Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 135.98

+3.0%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jim Patterson who wrote (38240)	4/17/1998 3:23:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Jim, you still don't understand leverage. The reason that stock buybacks enhance shareholder value is that you have substantially the same profits, but less shares of stock, so eps goes up. This is not just a short-term benefit -- the effect persists. The converse of this is when a company has a secondary equity offering, and the price of the stock drops. That's because the additional equity creates dilution of earnings. There are two dangers in borrowing money. The first is that the company will earn less on the borrowed debt than the interest it pays. The second is that cash flows will be insufficient to cover the total debt burden. The best way to see how much cash a company is generating is to look at its cash flow statement (required by the SEC). I think if you look at it you will find that Dell is a phenom amongst growth companies. Someone posted a link a few days ago concerning Dell's use of a metric they call the cash conversion cycle. If you haven't read that, by all means do so. It is an eye popper. I have never seen a company with a cash generating engine like Dell's. TTFN, CTC

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next