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

To: trouthead who wrote (52502)	3/10/1999 11:19:00 AM
From: rupert1	Read Replies (2) \| Respond to of 97611

JB: How many on this thread or in the market thought that CPQ would reach a high of $51 by January or February? Apart from myself ( and even I was too cosnevative in giving February as a date) nobody on this thread predicted $50 before April and most where in the May-June area when we held our competititon in November. Nobody among analysts predicted it and nobody in the market. TA analysts never even contemplated it. But the "market" took it to $51 1/2 not once but twice between December and January. Did the market know something the majority did not know or was the market wrong? In reality, I think the earnings demonstrated that at $47 CPQ was fully valued and vulnerable to the normal backing and filling until the next earnings pulled it forward with a demonstration that the DEC acquisition was progressively more profitable. So when you say CPQ dropped 37% remember that that is measured from a high that was never anticipated or predicted. The rational high was $47 the rest was momentum. Indeed a case could be made that a more reasonable and sustainable rational high was $42, and in my own thoughts I made $42 the base from which the spike to $50 would occur. So at present levels the drop from $47 is about the same as DELL sustained from its high to its recent low. Its stock split has helped DELL recover, but I think its recovery is suspect given its unsustainable p/e. The drop from a sustainable $42 high is in line with the drops suffered by INTEL and other tech companies caught up in the same worries about slowing demand for computers and disruption from YK2 compliance. BTW this is not a Ph.D thesis and I am aware of the special pleading in this analysis and offer it only as another way of evaluating changes in the share price.