DELL COMPUTER--INCREDIBLY OVERVALUED STOCK Message Board

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Strategies & Market Trends : DELL COMPUTER--INCREDIBLY OVERVALUED STOCK

DELL 162.02

+0.7%

3:59 PM EDT

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To: Paul Merriwether who wrote (85)	10/26/1997 12:53:00 AM
From: Brian Hutcheson	of 96

Paul , Re. a market correction .. I believe what we will see in the next few weeks is a Hi-Tech correction . I have been monitoring the Nasdaq index closely , before the the last 2 corrections (July '96 + March '97) the index went 50 points above the top trendline , this time it has gone 250 points above. I was waiting for the usual trigger of an interest rate backup which set the previous 2 corrections going . It looks like the Hong Kong crisis is the trigger this time , we will have to wait for monday or so to see if Hong Kong is going to feed off the Dow's drop on friday . As far as Dell is concerned by any measure it is ridiculosly overvalued , especially in the Price/Book ( 28.3x the book value is $3.38 ) . The last 2 quarters had earnings increases of 21% and 32% on an annualised basis , this would perhaps in a good market justify a P/E of 32 or $75 a share or so . But with a market in a correction who knows how low . An interesting comparison is with AMD market cap , Dell is valued at roughly 10 times the value of AMD , regards Brian

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