Jules - Re: "Why has the Street singled out Intel, while IBM, DELL, and others are close to, or making new highs? "
Dell first.
Actually, Dell has been slaughtered recently - down from $68 just two or three weeks ago and I think they were as low a $43 until rebounding to $56 11/16.
But DELL has turned in many quarters of spectacular year-over-year and quarter-over-quarter growth and Wall Street has rewarded them.
They grow consistently at a huge rate (>50%) and have a great business model that succeeds in these bad times as well as the good times. Also, DELL is a RECIPIENT of lower CPU prices and lower component prices arising from the S.E. Asia financial crisis.
As for IBM, my synopsis is that Wall Street truly rewards excellent engineering and IBM has displayed SUPERB FINANCIAL ENGINEERING as WELL AS MARKETING ENGINEERING over the past several quarters.
You are more conversant with the financial engineering - flat sales and earnings growth but BORROWING MONEY TO BUY BACK SHARES resulting in an Earnings Per Share Growth - simply by REDUCING THE NUMBER OF SHARES WITH BORROWED MONEY.
Wall Street Loves THAT ! They Love shenanigans such as investing in Russian Vodka refineries, loaning money to Cowboy Nobel prize winning Money Magicians that can make Dollars Disappear faster than you can say Hedge Fund.
And DON'Y FORGET IBM's TECHNOLOGY MEDIA BLITZ - COPPER Here , COPPER THERE, COPPER COPPER EVERYWHERE!
They have a PR firm actively pushing IBM's technology to the general media press as well as the technology press.
And it has paid off in prestige and stock price, yet NOBODY - except me and Yousef - seems to point out the truth - that Intel's current technology is BETTER than IBM's !
So, long term, Intel will continue to do well. The POWER SURGE that we all expected didn't happen after the earnings release. It may happen in the next 3 or 6 months if Intel's business and technology continues to spur demand for PCs.
When Intel releases a note that they are "sold out" for 4'th quarter production, investors will take notice.
As always, patience pays off in this business.
Paul |
