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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (5689)	2/26/1999 1:03:00 PM
From: LK2	Respond to of 9256

Robert, RE-- Merrill Lynch's Steve Milunovich, who wrote a positive report yesterday about the PC sector outlook, and today released a negative report on CPQ. As a respected hard drive expert recently noted, "the rules are dynamic." (I haven't obtained permission from the source to attribute the quote, but I doubt very many people would disagree with the basic idea). Yesterday's news is yesterday's news. Sorry I didn't show the URL for the news article that briefly discusses the analyst downgrades. Mike Kwatinetz, CS First Boston analyst, says his downgrade was based, at least partly, on recent data he got from CPQ that January sales were below the company's goals both in the United States and Europe. The analyst openly says that in his report. I would guess that Merrill Lynch analyst Steve Milunovich is using the same information as the basis for his earnings estimate cut. Please read the article below, in its entirety, and you will see that (from what I can read), these analysts are basing their new estimates on information they recently got from/about CPQ For Personal Use Only >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> biz.yahoo.com Friday February 26, 10:44 am Eastern Time PC maker stocks hit as analysts see Q1 shortfall NEW YORK, Feb 26 (Reuters) - Shares of personal computer makers tumbled on Friday after two Wall Street brokerages cut their first quarter earnings estimates on Compaq Computer Corp. (NYSE:CPQ - news), the top personal computer maker. Merrill Lynch analyst Steve Milunovich slashed his first quarter earnings estimate on Compaq to 30 cents a share from 35 cents, while Mike Kwatinetz, of brokerage CS First Boston, dropped his quarterly projection to 31 cents a share from 36 cents. No further details were immediately available from either analyst. Compaq stock fell $6 to $35 in composite U.S. stock exchange trading. Gateway Inc. (NYSE:GTW - news) dropped $6.44 to $73.69, while Hewlett-Packard Co. (NYSE:HWP - news) fell $2.94 to $68.25, both in composite trading. Dell Computer Corp. (Nasdaq:DELL - news) lost $3.50 to $79.25, continuing its slide from Thursday, when it gave up $1.50 in active trading, after Merrill's analyst warned that long-term industry growth rates may be hurt by tumbling PC prices. Kwatinetz said in a research note that he cut his earnings, revenue, and gross profit margin expectations after learning from Compaq that January sales were below the company's goals both in the United States and Europe. Weakening demand among its network of PC distributors may be a factor, he said. He wrote that ''Since Compaq appears to have had a shortfall in January, the question arises: 'How is the industry doing?' In retrospect, Dell and HP's slight revenue shortfalls may have been more of an industry issue than we previously believed.'' Copyright © 1999 Reuters Limited. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

To: Robert Douglas who wrote (5689)	2/26/1999 2:48:00 PM
From: Jags	Respond to of 9256

>>8% margins at DELL always seemed a bit high, after all >>aren't they just a retailer? And the valuations comparable to those with real technology holds (like msft intc csco emc) Jags

To: Robert Douglas who wrote (5689)	2/26/1999 6:45:00 PM
From: Stitch	Read Replies (3) \| Respond to of 9256

Well folks, Now What? Under any light source this is extraordinary. I think we are getting a taste of the velocity that is in this market. Now the question that still goes begging is whether the steam is being let out of the bag or are we simply seeing extreme overselling. I think it is the latter but will be awfully busy this week end trying to parse out a plan. I have had substantial erosion in my SEG, RDRT, and MXTR and may have too stubbornly held through this incredible week. I actually do not feel discouraged and think we may be seeing an incredible buying opportunity here. In any case I have until Monday to read all the hand wringing and maybe I will change my tune. In the meantime I am eyeing VECO and CPQ hungrily along with averaging my other more ill timed holdings. By the way, I suspect that SEG executives are privately high-fiving in the boardroom. Their recent allocation for a half billion dollar buy back is going to look awfully smart when the dust settles IMO. Robert, I think the summary PC forecast posted suggests it is time to get serious about discovering an appliance play. Any thoughts to add to that discussed on the PC thread? Best, Stitch