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Technology Stocks : Dell's Daytraders Decision Site
DELL 146.68-1.7%Nov 7 9:30 AM EST
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To: DragonBoy who wrote (583)8/1/1997 3:51:00 AM
From: Andrew Vargas   of 1124
 
To all from briefing.com (must read)
Dell Computer (DELL) 79 7/16: Tremendous revenue and earnings growth is being driven by a strong corporate upgrade
cycle, tight cost controls, the success of its direct marketing model and expansion overseas. In our last Brief dated 5/22 we
noted the company's historically high valuations but conceded that bullish momentum would lift the stock to the 65 level for an
additional gain of 21%. Just as it has done with its earnings numbers, the stock continued to exceed our expectations by blowing
through 65 on its way to 86 3/4. While momentum remains strong, the stock's excessive valuations now take center stage. At
present, the stock trades at 34.5x estimated FY97 earnings and 27.2x projected FY98 results. Increased competition from the
likes of Gateway and Compaq, higher component pricing and lingering concerns over the pace of European growth suggest that
the risks of new investment are too high at today's price. We expect at least a modest near- to intermediate-term pullback, with
a target range of 70-68. The stock could easily take out this floor if earnings in the second half of the year fall shy of estimates.
Figures reflect the recent 2-for-1 stock split. (Rev: 07/29)
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