Chuz, re:show me another S&P500 company with ROIC of 229% or better.
Fantastic isn't it? Cramer should quit his day job.
Numbers, numbers. I've got a riddle for you:
Correlate DELL's growth rate with units sold. Now, skew the result against ASP decline. Assuming the product mix remains the same [although MD implies that it won't], what will be the total units sold one year from now?
Offer the data to an operations expert and ask what pathological problems arise when using JIT. (Assume that factory space is not the core issue.)
On another topic: DELL may be impacted even if overall computer growth is sustained. It's the "high-end" that supposedly affects DELL, right? As feature richness is introduced at all levels, high-end product differentiation becomes more difficult; historically, the result is a smaller high-end segment. Eventually, the value mix shifts to intangibles such as service, delivery. (We are witnessing that transition now.) As consumers recognize that they are paying for service, the expectation increases. (Those companies with established direct service organizations generally hold the advantage.) Ultimately, high-end stratification occurs and the market opportunity becomes smaller.
Note: The broker who compared DELL and SUNW is not the sweet spot for either company. Service issues are much more complex, and include balancing a rapidly expanding, disparate installed base. |
