Willameana, what new information are you referring to? Dogway's report??? IMHO, there was a gross overreaction to the report. There were several positives in the report, including higher gross margins, higher cash position, lower inventory, higher current ratio and a positive forward looking statement regarding the order queues and strong demand for your:)ware. Where dogway blew it was on the SG&A (selling, general and administrative expenses) and the fact that they said they were comfortable with the estimates a few weeks ago. If it hadn't been for the excessive spending or investment, depending on how you view it, on marketing expenses for your:)ware, they would have blasted away the estimates by at least .18/ share or almost 50%.
Having said all that, I am at a loss understanding what you mean about new information that could affect your Dell prediction. Lets look at the facts. There was concern among the trigger happy, that ASP's were going down even though Tom Meridith indicated that components are coming down at the rate of 1% per week and margins are unaffected. This was demonstrated positively by the Dogway report which had an increase in gross margins inspite of declining ASP's. Additionally, the Dataquest and IDC data coming out any day now will probably show that Dell is continuing to gain market share. If the Dogway report is an indicator, Dell probably gained share in Europe since it is firing on all cylinders in Europe and Dogway's European sales declined.
Based on the above, I would probably be raising my Dell price targets, not lowering them. Just my humble opinion.
:o)
Drew |
