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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (3693)	11/23/1998 7:40:00 PM
From: Bill Wexler	Read Replies (2) \| Respond to of 4634

I'll say it before and I'll say it again ...buy CPU! 1) I believe that analysts completely missed the boat on this one. The company has been soundly thrashed because last Q's numbers were weak (even though they beat estimates by 100% before charges). 2) Halpin's guidance for this quarter was very cautious (he said same-store sales may be down), however, management has a long history of downplaying the future. From my conversations with several CompUSA GMs, I'm getting the impression that this will be a very, very good quarter indeed. 3) Analysts didn't like the Computer City acquisition because they felt it was too expensive. What they completely missed is the fact that CPU renegotiated the purchase price with Tandy (172 mil. down from the original 211 mil.), that several of the old stores were sold for cash, that all of the old inventory has been eliminated, and that the converted stores are now turning profitable. 4) CPU is rapidly expanding into all forms of digital media. 5) CPU's training and support businesses are booming. 6) CPU's online and mail order businesses are growing. 7) Insiders have been aggressively buying stock at these levels. Note that insiders were buying stock in 1994 when analysts were predicting that CPU would be bankrupt. I am convinced that this one is at least a double from these levels. I also see no reason why the stock couldn't surpass its all-time highs. I believe that on a relative-valuation basis, this is even a better buying opportunity than the 1994 bottom. The company is now financially in much better shape, has nationwide brand recognition, and is growing at an excellent clip. I reiterate my very strong buy recommendation for CPU and urge investors that have already bought to dollar-cost average if the stock dips in the short-term.