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

To: Night Writer who wrote (35449)	10/28/1998 11:57:00 PM
From: Dr. David Gleitman	Read Replies (5) \| Respond to of 97611

To all: I'm looking for some thoughtful opinions. I've been holding 10 K of CPQ (or Comcrap, for those of you that are in the same situation) for the past 14-15 months at an average cost of 36. Over the past year, I finally smarted up and purchased DELL and have done quite well with it time and time again. Can anyone provide me with any reason why I shouldn't liquidate my CPQ position at this time to purchase more dell. Quite frankly, despite all of these glowing recomendations from various sources, this stock is just not responding. Opinions????? Thanks, David

To: Night Writer who wrote (35449)	10/29/1998 1:30:00 AM
From: Aitch	Read Replies (2) \| Respond to of 97611

I know the Pru upgrade is a couple of days old, but here is the nitty gritty anyway with some excerpts from the text: 12-Month Target Price: $36 ******************************************************************** Ind. Div.: $0.01 Yield: 0.20% Shares: 1,675 mil. 52-Wk.Range: 38-23 ****************************************************************** EPS FY Year P/E 1Q 2Q 3Q 4Q Actual 12/97 $ 1.26 $ 0.26 $ 0.33 $ 0.29 $ 0.38 Current 12/98 $ 0.42E 69.6X $ 0.04 $(0.05) $ 0.08 $ 0.37E Current 12/99 $ 1.80E 16.3X $ 0.43E $ 0.43E $ 0.44E $ 0.50E ******************************************************************** "With the PC inventory correction largely complete, Compaq's core PC business is significantly healthier and poised to return to growth." "We believe near-term catalysts for the shares include a seasonally strong 4Q PC market and a return to more substantial earnings growth. The fourth quarter will be the first quarter in which DEC is expected to be accretive to earnings - this should cause investors to have greater confidence in 99 earnings estimates." "After the channel stuffing, subsequent inventory clearing and marginal profitability during the first half of 1998, Compaq reduced channel inventory levels down to targeted levels of 3.5 weeks in June and 3 weeks in September." "Compaq management has targeted the reduction of DEC's E/R ratios from historical levels of 22-24% to 15-16% levels. These reductions will be fueled by headcount reductions, 17,000 (or approximately $1.02 billion) targeted to be completed over the next 9 months. By the end of the September quarter, 5400 - or approximately $324 million - have already been completed." "....if Compaq management is successful at re-igniting the company's (DEC) top line product growth prospects, then earnings upside could easily exceed $2.00 per share." "We have used a 20 times multiple on FY99 earnings to reach our price target of $36 per share." H