Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Racso who wrote (55009)	3/28/1999 4:34:00 PM
From: JRI	Respond to of 97611

My point was focused on using Price-to-sales, Price-to-book, and P/E as being good indicators of where to put your money..looks like you agree that they are secondary to PEG....Fair enough.. I own a little Compaq, so I think it is cheap too...but Compaq's financials are not near as lucid (IMO) as Dell's (too many write-offs, factoring of receivables, inventory up/downs, exceptional tax rates, etc.) and, I think CPQ management is still trying to repair its reputation in the investment community for the past year's goofups.... for that, I think the stock currently takes a hit (and will continue to be discounted at some rate going forward...until we get a couple good quarters behind us)....although, not enough where it won't appreciate nicely this year, however... In fact, I think they will both be good investments this year, and outperform the S&P 500.. Thanks for your comments...

To: Racso who wrote (55009)	3/28/1999 6:42:00 PM
From: rupert1	Respond to of 97611

Racso : "......earnings growth let's make the same comparison based on IBES mean estimates for DELL and CPQ:D DELL: 32.4% (c73.8 for 1/00yr, c97.7 for 1/01 yr) CPQ : 29.3% ($1.745 for 12/99 yr, $2.257 for 12/00 yr)" Let's assume that a DELL growth rate of 32.4% (it was 38% last quarter on a declining trend) does not justify a p/e in the 60-80 range, where DELL has been fluctuating for a few weeks. How is the DELL p/e going to come into line with its growth rate over the next nine months? Choice: A - go sideways or slightly down for a protracted period. Choice: B - correct sharply to a share price in the high 20's or low 30's. Let's assume that CPQ maintains its growth rate (although it is on an inclining trend following the digestion of DEC and Tandem and its 4Q was statistically exceptional). It's choices are: Choice A: Gradual upwards movement to a year-end price reflecting 25-30 forward p/e i.e. $62-75 Choice B: Sharp upward adjustment to a p/e of 20-25 in 2Q and Q3 i.e. $38-55 and climb up to yea-end $62-75. This scenario does not allow for boosts caused by AV spin-off.