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Technology Stocks : Dell Technologies Inc.
DELL 146.68-1.7%Nov 7 9:30 AM EST
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To: OLDTRADER who wrote (159306)8/9/2000 1:52:11 PM
From: jim kelley  Read Replies (3) of 176387
 
DELL had a rough time with the 820 issues and the SDRAM price hikes last year. But times are changing.

There are some interesting catalysts to DELL's business for next year and the year beyond.

1) They have pushed SUNW out of the pole position in workstations. The launch of the P4 will increase that advantage that DELL has over SUNW in the workstation market.

2) The P4 will also permit DELL to take an ever bigger bite out of SUNW's low and mid range server market. This will hurt SUNW in 2001.

3) The introduction of the Itanium Enterprise servers (if successful) will begin to bite into SUNW in 2002 and beyond.
DELL will be beneficiary of this new class of product.

4) W2K should also help DELL compete against SUNW Solaris OS.

5) DELL's revenues are double that of SUNW and its manufacturing is far superior.

The long term trend is in favor of DELL not SUNW. SUNW has been able to capture high margins with its products because they are essentially proprietary. When these gross margins come under attack, SUNW's PE will collapse.

SUNW PE based on next years projected earning is 68.
DELL's PE based on next years projected earnings is 34.

DELL's PEG based on next years earnings is 1.
SUNW's PEG " is 2.8!

SUNW has been very successful with its marketing program.
In particular, marketing its stock to Wall Street and Main Street. When its margins come under attack there will be severe PE compression hitting SUNW.

Tucker is basing his analysis of DELL on last years results.
This is investing through a rear view mirror.

:)
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