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Technology Stocks : HWP -- Hewlett Packard -- Ignore unavailable to you. Want to Upgrade?

To: genek who wrote (2821)	1/31/1999 11:50:00 AM
From: Laszlo	Read Replies (2) \| Respond to of 4722

Maybe the 0.88 number comes from the 15% industry wide growth in the PC shipments? Shipments don't necessarily translate to earnings. I have always wondered whether HP makes any money on PCs. HP is not primarily a PC company like Dell or CPQ. with a PE ratio now approaching 27, with earnings growth actually somewhere between -5% to 5% (according to the last couple quarters of 10Qs), I think HWP is due for a fall. I agree with you on the P/E. It's extremely high from a historical perspective. I think this is the same scenario as we saw prior to the last earnings release. A big run based on analysts expectations, setting it up for a big fall. Trouble is, I've been buying Feb puts -- I'm starting to wonder if should have been buying Mar puts. I'm starting to feel a little exposed during this run-up. This February's earnings timing is actually better than in the past as far as options are concerned. Earnings come out BEFORE options expiration, not after as has been the case in the past. I think you'll do good. The main risk is that Q1 has been the best quarter in the past couple years. Even if the whisper number of .88 is hit...so what? In Q1 1997 basic earnings were .90, in '98 they were .89. I personally think that even .88 would be bad news. That would be 3 consecutive years of shrinking Q1 profits. Of course, I could be completely wrong <g> LN