Uncle Frank and other recovering Dellheads,
A quick couple of points on Dell, one of the few healthy princes in PC's these days.
The stock is recovering, and bouncing into the 40's again, after dipping to the low 30's in June.
Just like day follows night, the positive spin articles are reappearing.
news.com
I went over to Excite/Quicken, and plugged in some numbers to their "Stock Evaluator" thing that does the discounted cash flow valuations.
I used the average 5 year growth rate of 33.5% that 21 analysts are reporting, and guessed at several discount rates until the stock came out fairly valued.
On my assumptions it shows a 25% estimated annual return.
For comparison, the same exercise on some of the favorites here:
CSCO Growth estimate 29.1% Stock Return 10%
MSFT Growth estimate 24.4% Stock Return 12.25% (DOJ Discount?)
QCOM Growth estimate 32% Stock return 11.5% (analysts growth estimate too low!)
If this link works right, see the Evaluator input/results at:
quicken.excite.com
I now own Dell again, on the assumption that they will continue to press their advantage against CPQ and the other box makers, eventually reaching "major princehood", at twice the global market share of their nearest competitor. (Somwhere I read that in a fully competitive market, the leader eventually settles in at double the market share of number two, who has double the share of number three, etc...)
That's still no gorilla, but it will be a good investment if I am correct.
Comments welcome.
Brian |
