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

To: robbie who wrote (50018)	2/26/1999 2:32:00 PM
From: rupert1	Read Replies (2) \| Respond to of 97611

robbie: talking of "gloating" that's how CNBC described EP/CPQ executives two weeks ago when commenting on DELL's problems "the pendulum is swinging etc". That's another reason to wonder whether the emphasis given to today's downgrades is overdone. CPQ is definitely on an upswing, growing faster than the market, taking market share from DELL and IBM in certain areas, and enjoying increasing bottom-line returns from the DEC acquisition.

To: robbie who wrote (50018)	2/26/1999 3:03:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 97611

No Robbie, I'm not here to gloat. I think my point is that in careful study of the sales trends of CPQ, DELL and GTW it is clear to me that Compaq routinely stuffs its channels in the fourth quarter. That means that if you invest in CPQ (I do not) you need to have a crash helmet on when the analysts annually "discover" Q4 channel stuffing. I am not being critical of Compaq stuffing its channels during Q4. It must do so in anticipation of Christmas sales. But there is a clear implication that the excess inventory sitting in the channel must impact sales in the following Q1. That means that Q4 sales will be overstated and that Q1 sales will be understated. The real mystery is why "analysts" are surprised every year by this practice. TTFN, CTC