Intel Strategy for Achieving Wealth and Off Topic Message Board

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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic

INTC 35.98

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9:30 AM EST

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To: Brian Malloy who wrote (10040)	9/22/1997 5:11:00 PM
From: Sonki	of 27012

brian, even BARRONS couldn't keep our dell down... DELL COMPUTER CORP. (DELL) 97 3/4 CLOSED. Shares of major computer maker could come under some selling pressure this morning following a negative report in the latest Barron's issue. While the article in the Alan Abelson column argues that Dell's business is going through the roof, has experienced very explosive growth and makes a first rate product, the issue is selling at 38 times estimated FY98 earnings, twice the highest price/earnings ratio the stock has sold at any time before this year. Then again, the stock is currently up 200%, after having gained a similar amount in 1996 which was preceded by a gain of 70% in 1995. The basis for calling this stock "terribly overvalued" revolves around the fact that Dell, despite its renowned marketing skills and operating in a quasi oligopoly environment, lacks one of the major features of controlling its own destiny--controlling the price of its product. In fact, because price pressures are the main marketing feature of this sector, Mr. Abelson makes the argument that Dell is not immune to the same pricing problems that have hurt Gateway 2000 recently because computers have become a commodity. He also argues that he does not expect demand for PCs to continue to spiral upwards unabated and that computers, like all capital equipment, remains sensitive to economic slowdowns and changes in the business environment. He also notes that insiders have been aggressive sellers of the stock, although investors remain enamored with the issue given its past performance.

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