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Technology Stocks : Dell Technologies Inc.
DELL 119.41-2.7%Nov 19 3:59 PM EST
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To: JRI who wrote (36301)4/2/1998 10:36:00 AM
From: SecularBull  Read Replies (2) of 176387
 
John R., BASED on your concerns, you should probably wait until CPQ announces in a few weeks to buy more DELL. I don't think that CPQ is going to miss the revised numbers, and I think that the negative scenario is already priced into the stock.

You'll be in trouble if CPQ beats the numbers (highly unlikely). There's also much more to it than the numbers. My principal question for CPQ is how long do they see it taking before the channel problem is solved? To me this is more important than them hitting the number.

In any event, I don't own any CPQ, and wouldn't ever consider buying it as long as DELL continues to execute its strategy well.

The p/e for DELL to me seems on target for normal (maybe a bit high). I would not be inclined to be paying more for forward earnings than the current price. I think the near-term downside for DELL is $61 (approx. 45 p/e), but I wouldn't bank on a return to that level.

I think that most of the people in the stock now understand that DELL is immune to the CPQ problem, in terms of CPQ dumping inventory and hurting DELL's sales.

I think the wild card is the sub-$1000 PC. I don't believe this is a serious concern at present, but I wouldn't count on it remaining benign forever.

I think the real benefit to DELL in light of the CPQ debacle is that DELL might actually be able to accelerate growth in terms of percentage of market share. The market may shrink, but DELL will continue to gain. I read somewhere that CPQ's problems could equate to a 3.5-4.0% loss of annual market share for CPQ. Where do you think that's going?????
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