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

To: William King Wrignt who wrote (27690)	6/14/1998 10:44:00 AM
From: Andreas	Read Replies (2) \| Respond to of 97611

To Thread: So where are all the sleepy heads this fine Sunday? Still in bed? In church? Out on the links? Here are some facts to get things moving. (1) Institutional ownership is currently at 58.1% (down from the mid-seventies a year ago) (2) PC sales account for only 50% of cpq's total sales (compare that to dell and then tell me that cpq is just a box maker). (3) cpq's p/e ratio since May 18, 1998 is 25% below the industry average. IMHO this lower p/e is directly a result of uncertainty with cpq's near term earnings outlook resulting primarily from (i) excessive inventory and (ii) the dec acquisition. Once the transition is put behind us (say by end of 1998) and cpq can demonstrate earnings from core business (inventory problem eliminated) plus accretion from dec then the multiple should rise to at least industry average which apparently is close to 40x. At 40x and earning $2.00/shr in 1999 it is not beyond the realm of reasonableness to see cpq around $80.00 by end of 1999.