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Technology Stocks : Safeguard Scientifics SFE
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To: Tom Bunge who wrote (3176)7/2/1999 1:34:00 AM
From: michael r potter  Read Replies (1) of 4467
 
-OT- Tom, regarding Dell. There are certainly a lot of pros and cons.
I subscribe to The Option Advisor by Bernie Shaeffer. He knows T/A far better than I. For the June and July issue, he has featured Dell as one of his 6 long call recommendations. Here is why. Dell beat analyst expectations 5 of the last 6 quarters. Its June rally of 25% has lifted it above its 10 and 20 day M/A that have been resistance since mid-May. Option activity indicates pessimism toward box makers a contrary sign. 11 of 31 analysts rate DELL a "hold" indicating wariness and room for upgrades. Put me in the wary camp. With no position, it seems to me that for several quarters, after a good earnings announcement, the stock tanks. I am surprised they have been able to keep margins and ASP as high as they have with the brutal price competition. Many think margins will come down. Estimates are for 34% growth to $.98 for next year and $.73 for this year. [Jan.00]. Competitors are trying to close the gap in terms of getting their costs down to more effectively compete. But, it is a great, well managed company that executes better than anyone. Still, a $93 Billion market cap. seems excessive. There are descending trend-lines that have capped rallies from the top. Right now, it would have to break about $41 to overcome that. Maybe I'm just sore because they have given my poor little CompuCom fits for years and by owning 25M. or more shares, have given our beloved SFE grief. :). Mike
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