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Non-Tech : CompUSA (CPU) -- Ignore unavailable to you. Want to Upgrade?

To: Smart Investor who wrote (2427)	5/20/1999 2:49:00 PM
From: Michael	Read Replies (1) \| Respond to of 3187

It's nice to see payday is finally here. Very nice run-up in the last week. I'm glad I added to my position last week at 6 1/8. Wall Street Research MARKET DIGEST ONLINE WHISPER STOCKS...THURSDAY, MAY 20, 1999 COMPUSA: (CPU) $7 3/16 Up 1/16 and traded on the New York Stock Exchange..... This is a stock that we first recommended several years ago, as we were convinced this was a $100 number. However, things have never gone as we expected for the COMPUSA. The company has been brought back to my attention by a person in the know, as it has survived a massive restructuring. I'm told the company now has several suitors. Yesterday the stock traded more twice its normal volume of just over two million shares. The stock was up 5/16 yesterday. I am told that the heavy volume will continue. The company just reported a quarterly loss of $5 million on sales of $1.7 billion. We're hearing that a complete store makeover will be announced very soon that will completely change the company's focus. The CEO of the company, James Halpin, is currently readying on-line offering CompUSA Net.com, which will most likely become a spinoff. With a market value of $647 million, CompUSA is not getting much credit for its restructuring. If CompUSA Net.com does become a spinoff, some very interesting comparisons can be made. You have all read about Egghead.Com (EGGS $13 1/8) in this column, as it is a past successful pick. As you all know, Egghead closed all its retail stores to go completely on the Internet. The only way you can purchase Egghead software is over the Internet at www.egghead.com. Could rumors of a complete company refocus include such things as an Internet only store?? What's very interesting is the fact that Egghead sports a market cap of approximately $400 million or three times its sales. On the other hand, CompUSA is priced at paltry 11% of sales!! Onsale (ONSL $22 3/4) has sales of $260 million and a market cap of $447 million. Our math tells us that if CompUSA is valued exactly the same as Egghead.com, the stock should be priced at $18. If we use the same valuation method that values Onsale, CompUSA should then sport a per share price of......well should we say much higher than $18. Someone is missing the boat here. The 52 week high is $21 3/4 and based on the way some of its peers are valued, CompUSA's stock should be trading at or above its 52 week high. Once CompUSA Net.com is spun off from the company, this stock should start to be noticed. Let's have Market Digest Online subscribers buy this one before the street becomes aware of the low valuation. The chart looks very constructive. There's a big gap to be filled between $6 1/2 and $9 1/2 and the stock appears to be in the process of filling this gap. Once the gap is filled, the potential is to the low teens.