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Strategies & Market Trends : Tech Stock Options
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To: David Weis who wrote (43114)5/13/1998 1:02:00 PM
From: broken_cookie  Read Replies (2) of 58727
 
Hi David,

I will re-ask my question. Is that P/E 87 based on trailing earnings

Here's some comparisons. Format = year estimated earnings p/e.

Dell 97.43
1998 1.87 52
1999 2.44 40

CPQ 32.18
1998 .78 41
1999 1.60 20

GTW 54.5
1998 2.24 24
1999 2.88 19

CSCO 76
1998 1.75 43
1999 2.16 35

MSFT 88
1998 1.73 51
1999 2.05 43

I included the other box makers and other tech bellweathers.

Dell gets points for consistency in earnings and cons. in earnings upsides. CPQ is the relative value in the three but it's still depressed from missing badly and uncertainty about DEC. GTW blew it about a year ago. Dell has never missed and future earnings estimates have always erred seriously on the conservative side. Should this behavior continue, DELL is the value play of the three ( i hear the fits of laughter from Tom).

When you look at CSCO and MSFT, DELL valuation is not so crazy. CSCO died with rest in early 97 and MSFT has DOJ trying to kill it.

Why am I telling this to a DELL head. :)

I think Dell can/will double again. That brings its market cap to greater than 100 billion. In order to go past this it will have to continue/move its explosive growth to eastern markets. If it screws this up then it will get wacked.

I have DELL, CPQ, CSCO and looking for MSFT so I'm biased. I watched DELL go up and up and up and finally I bought a couple leaps certain that this would signal the turning point. It's worked out so far. Lisa is right - DELL has always looked overpriced.

Good luck.

For those playing with short term options, Dell could trade up 7-10 pts after earnings and the calls could just lie there.
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