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

To: William Partmann who wrote (2950)	3/3/1999 3:20:00 PM
From: w0z	Read Replies (3) \| Respond to of 4722

"Investment banks Morgan Stanley Dean Witter and Goldman, Sachs & Co. are serving as advisors to Hewlett-Packard." I believe the above was written with regard to the restructuring plans...not necessarily the underwriting.

To: William Partmann who wrote (2950)	3/3/1999 3:30:00 PM
From: Oeconomicus	Respond to of 4722

Bill, both were mentioned in the HWP press release as advisors in this restructuring. Probably a good bet that they would handle the IPO, but who knows. That said, however, they're hardly the only ones with favorable opinions on the stock. Merrill has it as "Accumulate" with a 12 month target of $82, a 19% one year return from here. Robby Stephens has it as a "Buy" and published a new report estimating the values of the two pieces. Using Price-to-Sales comparables for each piece of "the new measurement company", they value it at $22.6 billion or about $21 1/2 per share. This leaves "new" HWP at a net market valuation right now of $49.4 billion or about $47 per share. Again using industry comparables (excluding Dell, BTW), they apply an average P/S of 2.15 to arrive at a value of $85.7 billion or $81 3/4. If they are right, we can buy today at $69 a company that, restructured, is worth $103 for a 50% gain. Of course, P/S is just one of several possible gauges by which to value the pieces. Still, if the potential is for gains of 19% to 50% (or more with an Asian recovery), I'd call it a buy too. Best regards and usual JMO disclaimers, Bob