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

To: Andreas who wrote (59923)	4/26/1999 11:25:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Picked this up on the Burke thread... John To: Earlie (57473 ) From: per strandberg Monday, Apr 26 1999 5:10PM ET Reply # of 57525 Earlie, just a tiny note from Sweden. Compaq's distributor just warned, estimating to sell 1.0 mil PCs this year, down from last year's 1.6 mil. Definitely slowing over here, even without eMachines! Regards Per S

To: Andreas who wrote (59923)	4/27/1999 4:48:00 AM
From: rupert1	Respond to of 97611

I am not assuming any such thing. If you have been following my commentary on this, you will know it is I who have been pointing out the difference between the rising number of institutions becoming owners in the last few months and the fall in percentage owned by institutions from the peak of about 74% to the recent level of about 56%, which you incorrectly cite as 50%. Your's is only one possible observation and not the most relevant. There may have been net selling by some of the institutions since 1997 but the figures show that in the last 2-3 months, the number of institutions owning the stock has been rising on an almost weekly basis. You are incorrect to suggest that there has been a net selling in those weeks, the percentage has remained more or less constant. I think what is happening now is more relevant than what happened between 1997 and some point in 1998. Over the long term I believe the average is nearer the 56% than the 74%. The latter was an "unhealthy" spike. Usually, when a company has such a large percentage of its stock owned by institutions it is vulnerable to sharp correction if the herd mentality of the institutions kicks in and they sell all at once to take profits or for any other reason. It is also "unhealthy" because it leaves little upside for movement in the share price from institutional buying. One of the advantages of moderate institutional ownership is that it leaves room for upside institutional ownership. The almost weekly rise in the numbers of institutions buying into CPQ over the last 10 weeks or more, might indicate that at its levels of $23-$41 a larger number of institutions see it as an accumulate or a buy. Of course, many of them could be in for the short-term and could sell after a 10-50% rise from whatever level they entered. By and large, institutions buy for the longer term of 1-2 years. By and large institutons accumulate stock after their initial purchase. 56% leaves scope for further upward institutional buying. As others have pointed out, the net cash inflow into COMPAQ has been positive on an unusually large number of days recently, despite the fall in the share price. This suggests that beneath the surface there are interesting changes in ownership. The consistently high volume also suggests substantial buying, as well as selling.