Darrell, RE: with that large of a skew - why retain it? so suppse they go to a -81% next quarter and all the five biggies remain above 20% - what then? do you still retain their -81%? It seems obvious to me that this represents an IBM issue, a onetime event.
OK, I'll give my logic one more time and then give it a rest.
Yes, IBM exiting is a one time event.
But the people that didn't buy an IBM computer in the most recent quarter did not exit the market all together. They simply went to another vendor. Thus, IBM's numbers do not skew the overall industry's growth rate, only IBM's.
so, in your opinion, Niles can't pick stocks - well, he picked Dell as a strong buy at $35 - as did Kumar, ABM, and others - should say we should have followed him on Dell a few other times as well.
Niles raised DELL to a strong buy on 13 March, 2000. The price that the stock closed at the previous day was 52¬.
Dell's PEG ratio, as has been suggested, still trails the S&P
Please recognize that this is opinion, not fact. DELL's trailing 12 month earnings are $0.69. A quarter ago, there were $0.68. The quarter before that, they were $0.64. If they make $0.17 for the current quarter, then the 12 month earnings at this point is $0.70. Earnings have barely budged for a year now. So the PEG based upon any trailing measure over the past year is significantly higher than the S&P 500.
Looking forward, the average estimate for this year is about $0.90. If DELL manages to make this number, yes, then PEG is at a discount to the S&P. Of course, last year at this time, the average analyst had DELL's 2000 earnings at $0.73, which didn't happen, and had 2001 earnings at $0.97, which probably won't happen. |
