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

To: Aitch who wrote (34467)	10/10/1998 12:19:00 PM
From: Senator949	Respond to of 97611

Expect Product sales to grow 14% year on year to $27.5Billion. Digital will add $3.7B and $7.0B to '98 and '99 respectively. EPS estimates of $0.47 and $1.75 for '98 and '99 respectively. Expect net margins to improve to 7.4% in '99 from 2.6% in '98. I guess they don't consider service a product because the numbers above are either extremely low or service sales are not included. Digital before the buyout had annual revenues of close to $14B with the high margin service sales being almost 50% of revenue. The net margin increase shown above may be accurate though, representing the high margin on service sales which I believe is close to 30%. As for the $27.5B, I was of the belief Compaq was expected to be a $40B company after the purchase of DEC and forecasting to be a $50B company by the year 2000. Robin

To: Aitch who wrote (34467)	10/10/1998 1:58:00 PM
From: CGarcia	Respond to of 97611

"I saw a hard copy of a report from Furman Selz: Initiating BUY with a '99 target of $35 based on a P/E multiple of 20x." I guess when the stock was at $30 and I kiddingly said that meant it would be at $36 same time next year(based on the yearly 20% growth rate), I was right :(

To: Aitch who wrote (34467)	10/10/1998 4:20:00 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

Harrigan, Welcome back. The well oiled roller coaster is still giving us thrills and chills. I just received a hard copy ACTION STRATEGY from PaineWebber Research. It is a little over a page and a half. I will try and outline some high lights. NW Date October 7, 1998 Opinion: Buy Analyst: Don Young Current price $26 1/5 Price Target: $40 assumes a 22 P/E on 1999 EPS estimate of $1.85 / share but note our valuation and EPS multiple may each be conservative by 15%, Providing potential appreciation to $45-$50 / share over the next 12 months. Reasons to buy Compaq (I'm listing bold type reasons and not the detail information.) Poised for a second half recovery Encouraging direct distribution initiatives are underway. Multichannel strategy viewed positively Digital Equipment acquisition is accretive even without the realization of synergies. "A New Millennium American" stock. Technically Speaking Last week's downside "gap" around the $31-$32 area (initial resistance) weakened the stock's consolidation efforts. Next support (below $27 area) lies toward its March-April 1998 lows in the $23-$24 area. Intermediate resistance lies in the $34-$35 area. Investment concerns There is a high level of risk associated with Compaq shares. PC industry profitability is subject to the balance between supply and demand, and all of the intellectual property in PC's is held by Microsoft and Intel. Also, Compaq could experience complications from integrating the DEC acquisition.