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

To: Red Scouser who wrote (39765)	12/12/1998 11:51:00 AM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

Thread: Here are some selected excerpts from the IBD "Tech Turnarounds" article. It's the most positive mention IBD has given CPQ in over a year. They also mention MOT, TXN and INTC. K Last year's bad-boy stocks can become next year's darlings. (Yeah! Compaq the "Bad-Boy"!) The basic turnaround play is a company that goes through a significant down year in earnings and then starts to recover strongly. Stocks of those companies can do very well. Eugene Peroni of Janney Montgomery Scott has some guidelines for investors interested in turnarounds. He thinks a good turnaround should: - Show a rising Relative Strength rating (check!) - Have an improving technical pattern (you betcha!) - Have real prospects for better earnings (would be hard not to beat last year!) - Be a part of a leading industry (check!) - Have a history as a leading stock (check!) Compaq, a major maker of personal computers, is a potential turnaround with good credentials. This year analysts forecast a 66% drop in CPQ's earnings to .46 a share. The need to unload excess PC inventory gets the blame for the decline. Next year, though, CPQ's net should rebound 280%, with net hitting a record $1.75 per share, according to First Call. Going out to 2000, analysts see net rising 25% to $2.18 per share. The company should benefit from a "built-for-you" PC program and the assimilation of the Digital Equipment merger. CPQ's earnings in the fourth quarter should be down 16%. However, in the first half of next year, they should jump sharply to .75 a share from a depressed .03 a year ago. CPQ's stock is starting to move. It broke out of a 13 month base early this month and is hitting new highs. The stock's Relative Strength is 92 up from 65 two months ago. It carries a positive "B" Accumulation/Distribution rating and belongs to an "A" rated industry group. Compaq was a leading stock in '96 and the first half of '97.