Ray,
On July 12th you wrote this:
what has changed fundamentally with DELL to warrant a 6% rise in its' stock price given the increase of 40% since January?
The answer may be that DELL was extremely undervalued in January. I have asked on another thread (Idea of Day) if someone can give me an idea of what the PE and valuation of DELL should be, based upon earnings, ROE, and sales growth. Can you or anyone analyze for me what kind of growth would justify a particular PE?
If a company has 20% annual growth of sales, and revenues, and one can foresee that continuing, what PE would that justify?
Ditto for 30%, 40%, 50%, 60%.
Based on AMD or AOL PE, DELL is somewhat **g** undervalued. Based on INTC or MSFT, it might be overvalued.
On the other hand, I believe that DELL is going to continue its sales and earnings growth at comparable rates for at least two quarters, and probably much longer. (I use the 2 quarter figure because we are going into the strong sales season, and because IMO it will take that long for their competitors to develop their Direct Marketing plans into a potentially competitive stance)
Appreciate any input. thanx
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