Re: Its hard to say SB, I'm not a prognosticator. It should rally then (Aug). I would hope for a split and another climb towards 100, post split.
Huh? Wait a minute, 100 after the split? You can't mean this year, right? Dell has already more than doubled this year, so you are hoping for a 4-banger on a stock that was already at least at "fair value." This seems highly optimistic.
I have a pretty simple way of measuring a company's value, at least for already big and established companies, not phenomena like Yahoo. PE should, in general, equal annual growth rate. Dell fits the profile of big, established, well-known, not likely to do anything weird like discover cold fusion or the cure for cancer or suddenly go bankrupt, etc. Dell has historically grown at 50% per year, and it often has a PE of around 50. That was a fair value, and I've owned Dell before. When the PE started doing weird things and going to 70 and beyond, I guessed it wouldn't last, and I was right. Now, PE is back to the 50's and I would feel confortable owning Dell again, expecting price to grow along with the company's own growth.
You seem to expect Dell's share price to grow at a pace rapid enough to take PE past 100. I just can't see that happening for Dell. I would love to hear your reasons for this. I know some people laugh off PE valuations, but I've found that they kept me from getting carried away on several occasions.
Haz |
