Lucretius, rather than merely echo the comments made by Meathead -- which by the way are all based on fact, not conjecture, I'd like to make a few additional points:
Ordinarily, when we speak of fundamental analysis we generally mean either a macro industry view as Meathead has so accurately (and perhaps conservatively) portrayed, or a micro company specific view which I've tried to convey to you. You have responded with a series of non-sequitors (not to mention consistently misspelling the word "fundamental" WHICH IS DRIVING ME NUTS!!!).
Dell's sales are increasing, and finding one or two vendors who find that the product isn't experiencing the demand it once had is hardly convincing.
"Market internals" is clearly out of bounds for fundamental analysis. I will leave that to those who believe in TA and other forms of sorcery.
You say "Your ratios are nice, but that is a backwards look". Well, that's not quite correct. Those ratios tell you how the business operates on a nuts and bolts basis. Those ratios have nothing to do with the price of the stock. They are intended to demonstrate the efficiency with which Dell deploys its resources. That's an example of what I mean by a company specific analysis. Show me another manufacturer/assembler with an asset turnover of 4! Do you even have any concept of how astounding that number is? Do you know what that number implies? I doubt it.
Yes, Dell is devoted to the high end. Jim Kelley and Meathead have exhaustively analyzed the wisdom of that decision. At this point I am absolutely convinced it was the wisest choice Dell could make. The economics (here we go with fundamental analysis again) indicated that there is precious little, if any, profit in this market. How else do you explain the precipitous drop in CPQ's gross margin (from around 27% to 18%)?
You say "Asia is getting worse (globally economicly speaking)", but fail to show how this will impact Dell. I should point out that Dell's Asian exposure is largely as a buyer of those cheaper goods and should benefit. Companies like Applied Materials, on the other hand, are hurt because Asia is a major customer of their goods. But if you think Asia is getting worse, why are you investing in Japan?
I could go on for quite a while, but the pussycat's paws were made for pouncing, not for typing, so I think I'll pounce for awhile.
TTFN,
CTC |
