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

To: Chuzzlewit who wrote (53240)	3/14/1999 1:55:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

Chuzz - I think this particular reference makes the usual mistake of confusing CPQ's own inventory with "Channel inventory". I usually have to call around to friends in the channel and ask them what they think is going on to get a feel for what CPQ is doing in the channel, since the numbers don't appear anywhere directly. I did not talk to anyone in January but did have occasion to talk with some people in February, and they said that they could not get enough CPQ product, that especially "Hot" stuff was often back ordered several weeks. There is evidence of a little bad feeling, several thought that CPQ was preferentially routing product to their own direct customers. CPQ's internal inventory going up by a week in January is interesting but not a likely result of channel stuffing, just the opposite. Given that they already said January sales were slower than expected, I would have assumed that the internal inventory would go up, since they don't change production schedules very quickly. Channel stuffing would have the effect of lowering internal inventory, I would think. My wife has several friends who work in Manufacturing at CPQ. I learned this weekend that all Houston manufacturing sites were offering overtime and weekend shifts since the middle of February, and plan to keep the "round the clock" effort going at least through mid-April. These people work in both consumer and server fab, so CPQ is making as many of those products as they can, FWIW.