You wrote:
<<I've certainly heard these foolish words before, 'it's not my stock, it's the market>>
I beg to differ.
The Nasdaq is down over 9% from its high, Dell is down about 16%........Dell has frequently had a beta of 1.9 vs. Nasdaq, so the fall in Dell is in line with historical norms....
Look at CPQ, GTW, HP......ALL PC makers have been dragged down in the past couple weeks (this is not a Dell-specific problem) over 10%....larger tech bellweathers (MSFT, Intel, others) all down over 15% from their highs...Only Cisco and Lu have held up well, although Dell's advance from late April-mid May was much greater than Cisco and Lu, and I believe that net of the current drop, Dell has outperformed Lu and Cisco since mid-April (and since the beginning of the year, too). So Dell could afford (if you want to call it that) to fall further, it ran up a lot further!
The markets are taking a big breather, a mini-correction, whatever you want to call it. It happens every year...sometimes twice a year.......Is it so surprising that a stock that is up over 100% would lose 16% sometime during the year?
(What is interesting is that) Dell is not down on any fundamental weakness of the company's performance (vs. the selloff of the broader market due to weak, non-existent earnings)....There is still no evidence won't continue to grow EPS at 50%+, 60%+ each quarter this year (over the previous year)....IMO, Dell will be one of the first to recover (after the next couple nervous weeks), and will have a sustained recovery, while others will recover, and then fall back again after disappointing earnings....
IMO, Bears can't feel too comfortable about the odds of a large, prolonged decline (in Dell, in the overall market) at this pt.......after all, interest rates will (more likely) head lower than higher....the Fed can not (and will not) raise rates this year -because of Asia ...Muni fund managers have loaded up on cash, liquidity in-flows remain strong..........Asian investors will continue to send money in droves to the U.S. market this year............after the 2nd Q, earnings in the overall market will pick up....Dell's earnings will continue to shine......
Dell may have a little more downside in the coming couple of weeks......Watch Dell explode again after.........Watch many try to time it (buying) again and fail...
BTW- Had Dell fallen 16%, and the Nasdaq and/or high tech bellweathers, other "box" makers NOT fallen, I would tend to agree with you that this was a Dell-specific problem. The evidence speaks otherwise.... |
