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Technology Stocks : Dell Technologies Inc.

DELL 145.40

-2.5%

1:33 PM EST

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To: Frank Ellis Morris who wrote (136091)	7/9/1999 7:07:00 PM
From: Moose	Read Replies (6) of 176387

Although DELL is my largest holding in terms of shares (AOL recently beat my DELL holding in value), I must admit I'm not as exhilarated as most re: today's price move. I'm still left wondering where this company is going. Here's what I do see: they are eating CPQ's lunch, they are counting on server sales, and now they have Gigabuys.com. My concern: 50% of all households have PC's. That's dead-center in the S-curve which means PC growth is SLOW from here on out. MD says servers are still a very small part of the profit picture, and I assume Gigabuys.com is not yet making money. DELL's PE has come down over the last 6 months in accordance with the its growth. Considering they make their Q2 numbers, the PE scales from 70 to 66. I'd be happy with that if the company was growing at 50%/year, but it isn't. In fact, it is forecasted to grow earnings by 39% (Yahoo!) this year. That sure sounds like a PE of 50 is much more fair. That gives us a price of $31.50. I'm worried. Can anyone make me feel better about the $42 price tag? Thanks, -Moose

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