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

To: Racso who wrote (54798)	3/25/1999 8:55:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

Some cautionary words from Briefing.com FWIW ___________________________ General Commentary: A little good news for a change... After the close, chip maker Micron Technology (MU 53 1/8 +2 1/2) reported much better than expected earnings on a sizable sequential jump in gross margins from semiconductor operations... Company reported gain of $0.08 v. estimated loss of $0.02 and year ago loss of $0.24... Sales surged 35%... Stock likely to trade sharply higher in today's trading, giving boost to rest of chip sector. Micron's earnings news comes on the back of a strong late rally in techs... Big names led the recovery, as evidenced by the following Intel (INTC 119 1/4 +4 11/16), Cisco (CSCO 104 7/16 +4 1/8), Microsoft (MSFT 171 1/4 +4 11/16), Dell (DELL 38 1/2 +2 11/16) and CMG Information (CMGI 176 3/8 + 12 3/8)... Unfortunately, recovery lacked conviction as volume totals were relatively low and decliners still outpaced advancers... Also more new lows than new highs... As such traders should not put too much stock in yesterday's closing rally... Given lingering uncertainties regarding the PC group, Briefing.com holds to view that trading will remain choppy with gains/losses one day giving way to losses/gains the next. Computer Systems & Peripherals Bargain hunters stepped in and did some light buying in the badly beaten down PC group... Beneficiaries were Dell (DELL 38 1/2 +2 11/16), IBM (IBM 169 3/4 +4 3/8), Gateway (GTW 65 15/16 +2 1/8) and Compaq (CPQ 31 9/16 +15/16)... But until investors get better feel for pace of current/future growth, rallies will prove limited and short lived. Disk-drive stocks took a hit in reaction to Read-Rite's (RDRT 6 1/8 - 1 5/8) earnings warning... Other notable losers included Hutchinson (HTCH 23 15/16 - 1 3/16) and Seagate (SEG 26 - 2 1/8)... Should be noted that Salomon Smith Barney reiterated buy rating on SEG noting that company should meet Q3 earnings estimate of $0.46. However, deal between IBM (IBM) and EMC Corp (EMC 118 7/8 +5) in which latter will buy up to $3bln in computer parts from former over next 5-yrs, seen as direct challenge to Seagate... Big blue continues to steal share in the disk-drive market. After the close, SCI Systems (SCI 35 7/16 -9/16) surprised the street in announcing that it will fall short of Q3 revenue and earnings projections... Stock likely to fall be at least 2 to 3 points... Doesn't bode well with Jabil Circuits (JBL 37 1/4 - 1 1/8) and Solectron (SLR 46 1/2 -1/4) shareholders either.

To: Racso who wrote (54798)	3/28/1999 2:16:00 PM
From: Racso	Read Replies (3) \| Respond to of 97611

Abbey Cohen (Goldman Sachs) is quoted at the New York Times today recommending DELL as a technology company trading below the market multiple. While my first reaction was of incredulity I checked the Morgan Stanley High Tech Index [MSH] and found, to my surprise, that it is indeed the case. But the most striking and appealing observation is how attractive CPQ looks compared to DELL and the MSH: Price/Earnings (current yr) MSH: 61 X DELL: 51.3X CPQ: 18X Price/Book MSH: 19.2X DELL: 49.5X CPQ: 4.7X Price/Sales MSH: 12.1X DELL: 5.3X CPQ: 1.7X