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Technology Stocks : Dell Technologies Inc.

DELL 133.92

-4.9%

Nov 13 3:59 PM EST

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To: BUYandHOLD who wrote (67784)	9/27/1998 11:00:00 AM
From: J. P.	Read Replies (2) of 176387

From Fleckenstein: (Sorry if this has already been posted...) stocksite.com <As I see it Today was the Dell analyst love-in down in Texas. Michael Dell said all the predictable, wonderful things. Naturally its stock caught fire, leading the charge as the market screamed higher. Let's put some numbers in perspective. Dell's market cap is $80 billion, yet we sell only $150 billion worth of PCs in the world annually. If you assumed that Dell achieved 100 percent of the worldwide market for PCs at $2,000 per box, and a 5 percent net margin, Dell would net $9 billion a year. With 1.3 billion shares outstanding, this would translate into $7 in EPS. At today's prices you would be paying nine times earnings for a company that has 100 percent market penetration, assuming no pressure on ASPs or anything like that. To look at this differently, people are assuming Dell's growth rate won't slow. In which case, it would have 100 percent of the PCs in the world in about five years.> Thoughts?

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