PC industry is very competitive, DELL's advantage over other guys will not last forever. DELL is a great company, but it doesn't deserve a p/e close to 50. The other thing that most people don't see is that earnings/share would be much less if not for buying back shares, it's outstanding shares would be around 385mm, which will make their earnings/share much lower. I am not saying buying back shares is a bad thing, I am saying DELL is using this as a way to inflate their earnings/share.
All be said, I do see DELL to hit 140 easily short term with this kind of momentum. Until something really happens, competition, slow down in PC sales, DELL will keep going up, but when one of the negative things happens, it will go down as fast as it goes up.
To me, DELL is too expensive to buy and too strong to short. I am not a hero, I just want to make money. |
