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

To: Howard Feinstein who wrote (56642)	4/10/1999 10:54:00 AM
From: needawin	Read Replies (1) \| Respond to of 97611

It seems to me a lot of smart money knew things would be bad. For the last month in a strong market each time cpq rallied with the market and approached $33 it immediately went to $30 or below. I look for the smart money to hope small investors over react and give away their shares. They will not be buying Monday but will wait for the stock to go below $25. Then after individuals have sold - a few months later the stock will be back to $30 to add insult to injury - moral buy and hold if you believe this stock has a future. You can't beat those with superior knowledge.

To: Howard Feinstein who wrote (56642)	4/10/1999 10:55:00 AM
From: rupert1	Read Replies (2) \| Respond to of 97611

Howie: CPQ went from $23 to $38 and then from $23 to $51 last year when its revenues and earnings were much less than they are now and with no prospect of an Alta Vista spin-off. Why could it not do at least the same again? To believe that it might not, you would have to believe that there is to be a fundamental and radical reduction in demand for units, and/ or in margins. Last time I looked the internet was growing and demand for computers of all kinds was growing all over the world. There comes a point when price reductions have to stop, weaker vendors get crushed. The Flekenstein theory of the impoverishment of PC vendors through commodisation of computers has not been accurate in the last five years, and while commodisation yields problems of adjustment, they are only that. Commodities make profits for the biggest and most efficient manufacturers and, as I have said before, the vendor of a commodity has a very good customer base to sell peripherals and high-end hardware and services. Then there is the great unknown - the drive by a company to invest its profits. Perhaps CPQ will buy out Starbucks and diversify its earnings. Perhaps its holding in Alta Vista will increase its net assets by $2 billion in a matter of a few months. Go to www.compaq.com and click on some of the charts. COMPAQ has grown consistently and dramatically year on year ever since its inception. The huge jump in the growth of its revenues in 1998 due to the DEC acquisition has brought with it a slow down in the growth of its eps. This is partly a function of the expansion of its share issue. In time this will be assimilated and the hgher rate of growth in eps will continue. After all 15 cents is 14 cents more than 1Q 1998.