth, AOL shareholders are going to be very happy campers. This is a long term perspective. E.H.F.

To: Mike Gordon who wrote (22884)	3/21/1998 9:56:00 PM
From: QMS	Read Replies (1) \| Respond to of 97611

I would like to know where Compaq will make its money .They have been tremendous in the server market and the rack mounted Proliant units are second to none.But looking foward the competition is squeezing this business.Dell (new sever factory) Ibm and Hp.I am afraid the margin decline in servers will no longer cover up the lack of desktop profitability.Service is in the hand of third parties.Digital is so large in terms of employees ,assimilating or canning them could take forever.Does Compaq have the managemment in place to do this?I am not clear anymore why I would buy this stock.Low price just wont cut it. Its down from 38 ,its a good franchise ,its all bull.Compaq has a major selling job in front of them .I wouldnt be suprised if we do not see 30 this year. Qms